Should I become a provider on all the insurance panels in my area? One can find many practice management consultants promoting the “cash only” model of outpatient psychotherapy. There are many virtues to this plan. For example, a higher hourly collection rate, less paperwork, and no need to worry about an insurance company audit.
Downsides
There are several downsides of the cash-only practice. Here are some:
- Finding enough clients with the financial resources to pay out-of-pocket fees
- The additional marketing required to keep one’s schedule filled
- Clientele with less socioeconomic diversity.
Criteria
Not just anyone can make a cash-only practice work. First, it works best if the practice resides in a fairly affluent area. Second, the clinicians must be in demand enough for clients to forgo the use of their insurance benefit. Many will not be able to meet these criteria.
Mission drives the decision
From very early in my practice I chose to join as many insurance panels as I could. Why? In a single word: mission. It was important to me that we create an organization that could meet as many people’s needs as possible. We hire people with a desire to have a broad impact in our communities. Of course we needed to make enough income to live comfortably. We found we could do that inspire of accepting the lower-paying insurance companies.
This sort of mission meant taking the insurances that potential clients in our communities might be using. We currently are on about forty different insurance companies’ panels. Yes, that vision meant that the collections rate is lower than for cash-only clients. It also meant we did not have many openings in our schedules. And we have a wide range of clients from many SES levels. Furthermore we could say yes to most of the potential clients who called our office. And by doing so, we could please the referrers who sent them. A cash-only practice would mean turning away a large number of callers seeking our services.
Recently in Illinois, Blue Cross Blue Shield (BCBS) contracted to become a Medicaid provider. They asked us to join their network. We were fearful of what the administrative burden and fee schedule would be. To our surprise, neither was an issue. In fact BCBS Medicaid is paying at a higher rate than some of our other insurance payers. By being willing to join insurance companies of all sorts, we cover a very wide range of clients, adding interest and a reasonable income as well.
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This is an excellent article, thank you.
I am a therapist in private practice. My focus is on body mind therapies. For a while now, I have been wondering if / when insurance companies will cover such healing practices as : acupuncture, t’ai chi, and an evidenced based recent form called T’ai Chi Chih which is currently being taught to veterans with PTSD. (www.taichichih.org ). What would have to happen to have such healing modalities approved by insurance companies ?
In general, insurance companies are reluctant to cover any treatment they are not required to. Why? The cynical answer is that that is how they make money. The greatest profit comes by collecting as large a premium as possible and then restricting payments as much as possible. That is not totally fair to insurance companies but it can feel that way sometimes.
So who decides what gets covered? Insurance companies do respond to the scientific literature about evidence-based treatment but they also respond to political and social pressure. When an insurance company restricts coverage too tightly, and there is enough of a backlash, then they change. So to get coverage of acupuncture and T’ai Chi Chih, there must be a substantial amount of evidence of effectiveness and the demand has to get high enough. Then with enough public pressure, it will happen.
BTW, the military is often on the frontline of collecting evidence of effectiveness. To be in the military is to face trauma and treating trauma has become a prime goal of the military.