What Your Therapist Hasn't Told You About Using Insurance

(I have updated this post to reflect the changes to managed care in my area since 2010)

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Once upon a time, I started out as an idealistic new therapist. My work with a non-profit as well as my heart told me that mental health care shouldn't be a privilege for only the wealthy. 

And so I decided to accept insurance, hoping it would help ease the burden of cost for those seeking therapy. And I tried. I really did. Even when I was spending hours on hold (to get payment I had already been promised). Even when I had to write off payment I was owed because it was costing me too much time to pursue it. Even when I was full of private pay clients.

It was a bitter pill to swallow, but I had to admit it: I could no longer afford to be in-network for insurance But I learned a lot of things along the way. Things consumers don't know. Things that I would want to know if I were you. And so I'm here to tell you the

Things I wish all clients knew before/when they are using insurance-approved therapists.

1. Your therapist has to diagnose you to get you reimbursed.

Insurance doesn't reimburse for "marriage therapy" or "I'm having a hard time" or even "grief". It is a medical model, and so this means that payment can only be for a diagnosis. This means that (even in family therapy) a person has to receive a label. And these labels will be part of your official record permanently. This might never matter to you. If you are one of the fortunate ones who has medical, life and disability benefits through your employer... you might never worry about this. But if you're someone who might ever be unemployed, self-employed, or need to purchase your own benefits- a mental health diagnosis can make the difference between preferred coverage or none at all.

2. Your records are not protected.

Your insurer can audit your records at any time they wish. This means any details that your therapist might not have included in the paperwork (perhaps for good reason) is technically open to the eyes of any "claims specialist" the company hires. Again, this might not matter to you. But if you hold high clearance for a job, or have other reasons you want your information to be held confidential- this is important to know.

3. Your care is dictated by the insurer

Most insurance requires some sort of treatment plan to be submitted by in-network providers. This means that (rather than giving you the care that best fits your needs) the therapist is responsible to the (non-mental health professional) claims representative for how you spend your time. To put it simply, an in-network therapist works for the insurance company, not you. It doesn't matter what you and your therapist decide is in your best interest, it needs to fit their matrix of decisions. It also has to fit within the allotted sessions which are determined ahead of time, not based on need.

4. Insurance almost never pays the full fee

This means you are either going to be responsible for the remainder (which you need to clarify ahead of time) or it means your therapist is working for less than a fair market wage. Which leads me to my final, and most unpopoular point.

5. Insurance limits your options

I have said it before, to an angry response. I cringe even as I type. But the truth is: I know very few licensed and experienced therapist on insurance panels.  I have been in this profession over a decade and supervised over 25 interns on their path to licensure.

That is a dirty secret. I'm not supposed to say that. Therapists don't like that, because it is a sad commentary on the availability of quality mental healthcare. Consumers don't like that because it is obviously unfair. But it is accurate in my area. And so you need to know, that choosing to utilize an insurance-approved therapist means your options will be severely limited.

So what can you do about it? There are options!

1. If possible, pay cash for sessions. 

This ensures that your records and diagnoses are entirely confidential documents. The content of your session stays entirely between you and your therapist. And your care is dictated by what you think you need, not your insurer. Many people have a Health Savings Account (HSA) that will help them pay for sessions and operates just like cash- but they don't realize it.

2. If you cannot afford to do that, consider a non-profit (like the one I co-direct)

Many areas have nonprofits that offer low fee counseling based on income or other eligibility. That takes a little digging, but often you can find it on google by looking for "low fee" or "affordable" or "nonprofit" counseling. You will likely see less experienced clinicians, but you will maintain control and confidentiality.

3. If you need to bill insurance, but have a PPO, attempt to pay for therapy up front and submit for reimbursement.

 This will cost you up front, and your diagnosis will be recorded, but it gives you the freedom to choose any licensed clinician and their records are more protected than if you go with an in-network therapist. Here's an article I wrote about how to do that.

4. If you absolutely must bill insurance and see an in-network therapist, do your due-diligence ahead of time. 

If they are in-network with your insurer, they should have an idea of what level of transparency your insurer expects. They likely know if their notes will be requested, if their treatment plans will be required, and what diagnoses they will need to give you for coverage. Asking ahead of time can help you decide how you want to proceed.

