What is Private Pay?
Long ago when I was seeking counseling for the first time, I was concerned about the stigma associated with mental health diagnoses that would be recorded in my permanent health record. I was concerned that any notes or diagnoses would impact the quality of medical care I had access to or my ability to keep health insurance. Below I will describe several reasons some people prefer to pay out of pocket and why some mental health providers prefer not to bill insurance.
PRIVACY CONCERNS
Before the Affordable Care Act (ACA), pre-existing conditions, including mental health conditions, would be enough reason for a health insurance company to refuse any kind of coverage. Of course today, thanks to the ACA, insurance companies cannot deny someone health insurance due to pre-existing conditions. However, for some individuals there may still be a concern about their health insurance company having a record of their mental health diagnoses and session treatment notes due to stigmas associated with mental health. Some might find themselves wondering, “will my doctor think of me differently based on my mental health diagnosis?” Mental health providers credentialed to submit iInsurance claims will be required to provide a significant amount of detail to process claims or as part of regular audits. Information provided can include:
Proof of medical necessity
Proof of condition
Treatment plan
Diagnoses
Treatment notes
A responsible provider will be documenting a treatment plan, diagnoses and treatment notes regardless of whether they take insurance. These records are available to you upon request, but are otherwise only shared with your consent if they should be needed to support other medical care or in the rare case of subpoena for court use.
TREATMENT LIMITATIONS
Another reason an individual may prefer to pay out of pocket for mental health rather than using their health insurance is that health insurance companies often have limits on how many sessions will be covered in a year for certain conditions. This can impose limitations on necessary or beneficial treatment. Let’s say you want to see your therapist every two weeks, but your insurance only covers 10 sessions in a year. You may end up spreading out your sessions to every 6 weeks in order to have them all covered in a year. This can also impact the relationship you have established with a provider and force you to feel as if you cannot move at your own pace and feel rushed to “finish” your treatment plan before the clock runs out on coverage. Alternatively, if you have to take a break with therapy because insurance has reached the maximum number of sessions, it may feel like starting over with your therapist when you enter a new benefit year.
COST and QUALITY of CARE
In order to take insurance a provider must be credentialed with an insurance company. Getting credentialed is considered a complex and time consuming process. Once a provider is credentialed they often increase their cost of services to the maximum allowable rate for insurance claims and to cover the administrative costs of filing claims. As an example, an insurance company may have a maximum allowable rate of $120 for a 50 minute session and pay only 75% of the claim so the provider makes $90. Additionally, insurance companies will conduct periodic audits of practices to ensure that record-keeping is thorough and up to the standards required to prove medical necessity for reimbursement. Audits and the other administrative demands of maintaining a credential increase the overall cost of operation.
ACCESS, AVAILABILITY, TAILORED CARE
Private pay providers frequently have immediate openings and flexibility with their schedules. Many insurance companies require prior authorization and finding a provider with openings that accepts your insurance can sometimes be challenging. Anecdotally, as a member of a Facebook group for mental health providers in Southern Wisconsin, I frequently see providers looking for referrals for clients who need to find a provider that accepts specific insurance. Many people experience switching insurance companies every year or two due to better rates, workplaces changing benefits packages, and so on.
Private pay providers have flexibility in session length, can customize treatment plans and use more creative approaches to care without concern that they will not be paid due to insurance rejecting a claim. For couples and family counseling, many insurance companies do not reimburse or significantly limit the number of sessions allowed. If you are seeking more tailored approaches or immediate availability and wish to work with someone consistently over several months, private pay may be a good option.
THINGS TO CONSIDER
While there are many benefits to working with a private pay therapist, it is also important to acknowledge that for some, the cost of out of pocket care can be an obstacle to getting necessary mental health care. Many private pay therapists offer sliding scale or no cost options in order to ensure that their services remain affordable. Don’t be afraid to ask about these options when you are consulting with a private pay provider.