Skip to main content

As a mental health provider, the idea of accepting insurance for therapy can feel daunting. Accepting insurance in private practice involves a lengthy credentialing process and requires you to cede some control over your pricing structure and the speed at which you’re paid. Because of these challenges, some clinicians and practices opt out of the insurance system altogether.

However, there are distinct benefits to accepting insurance, benefits that allow you to help more clients and grow a more successful private practice. These benefits are worth the extra work.

To learn more about the pros of insurance and how to accept insurance as a therapist, read on.

Private pay vs. insurance

Practices that don’t accept insurance are sometimes called cash only therapy practices or “private pay” practices. Private pay simply means that the client pays the therapist directly, with no insurance company covering any portion of the bill. If you offer superbills to your clients, some of them may seek reimbursement directly from their insurance company later, but you are still paid in full up front from the client’s pocket.

If you accept insurance, however, the insurance company reimburses you directly for some or all of the bill after services are rendered, and your client covers the leftover costs, if any. In many cases, insurance covers a substantial amount, allowing clients to afford services that would otherwise be out of reach.

Why your practice should accept insurance for therapy

Given the complexity of credentialing and claims submissions, is it worthwhile to offer insurance? Why not simply remain a cash only therapy practice?

In fact, there are many benefits to offering insurance that make it well worth the extra work.

You can help more patients

Not every patient who needs your services can afford out-of-pocket mental health costs, particularly those with low or fixed incomes.

Without insurance, your client population will consist exclusively of those who have enough income to pay the full amount every time—or those willing to go through the superbill process and wait for reimbursement. If you accept insurance, you open your services to a much larger pool of candidates, and increase your revenue as a result.

In addition, your clients will be less likely to discontinue treatment prematurely. Clients who pay out of pocket may begin treatment only to realize that they can’t sustain the financial burden, forcing them to discontinue therapy.

It improves your financial security

By accepting insurance, you’re able to predict a steady stream of income based on the number of clients you serve who have insurance coverage. This can help your cash flow as well as planning for the future.

Without insurance, you will rely on clients to pay their bills on time. This can make cash flow less predictable.

You’ll get more referrals

Chances are, your referral sources know plenty of clients who can’t afford mental health treatment out of pocket. These referral sources will send more clients to you if they know you take insurance.

This makes your referral sources more likely to keep you top-of-mind when searching for mental health providers.

You’ll enjoy a better reputation

With referral sources pushing more clients your direction, and more clients having positive and affordable experiences at your practice, your reputation will grow. Additionally, clients who can easily afford your services are more likely to remain with you for the duration of their treatment.

In general, the more accessible you make mental health services, the more you’re able to champion mental health as a priority in your community.

How to accept insurance for therapy

Once you’ve decided to accept insurance, how do you actually begin the process? Here are some general steps to help make it happen:

  1. Make sure you meet all the requirements. Depending on the policies for the state in which you practice, you may need a certain type of licensure in order to take insurance. You should also file your practice as an LLC or S-Corp, and ensure that you have liability insurance and your National Provider Identity (NPI).
  2. Research the insurance companies you’d like to work with. You’ll likely want to work with more than one, so as to further increase the patient pool that you can attract. Important things to consider include each company’s reimbursement rate, the size and quality of their network, and their authorization requirements for mental health treatment, among others.
  3. Go through the credentialing process with insurance companies. Each insurance company requires you to complete an approval process, which usually includes an application and submitting documentation of things like your professional license and liability insurance. Requirements may vary depending on the insurance company. This process can take months, so you’ll want to begin early.
  4. Get familiar with each company’s billing process. Each company has its own set of rules for submitting claims and receiving payment, and they will also have their own pricing structure and even scheduling structure for services.
  5. Build an efficient, organized claims submission process. Staying organized with insurance claims is a must. You need to track claims submissions and the status of each claim as it moves through the system. Billing platforms exist to make this job easier for you. You may want to consider a mental health EHR with built-in billing features.

While it may take time to become credentialed and perfect your understanding of insurance billing, the benefits of offering insurance for therapy far outweigh the hassles. As your client roster grows and you begin serving a wider variety of patients, your will see your revenue—and your reputation—grow as well.