This news does not feel good to report. I don't like the way it is. I hope for a world where quality mental health care is available to everyone that wants it. But if I were you, I would want to know. And I believe in the golden rule. I think consumers deserve to know the nitty gritty details. In fact, I think educated consumers are our best shot at system change. And so... there it is.

Hoping for a change,


  1. Hey Krysta--

    Thanks for a well-informed article. I've recently been toying with the idea to withdraw from the insurance panels b/c of the headache and time suck.

    I feel bad doing this, as I've often said that people who have insurance for mental health benefits are not the cause--it's their managed care company.

    Then I had a thought of "well, it's not like they cannot go anywhere else for therapy."

    This day may come sooner than expected:).

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  2. Hi Krysta,
    I am an MFT in Las Vegas who has never accepted insurance and I have been in practice for 9 years. I include info on my website about my reasons for not accepting insurance and how this benefits the client, but I am really impressed w/ how you write about it in this article. I am including a link to your article, credited to you, on my website - for additional reading for my clients.

    Wishing you all the best,
    Lourdes A Viado

  3. Krysta,
    I find that several of your views reflect a failure to grasp how people are struggling in other parts of the country. I am also offended by your accusation that therapists will give appointment slots to full-pay clients over insurance clients, and your insinuation that if a therapist is worth her salt she does not have to accept insurance. I had a full psychotherapy practice in San Francisco for several years and was able to stay off insurance panels. However, when I relocated to the northeast corner of Connecticut, where the economy has not recovered from the 2008 debacle and many people are still losing their homes to foreclosure because they can't pay their bills, I discovered that it is impossible for a clinician to avoid accepting insurance. In order for people to obtain the therapy they need, they must use their insurance. Otherwise, they would have to go without. You may want to reconsider the position that you posit as the "absolute truth."

    1. Thank you for taking the time to comment. I appreciate your perspective. I urge you to re-read what I stated: "Those who are full with clients do not need to go through the headache of managed care. So they don't. The ones who are not full are more motivated to jump the hoops" I believe you illustrated that very clearly in your personal practice.

      Similarly, I am located near San Francisco, CA. I cannot speak for the rest of the country. My intent was never to speak for the "other parts of the country". I am not a national spokesfigure... only a local therapist in practice. ;) Obviously insurance, billing, and licensure issues are very state specific. It might be very informative for you to be able to offer your own blog post, specific to your region of Conn. as it sounds very different from here.

      For instance, what I see more and more often here is that insurance offers very little reimbursement for therapy (if at all) and so the hoop jumping does not garner much help for the client in the end. It's too bad really. Things are changing quickly these days though, so perhaps that will change too.

      Again, thanks for taking the time to comment and share your thoughts. I wish you well!

  4. Wow! I read this and was completely dismayed and surprised by your recommendations and justifications. Speaking from a client perspective here, if I saw something like this on your website, I would RUN to find someone else, not because of the insurance complaints, but because of your utter lack of understanding of a patient's point of view. If you don't want to deal with the payments and hassle of insurance, don't accept it. Plain and simple. But to put this burden on clients or to suggest that they won't get quality care from someone who DOES take insurance is both egotistical and lacking in compassion...two qualities I wouldn't look for in a therapist. I would know this is all about the money, not about care. So why DID you decide to become a counselor in the first place?

    1. Thank you for taking the time to give feedback. I realize that my candor is not everyone's taste. Like I said, "I would want to know! I think you deserve to know!" But that doesn't mean I'm right for you.

      The good news is: I'm nobody! Just a therapist working in a private practice in a state that has a terrible managed care problem. I don't speak for the whole of therapist-dom. And that's good because maybe that means there are therapists who don't share my disillusionment. (I want to be them!)

      In any case, hopefully my tone in this article conveyed the great depth of my thought and care towards my clients and the managed-care-conundrum. It is heartbreaking!

    2. I don't see why people would get upset at her for stating reality. That's all it is, really. Not her fault.

  5. Hi Darcy,

    I read your article because I'm curious about how reimbursement is going for MFTs. (I will be deciding between an MSW and an MFT.) I appreciate your perspective. Thank you for taking the time to write the article and for leaving it up.


