Should You Accept Insurance In Your Private Practice?
It depends.
There is no one right answer to that question, because there is no one best way to design your ideal practice.
The key is to make that decision based on what is ideal for you, and then to re-evaluate your decision over time.
I’ve had an active psychotherapy practice for years, and my own approach to this has changed considerably. In the early days, I was on every contract I could possibly find. Today, my clients are all self-pay.
As you would expect, I’ve learned a few things along the way. :)
Here are some questions to consider as you decide this for yourself.
1. Are you just starting out, or have you been in practice for a while?
If you’re just getting started, and any client is better than no client, then it may make sense to accept insurance as one of your payment options. Just remember that you have to be licensed in your state before you can contract with any third party payor.
If you’re already in a private practice setting – but are not yet licensed – you won’t have this option.
Of course the mentees in my own practice will tell you that’s not necessarily a bad thing.
2. How good are you with paperwork, organization and systems?
Because you’ll need this if you decide to accept insurance: there is a LOT to track.
Even if you file on line, as more and more companies require, you still need a way to submit, track, and re-submit claims. You’ll also need to track co-pays, deductibles and any non-covered expenses that should be billed directly to your client.
Filing claims isn’t that hard. It’s going back and fighting for the odd one here and there that they seem to deny on a whim that can really eat up your time.
I saw one estimate that said for every three hours you spend with clients you’ll need an additional hour to work with the claims. Based on the stories I hear from insurance-based colleagues, that sounds about right.
So, if you see 24 clients a week, fairly typical for a fill time practice, you’d need roughly another 8 hours that week to handle the claims for those sessions.
3. Do you have administrative help?
It is possible to hire someone specifically to help you with billing – and that may make sense whether or not you accept insurance. If you do have good help, this could be manageable.
Although, I should tell you, I went through 7 different billing companies before I gave up on that idea.
Either way, if you’re flying solo, go back and read #2.
4. Do you have any special skills, services or programs that may not be covered by insurance?
If so, those could be a valuable component of your business – whether or not you take insurance, and as such, could really boost your bottom line.
In other words, you may not need to take insurance to make the income you want to make, if you have a particularly marketable specialty.
5. Do you have skills that may be covered by insurance, but that are so unique that people may be willing to pay for them any way?
For example, I have a colleague who’s developed a ground breaking method for helping people get better in record time. Her work is quite special, so her time fills quickly, even with premium rates.
If you have a unique specialty or a strong following because you are just that good, your ideal clients will not care whether you accept insurance or not.
They just want you.
Now – if you DO decide to accept insurance, how do you know which companies to contract with?
Here are a few other things to consider.
6. What insurance companies do the largest employers in your area use?
It makes sense to contract with insurance that has the most “covered lives”, or customers, in your area. Don’t waste time pursuing minor contracts with brands that are never likely to be used by anyone in your office.
7. What is the reimbursement rate for your credential level at each company?
Before you decide to work with any particular company, ask to see a copy of their provider contract, and their reimbursement schedule. What they pay varies widely by education level (master’s vs. Ph.D.) and by region.
What BlueCross pays in Wisconsin varies considerably from what they pay in Mississippi. Make sure the fee is worth your time.
And a quick bonus tip here. When you check those contracts, make it a point to see what kind of notice is required should you want out of that contract in the future.
I’ve heard of some that say you can’t cancel for at least three years. If you get one of those, I’d burn it.
Just sayin’.
8. What is your annual income goal?
Actually, this should be the first question you ask no matter what decision you’re trying to make. But let’s look at that in the context of insurance vs. self pay.
Now that you know the reimbursement rates of the top insurance providers in your region, do the math. How many sessions a week will it take to reach your goal at that reimbursement rate?
Are you willing to work those hours?
9. And finally, how comfortable are you with being uncomfortable?
In the end, that may be the most important question of all.
Accepting insurance as all, or part, of your payment mix is by far the ‘safest’ way to go. You won’t have any trouble filling your practice, for sure.
The risk is that you’ll do good work but not get paid – depending on how the claims process goes.
On the other hand, building a self pay practice involves a different kind of risk, and will require a different skill set entirely.
For one, you’ll need to learn how to market, and sell.
Whether your practice is all insurance-based, all self pay, or some blend of both, doesn’t matter.
What matters most is what is ideal for you.
Now over to you.
What feels like the best mix for YOUR practice?