5 Steps To Resigning From Insurance Panels

One of the most common questions that private practice therapists ask me is "How do I get off of insurance panels?" This question just came up today in my Private Practice Toolbox Facebook Group so I thought it would be a great topic for a blog post. In previous posts I've written about why I broke up with managed care (part 1) & (part 2), but this post will focus on how to do it.

The thought of letting go of the comfort of being on insurance panels can create a lot of anxiety for private practice therapists. After all, if we don't have clients, we don't get paid. Find comfort in knowing this equation. You only need about half the number of clients in a self-pay practice to make the same income (or more) than you made in an insurance based practice. Once I realized this fact, I felt a lot more comfortable resigning from insurance panels. Let's do the math...

Insurance:

Say you are seeing 20 managed care clients per week and you are reimbursed an average of $70 per client.

20 clients x $70 session = $1,400

20 clients x $70 session x 4 weeks = $5,600 per month

(then subtract your time or money spent in billing and paperwork)

Fee-for-service:

2o clients x $125 = $2500/wk

20 clients x $125 session x 4 weeks = $10,000 per month

10 clients x $125 session x 4 weeks = $5,000 per month

(with NO extra paperwork, NO delay in payment, NO denied claims, NO required diagnosis...)

So often we focus on number of clients instead of the quality of clients and the amount collected per client.

5 Steps To Resigning From Health Insurance Panels

1) Rank the insurance companies

Make a list of insurance panels and rank them from your most favorite to least favorite based on:

• reimbursement rates
• paper work requirements
• how quickly you're paid
• number of clients you see from each panel
• the type of clients generally referred
• your general feeling working with each panel

2) Resign in waves starting with your least favorite

Generally, I recommend to my consulting clients to resign in waves over the course of a year. Resign first from the panels with the lowest ranking - the ones that pay the least and are the most difficult to work with.

3) Check your contract for resignation requirements

Review your contract to check on the resignation process that you agreed to. Look at the time frame required. Do you need to give them 30, 60, or 90 days notice? Do you need to send in a written letter?

4) Beef up your web presence

As part of your plan to resign from insurance panels, it critical to invest in creating other referral sources. The most important being your web presence. Google is my #1 referral source. The majority of our clients who come to my clinic Wasatch Family Therapy find us online. The benefit of clients finding you online is that they've already read about you, your services, and your philosophy on your website and have chosen to contact you. This increases the likelihood that they will be willing to pay your full fee.

• Website - If you don't have a website, make that a top priority. If you have a website, make sure it's effective. Here are some common website mistakes and how to fix them.
• Blog - If you don't have a blog on your site, add one and start blogging weekly.
• Therapist finder sites - join PsychologyToday.com, GoodTherapy.org, and your professional organization's "find a therapist" site to help potential clients find you.

5) Know the benefits of self-pay and be prepared to educate clients

There are benefits to the client for paying out of pocket, instead of going through their insurance company, that they may not be aware of. As you make the transition away from managed care to a fee-for-service practice it's important to familiarize yourself with these benefits so you can educate your clients. A few of those benefits are: control over which provider you choose to work with, the course of treatment decided on by client and therapist instead of insurance company, and no diagnosis requirement.

Here's an example of how a provider educates her patients on the benefits of self-pay. Utah Psychiatrist Kelli Hyland, MD my colleague and consultation client, shares her philosophy in this blog post "Why Self-pay?"

(c) Can Stock Photo

5 Signs It's Time To Raise Your Fees

It's common for therapists in private practice to have anxiety around money issues like how much to charge per session, how to ask clients for payment, and when to raise your fees. Getting comfortable talking about fees with clients is crucial to private practice success. After all, you own a business. In general, I think therapists charge too little for their services.

Several years ago, I resigned from managed care and I raised my psychotherapy fees at the same time. Fortunately, my practice didn't suffer financially from those decisions. What surprised me most about raising my per session fee was that the perceived value of my services went up. "You don't take insurance and charge a lot? You must be really good," was a sentiment that I heard frequently from potential clients.

Interestingly, I've found that clients tend to invest more in the therapy process because they are investing more money out of their own pocket for treatment.

If you're considering raising your fees, consider these 5 signs that the time has come to raise your fees.

1) You haven't raised your psychotherapy rate in over 5 years

If it's been over five years since you've raised your therapy fees, it's time to revisit the issue. Your cost of living goes up approximately 2% every year due to inflation. If you haven't raised your fees you are likely making less than you made five years ago.

2) Your full fee is equal to insurance reimbursement

If you set your fees based on what insurance companies are willing to reimburse, then your fees are too low. Historically, insurance companies reimburse at a much lower rate than the providers full fee.

3) You aren't making enough money to pay your bills

Your private practice needs to serve your clients and provide a sufficient income for you. If you are not making ends meet in your practice or your personal life you may need to reduces expenses and increase your rates.

4) You have a waiting list

A waiting list is a sign that your services are in demand and that clients will pay more for your services.

5) You've completed specialized training or certification

Your added expertise deserves additional compensation. If you have recently completed advanced training, like certification in DBT or Emotionally Focused Couples therapy, for example, you may want to charge more.

When is the last time you raised your rates? How do you decide when to increase your fees?

photo credit: Corey Holms