    1. Good for you for taking the time to research before deciding between the MSW and MFT. And now, we have the LPCC added to the mix!

      As far as insurance reimbursement goes, I believe it's all the same for the moment. Of course, politics can always change that. In fact, if they had made the grandfathering easier I would have double licensed myself as an LPCC and MFT just to cover my bases. But alas, they decided on a large amount of education units that made it not feasible.

      Starting from scratch, you have a lot of interesting options ahead! Best of luck to you!

  6. Hi Krysta,

    Thank you for taking the time to write about your perspective and share it. At one time, MFTs had a hard time with being covered for services; MSWs had it easier. I was just taking a look at that, as I will be deciding on my master's studies down the road.

    I'm glad you shared how the decision to accept & process insurance affected the quality of your life. Making a living, having time to be healthy, and having time to live a balanced life are very important. I, for one, would highly respect a therapist who is a model of self-care and doesn't try to be a martyr.

    BTW, you practice in my old stomping grounds - Roseville, CA. I've moved to colder climes in British Columbia, Canada. Roseville sunshine sure does sound inviting right now!

    Thanks again!

    1. Oh I hope you're staying warm! We have had plenty of sunshine to go around lately. I'm told it is too much- now we have a drought. But I sure do enjoy it.

      Good luck in your future studies! Thanks for the encouragement. :)

  7. I love your candor. All therapists who are somewhat business savvy-think like this-you are just open to sharing it. I think you ARE compassionate to inform people how it all works so they can make the best decision. If someone doesn't like the truth about how the system really works and think that the better you get at your profession you should still make the same as someone starting out then-then probably don't have a true understanding of giving and taking AND business in general. Your perspective is refreshing. Love it.

    1. Thanks for your feedback LD. I appreciate the encouragement :)

    2. Hi Krysta,

      I am a cash-only therapist in NC. Surely there are differences between my local area and yours, given my very different part of the country, but despite that there is so much you've said here that resonates with me! I have been called foolish, stupid, willfully blind, and many other things by others who have criticized my decision to not contract with insurance. I have been feeling very lonely and isolated in the local therapy community as a result. Most of my colleagues say of insurance, "it isn't hard, it just takes a few minutes" and yet these same colleagues continually complain of paperwork woes. Your viewpoint is immensely validating for me and I wanted to thank you for putting this article out there. It has helped me to feel much better about my slowly growing practice. I'm 25 and fresh out of school (graduated just one year ago), and being new I am of course making plenty of mistakes. That said, I have been adamantly against signing any contracts with managed care companies. It just feels bad to me and seems like a tactic that many other therapists do to ensure financial security. The problem is the huge and many costs associated with taking insurance. Like you, I only bill out of network insurance at this time. I just give my clients a receipt and instructions on how to send in their receipts.

      Thank you for encouraging me! This is just what I needed at this time.

    3. Josh- I am so glad it was encouraging to you. I love hearing from those who are newer in the profession. I feel it is so important to encourage one another. :)

      Something that has worked exceptionally well for me- I pay for myclientsplus (online website) where I am able to submit insurance receipts electronically for free (the website is a flat monthly fee). All I do is make sure to note that my client paid me in full, and the insurer will reimburse the client any money that is owed them. This has been a good compromise for my clients who wish to receive insurance money. It makes it easier on them than submitting a paper insurance bill. And it works for me, because any discrepancies in payment become their responsibility to follow up.

      Plus, all my client info is available from any internet connection for me... so I can get phone numbers and addresses even from my home should I need them. Something to think about! Most of my clients don't bother billing insurance, but for the few who do still need to- this helps them not get overwhelmed by the process- and it's instant for me. I don't have to do any additional work really (other than initially putting in their insurance card info).

      Best wishes in your new practice! It is really amazing work!

      There must be some differences between states in this case- we can't bill insurance until licensed (usually takes 2-5 years post graduate education)... so I'm interested in your process and what that entails? It sounds different!

  8. Krysta,

    Thanks for the wonderful recommendation on the myclientsplus. I will admit, the site looks very barebones and not the most "polished" or "attractive", but I am considering a 30-day free trial. I would love to list you as a referral person so that you get some credit for referring me.

