Weighing the pros and cons of insurance is crucial

Setting up a new practice, while potentially rewarding in many ways, can also be stressful and overwhelming. There are decisions to be made, from location and staffing to marketing, hours, and when to open your doors.

One of the most important decisions to make for anyone starting out, changing locations, or moving into solo or a new group practice will be whether to accept insurance payments.

While there are pros and cons to both sides, it’s a personal decision based on several factors including the practice type, location, and professional goals.

No one answer can suit every practice and the issue may not be an “all-or-nothing” situation. Options include enrolling in a few of the available insurance panels or starting with many and then dropping those that are more time-consuming or have lower reimbursement rates.

“When starting out, we recommend that folks take as many insurances as possible,” said Cassidy Donovan, director of business development for Therapist Solutions, a Stonington, Ct.-based company that specializes in handling mental health billing. “Make it an all-inclusive environment to bring clients in to the practice. You may then get to a point where your practice is booming and you may decide to remove yourself from some panels.”

There was a time when the decision to accept insurance or not was a non-issue because most health insurance programs did not cover mental health care. But since parity was adopted in 2013, the story’s changed.

Insurance coverage has helped encourage lower income populations to seek treatment and connected psychologists with more patients.

“The real benefit of accepting clients through insurance is accessibility,” said Jeff Zimmerman, Ph.D, ABPP, who has a private practice in Connecticut and New York and is also co-founder of The Practice Institute, a business and marketing consultancy firm for mental health professionals.

“There are many people on insurance so services will be accessible to more of the population, especially those of more moderate means. It can also help to increase one’s patient flow, which is helpful for those just starting out.”

So, why would someone not take insurance? For one, working with insurance companies is more time-consuming administratively and more restrictive.

“Originally, clients would pay and then get reimbursed for their treatment,” said Carl Hindy, Ph.D, a clinical psychologist with a practice in Nashua, NH, who has worked with insurance plans for most of his 33-year-career.

“That was their insurance company and they had the relationship. Then managed care started to come in and it all got murkier until it now feels like we are working for the insurance companies rather than for the patient.”

Insurance also does not cover all services. Unlike with medical care, where someone can get a strep test and it will be covered even if the test is negative, health insurance does not cover therapy without a diagnosis. Not all issues that a person would bring to a mental health care provider fulfill diagnostic criteria.

That situation can be difficult to explain to a client in advance, before diagnosis, and can lead to problems when he or she discovers that they are not covered for a visit.

“Part of my issue is that I don’t know what insurance is going to pay until I send it in,” said Hindy. “There is so much confusion and lack of standardization.”

One issue for some clients and psychologists involves privacy. The potential exists that digital information can be hacked. With health care laws being changeable, there’s no guarantee that pre-existing condition laws will stand and someone may find themselves at risk of losing coverage in the future once insurance companies have their records.

For most psychologists, the ideal situation would be to provide treatment for everyone, no matter their income level, which would be difficult in a fee-for-service practice. But the higher income may open doors to other ways to provide services.

“We have seen practices that do full fee and pro bono work, so that they are still accessible to clients with more moderate means,” said Zimmerman.

The end decision may be to offer a blended approach, accepting some larger insurances but also offering a fee-for-service option.

Newer psychologists may wish to join every insurance panel available to build a base and then ease off the panels in future. In some cases, just lowering the hourly cost to something closer to what insurance would pay can provide balance. The choices of how to move forward are varied and come down to the individual therapist and her practice, location, and goals.

Catherine Robertson Souter is a freelance writer and social media agent based in New Hampshire. A contributor to New England Psychologist since its inception, she previously wrote for Massachusetts Psychologist among other media outlets.