SUMMARY: Many therapists take only a limited number of insurance plans, to avoid the aggravation of haggling with insurance companies. The majority of their patients pay out of pocket and, if they are insured, they then may submit claims to their insurance companies. This trend is likely to continue. Yet the option for self-pay may not be the choice of therapists alone. Some patients choose to pay out of pocket. Find out five reasons why.
Third in our 6-part series on the costs of mental health care.
With U.S.-based therapy costs ranging on average from $60 to $300 per session, why would anyone with mental health coverage choose to self-pay, rather than use their insurance?
Many might not have much of a choice, as a vast number of therapists are not in-network, opting out of insurance plan participation. Even if a patient can find an in-network provider, the therapist might not have a particular level of experience he or she is seeking, or there may be a long wait – sometimes even months – to make an appointment.
What are the advantages to not taking insurance?
“The goal for most therapists is to get to the point when you stop taking insurance,” said Dr. John Grohol, founder of PsychCentral, the internet’s oldest independent mental health social network. “When you stop taking insurance you stop having to deal with someone questioning your treatment decisions, and you can stop doing all the paperwork.”
That paperwork dealing with insurance companies is no small expense – especially for the individual or small group practices in which most mental health professionals operate. According to a study from MedScape (registration required), over 40 percent of psychiatrists spend 10-14 or more hours on paperwork. Another study found that American doctors spent more than $80,000 per year per physician dealing with multiple health plans.
“Being in network is challenging,” says Ann Becker-Schutte, a Kansas City psychologist in private practice. She accepts Medicare, but is an out-of-network provider for her other patients, all of whom are dealing with serious physical conditions. “On the one hand it makes the services more accessible to more people, and I am behind that. But it also is way more work for my staff for way less reimbursement.”
“Now that people are required to have health insurance [through the ACA], that may change the game considerably,” says Becker-Schutte. “But most therapists I know are trying to flee the scene.”
According to a 2008 survey by the American Psychological Association, 85 percent of licensed psychologists reported receiving some third-party payments. The majority of those claims, however, were paid by federal, state and local government programs, such as Medicare and Medicaid – not private insurers.
Yet while avoiding insurance companies appears to be in the interest of the service provider, therapists also claim that in some cases paying out of pocket can benefit the patient as well.
What are the advantages to paying out of pocket?
1) Choice: Patients who wish to stay in network may not always find a provider with whom they are comfortable, or who has experience dealing with the types of issues the patient wishes to address in therapy. In some areas of the country, in-network access to therapy is extremely restricted, requiring patients to travel as much as two hours to see someone.
2) Flexibility: Just as insurance puts restrictions on therapists, it has, up to now, set restrictions for patients as well. While many of these restrictions – limits on number of sessions, for example – are impacted by the November 2013 final rule on mental health parity, insurance companies can still restrict reimbursements on certain kinds of treatment, such as online therapy, group therapy or couples counseling. Self-pay patients may also opt for a longer sessions, if the need arises, whereas patients covered by insurance must stay within the negotiated time slots.
3) Privacy: When patients use insurance, therapists must attach a diagnosis to release insurance benefits. This diagnosis then becomes part of the patient’s permanent medical record. For patients who wish to maintain their privacy, and are uncomfortable with the number of people who have access to their medical record, they may opt to pay. Paying out of pocket means that therapists are not required to assign a mental health diagnosis or share medical information with anyone.
4) Timeliness: Particularly in overstretched networks, patients may have to wait long periods of time to schedule therapy with a provider who accepts their insurance.
5) Convenience: Paying out of pocket not only allows the patient to see someone more quickly, but self-pay patients are often given the option of arranging more flexible session times, such as weekends or evenings.
Next: Finding Affordable Psychiatric Medications
This is the third piece in our mental health series. The series, in its entirety, is outlined here.
- Overview of Mental Health Care in the U.S.
- Finding Affordable Psychotherapy
- Five Reasons Why People Self-Pay for Therapy
- Finding Affordable Psychiatric Medications
- Patient Assistance Programs
- Thinking Out of the Box for Therapy