    With regard to your question about insurance, let me clarify! I cannot bill insurance. However, I am an accepted Out of Network (OON) provider. I tell this to clients. I also explain that even if I had the choice, I would NOT bill insurance but will always, regardless, be happy to give a receipt for OON billing. The myclientsplus website seems like a nice tool I may have for doing this, but $19.95 is a steep fee for a simple service like this. I am still not sure!

    North Carolina does expedite the process for MFTs, though. We have a provisional license we can attain immediately upon graduation. I sat for (and passed with flying colors!) my national MFT exam 4 months before I graduated. Talk about things moving quickly :) I started in private practice right out of school and 9-10 months later I am seeing a decent sized caseload. That said, I could be far busier! I know it will come with time. I am already seeing generous amounts of word of mouth referrals, plus my efforts with Psychology Today and Google Ad Words Express.

    I would love to keep chatting - and I am DEFINITELY going to follow your blog, since we appear to think alike!

    1. Josh- Is it $19.95 for you? I'm fairly certain its $29.95 for me!

      Just to be clear- it's "bare bones" because only you see it- no clients. ;) So it's not attractive really. It does have some integrated calendar function and credit card billing etc... but I don't use those features. I tell you, the automated CMS-1500 forms are worth it to me. No printing or filling out. But maybe I'm paperwork averse.

      Interesting the process No. Carolina goes through. In CA, we must practice as interns (post graduation) for 3000 supervised hours and a minimum of 2 years before sitting for 2 different exams (which usually also take an additional year because of state board processing time). I'm a little jealous that you were able to be in your own practice so quickly! Wow- big difference!

  9. I have some really mixed feelings about your posting and perhaps it's because I'm soon to graduate with my Psy.D not a masters and I know that they programs train clinicians differently but I doubt that would account for all of my dismay. Frankly, it's alarming to me because I have never (nor do I plan to) share my billing struggles with my clients. Although my work as a psychologist will be a "job", I chose this profession to help and support the positive growth of those I'm entrusted to support. I feel that by alerting them to billing challenges sends a message that I'm not there for them, I'm there for the money and this is not foundation I want to build rapport on.

    So while I think it's helpful to let clients know about the possibilities of how their information may be accessed, I have concerns that this post airs on the side of scaring people into paying quick and easy cash (which only benefits the clinician) and inaccurately states that a person can "pay for therapy up front, and submit your receipts for reimbursement. In the end you come out of pocket the same amount". I say this is inaccurate because anytime a person uses an out of network provider the reimbursement rate is ALWAYS lower than in network providers meaning that the client holds more of the burden.

    As, I said, I can see the benefit of "some" of the info you present here but I do not agree with the majority (or the tone)... And yes, I am also in the San Francisco bay area.

    1. Thanks for taking the time to comment. I certainly understand that there are many students (and clinicians) who do not chose to self-disclose with clients. And plenty who do not like the "business" of private practice, and would rather not discuss it. I know you are in good company. Perhaps a majority!

      Again, I know my candor is not to everyone's taste. And that's okay! I understand the concern. I gave this a lot of thought over the years as I have received plenty of feedback on it. Ultimately- I continue to keep it up because:

      It's something *I* would want as a consumer. So in essence (as many therapists) I seek to talk to the type of client I typically attract: a business- minded, independent, highly-educated consumer who doesn't want a hierarchical relationship with their therapist. Believe it or not, I have been thanked by clients for writing this post. And maybe even more to my pleasant surprise- I have been selected as a therapist by this post! That's always a cool experience.

      Like teachers, and mentors, and any service professional, therapists come in all stripes and colors. I really honor that your thoughts on this topic might not mirror my own.

      I also know this is a topic I changed my mind on... as I was in the business longer. I got tired of watching clients (who I cared deeply about) get screwed over by terrible billing practices and their insurer. I got tired of them (unknowingly) being labeled and having their confidentiality breached. I thought they deserved to know what was happening to them! This took time and experience for me to feel the way I do. Initially I started out feeling hell-bent on offering insurance-approved therapy. It wasn't until I saw what was happening to the clients that I got upset about it.

      Best wishes on your own process!


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