Private Pay Versus Insurance: What Works For Your Mental Health Private Practice?

 Private Pay Versus Insurance: What Works For Your Mental Health Private Practice?

Written by Kelsey Someliana-Lauer, Therapy Practice Solutions Virtual Assistant

Opening up a private practice to perform mental health therapy is a big deal. There are so many details to sort out - many of them fun, like picking a name, designing a logo, browsing color palettes, and launching a website. Some other details, however, may be a little more anxiety-inducing. One big detail many mental health counselors starting their own practice struggle with is the decision to accept insurance or be an out-of-network, or private pay, practice only.

Each therapist has their own reason for their choice to accept insurance or not. For example, many therapists choose to accept insurance to promote opportunities for those who could otherwise not afford to attend therapy. Other practices choose to only accept private pay clients because insurance needs major reform in their reimbursement for providers.

If you haven’t picked if you’d like to accept insurance or go totally private pay in your practice, check out these considerations:

Do You Need More Referral Sources?

One major advantage of accepting insurance is being listed in insurance directories. Not only do insurance panels themselves use these directories to recommend providers for inquiring insurance members, but other helping professionals utilize them when performing case management to make referrals.  If you accept insurance, you’re likely to have more potential clients off the bat due to being referred by more people. However, you can still utilize other directories, like Psychology Today or Inclusive Therapists, even if you choose not to accept insurance.

Are Private Pay Clients Available in Your Area?

Not every therapist works in an area overflowing with available clients, and there are generally less private pay clients available across the board! There are some areas where income is typically higher and clients may be more willing to pay out of pocket for care. There are other areas, however, where individuals are depending on their insurance to cover their mental health expenses as high out of pocket rates are simply out of reach. One way you can assess the likelihood of obtaining private pay clients is by checking the median billed rate for common CPT codes near you. Here is a map that can help you out with that!  Simply put, areas that can charge higher rates are generally those with more private pay clients available.  If you’re not in an area with many private pay clients, you may want to accept some insurances to fill your caseload.

Are You Prepared for the Credentialing Process?

I have yet to hear of a counseling or social work program that shows clinicians, step by step, how to become credentialed. Chances are, you’ll need to do some research: what insurance panels will accept your license and level of licensing? What panels pay a rate that you’ll accept? What panels are taking on new practitioners? What information will you need to gather to apply for credentialing in your state?

Insurance panels vary greatly on how long credentialing takes, with some panels being able to credential you in one or two months and other panels taking six months to a year to finish the process. To become credentialed, most insurance panels will have their form and process posted on their website. If you’re unclear on the steps, most insurance panels have a provider services number you can call to ask for clarification.

If these steps sound like more trouble than they’re worth, private pay may be a good option for you. If you have time to wait for credentialing to be completed and have the appropriate licensing to be accepted, insurance may be a good route.

At the end of the day, the decision to become credentialed with insurance panels or to instead be completely private pay is up to you. The good news is: you can always change your mind later! If you start out with private pay and aren’t getting enough clients, simply apply for credentialing. If you are unhappy with the insurance you accept, you can always decide to de-credential yourself. Whatever your choice, Therapy Practice Solutions is here to help with credentialing, billing, insurance verification, and more. Reach out today to get paired with your new teammate. We look forward to hearing from you!