At times, working with managed care insurance panels in private practice felt like dating a bad boyfriend. I was constantly investing more time and attention than "he" was in the "relationship" and it started to wear me down. I got up the nerve to break it off for good. I've never looked back.
I understand that building a practice free of managed care isn't for every therapist. I am grateful for excellent colleagues who participate on insurance panel because and there is a great need for their services and I frequently refer clients to them. However, if you're a private practitioner considering building a practice outside of managed care, I share my experience of resigning from managed care to give you the courage to take the leap, and the faith to know that it can work. So here's my story...
After I received my clinical license I started applying to any health insurance panel. I just assumed that's how you're "supposed" to get clients in a private practice because every therapist I'd known had followed this path to get referrals. I was accepted to many panels and my practice started to grow. I was ecstatic.
However, as time went on I started to resent many aspects of working with managed care panels and it began to effect how I felt about my work in general. I felt overworked and drained and knew that something needed to shift if I was to be in private practice for the long haul. Here's what I started noticing about my relationship with managed care.
- Excessive paperwork: I was spending almost as much time performing unpaid work (paperwork, phone calls, tracking authorizations, and billing) as I was spending seeing clients. I went into this field to do therapy, not paperwork.
- Reduced income: I resented writing off 40-60% of my fee upfront just to be placed on a list with dozens and dozens of other therapists. The managed care companies weren't doing anything to market my practice and yet I was being asked to take a huge pay cut to work with their clients.
- Mandatory diagnosing: I grew tired of having to diagnose every client who walked into my office in order to get paid. When I met with a client who didn't have clearly diagnosable symptoms I was faced with a dilemma. Do I stretch a diagnosis just so I can get paid, or do I do free therapy because insurance won't reimburse without a diagnosis?
- Denied or delayed payments: Being denied reimbursement for a variety of reasons and receiving payment weeks or months after I had performed the service grew frustrating.
My uneasiness led me to critically look at the financial numbers and I was astounded by the amount of money I was writing off just to participate on managed care panels. I decided that there had to be a better way to for me to run my practice. I realized that if I resigned from managed care panels and transitioned to a fee for service practice, I could see half the number of clients weekly and make the same income. Or, I could see the same number of clients and double my income. To top it off, I could eliminate most of my unpaid paperwork hours. Work less and make more? It was a dream come true for a private practitioner and mother of young children.
I resigned from all managed care panels in 2007 and raised my fee by 10%. Since then, my private practice, Wasatch Family Therapy, has grown from a solo practice of one to a thriving clinic employing several therapists. We are adding a second office location later this month. It has taken some relentless marketing, consistent networking, and social media skills to keep a practice growing without managed care or any outside contracts, but it has worked. If I can do it, you can too.
Blogging is a great way to talk to potential clients about your private practice services and specialties. You can set up a blog account for free at
As healers, we genuinely like to do our work. Guiding clients through the therapy process and seeing them make progress is why we do what we do. But if you're in private practice, you know there's a lot going on in the back end and that it's crucial to run an efficient and organized business.