A‬‭ Therapist’s‬‭ Guide‬‭ to‬‭ Billing‬‭ as‬‭ an‬‭ Out-of-Network‬‭ Clinician‬ ‭

November 20, 2024
by Sara Fischer Sanford, Licensed Clinical Social Worker, Certified Clinical Trauma Professional in San Francisco, California

After a decade in community social work and private practice, I am comfortable saying that I love health insurance. Once I began to understand the intricacies, having a knowledge of this aspect of private practice has proved invaluable. I help clients and colleagues alike to navigate their benefits. So, don’t be afraid of the topic and instead think of it as anything else we do in mental health. You can tackle out-of-network billing questions with a few “coping skills.”

Insider’s Tip: Don’t be intimidated by health insurance lingo. You can use this to identify coverage quickly!

As therapists, we can rely on the initials HMO and PPO as the roadmap to knowing how to support a client with accessing their Out-of-Network benefits. I typically will ask a prospective client to send a photo of the front of their insurance card or simply ask them the name of their plan.

Most Americans have what we call a Preferred Provider Plan (PPO). This type of plan allows the consumer to choose their “Preferred” licensed therapist, and this is an amazing benefit. Each PPO plan will allow for a certain percentage of their cost of therapy to be reimbursed. Most plans reimburse by a percentage and are written as such: 60/40, 70/30, etc. This information is often also printed on the front of the card, or on the first page of the policy. Clients can be reimbursed this allotted percentage of each session.

So here is some “Therapist Math” as an example:

“Sara is a new client. She has a PPO plan from her job. When she chose her plan last year, she chose a 60/40 plan because it was a good value for her and her family. Now that Sara wants to begin therapy, she has found an amazing therapist and is ready to begin.”

If you are the therapist, you immediately are able to know that Sara’s plan will cover 60% of the cost of your fee. Sara will be responsible for 40% of your fee. If Sara has a deductible, her health insurance company will “pick up the tab” after she meets that deductible.

When I explain deductibles, I always explain in terms of car insurance. For some reason, people are much more comfortable in understanding this topic than mental health coverage. If you have a car accident, your car insurance company will pay for the repair AFTER you meet your deductible. Of course, you choose that deductible when you buy your plan. This is identical to deductibles for healthcare.

Now you can see how your session fee will be drastically discounted for Sara solely by using her existing health insurance benefits to cover 60% of the cost. Many plans will pay a higher percentage, but as a therapist, I love to inform my clients that they can see a 60% savings from my fee. Not only that, but by billing her out-of-network benefits, the therapist does not have to navigate the headache of insurance credentialing and can provide better quality care.

Some Americans will have an HMO insurance plan. This type of plan is often more budget-friendly but is much more restrictive. If I meet with a prospective client that has an HMO plan, I always encourage them to choose a more flexible plan and then they can receive more coverage of my fee once their new plan begins for the year.

We all know that the therapist-client relationship is strong. So, remember your value as a clinician. Your clients will appreciate your willingness to help them navigate their benefits, and even those with an HMO plan will spread the word about your clinical skills and your practice will thrive.

The preceding article was solely written by the author named above. Any views and opinions expressed are not necessarily shared by GoodTherapy.org.