How to Navigate Private Pay & Insurance for Your Clients

Written by Howard Spector on November 9, 2016

Understanding the differences between private pay & insurance options

If you accept private pay, insurance, or even individualized payment plans for clients who become out-of-network or lose coverage mid-treatment, it’s important to explain your billing practices clearly and in some detail before offering or continuing services.

01-how-to-navigate-private-pay-and-insurance-for-your-clientsImagine this scenario: you’re in an intake with a potential client who is in crisis. She’s crying, visibly shaken, and wants to share what’s been bothering her. Do you ask her to pause so you can explain your practice policies, including, and especially your payment policies?

The answer is yes, though be sure to interrupt as kindly as you possibly can.

As Gutheil and Gabbard said, “Money is a boundary in the sense of defining the business nature of the therapeutic relationship. This is not love; it’s work.”

Discussing money with anyone can be uncomfortable, but it’s especially so when you’re talking to someone who needs your help. However, charging for services is what initiates the boundaries of a professional client-counselor relationship. To be seen as a professional, rather than a friend, it’s important to set up clear guidelines and boundaries when it comes to private pay, insurance, and fees or collections. It’s the same reason why you set a clock on appointments. In your early days you probably let a few sessions go on for hours because you didn’t know how to end them. Oops. It’s also the same reason why you don’t accept that Facebook friend request from your clients. Oops, again. But we learn from these lessons.

02-how-to-navigate-private-pay-and-insurance-for-your-clientsWhat is Private Payment?

Private pay is a monetary transaction for counseling services provided that takes place directly between a counselor and her patient.

If you’re accepting private payments in your practice, your prospective clients will want to know the rate you charge for a session. Setting up a fee schedule can be difficult, so it’s important to investigate the going rates of other clinicians in your local area. One benefit of private pay compared to billing insurance is that you’ll be able to set your own rate, which is often higher than what you’d receive from insurance companies. When deciding on the fee, don’t under-or-over sell yourself. Make sure the rate is something you’d feel comfortable paying yourself.

Private payment policies should be indicated clearly in your informed consent paperwork, and it’s worth it to include a clause that notes that fee structures are revised yearly, and rates may change, but only at that time. Also, have your clients sign the payment policies, agreeing that they have read the rules, accept the rate of pay, and understand how you bill for treatment.

One of the many reasons why private payment options work well in the private practice setting is because your clients may lose their health insurance after treatment has begun. Similarly, plans often change, and while you may have accepted their primary insurance, any variations in the policy may mean that you become an out-of-network provider. Receiving private payments allows these clients the option to continue services with you, instead of leaving your practice and finding a new counselor who does take their insurance.

What is an Insurance Payment?

While some clients may wish to pay out of pocket, others may come to treatment covered by their medical insurance. If you choose to accept insurance payments, you’ll likely collect a copayment from your client, and then bill their insurance provider for the remainder of their treatment.

03-how-to-navigate-private-pay-and-insurance-for-your-clientsIt’s your responsibility to contact the insurance provider to find out the dates of coverage, what exactly is the mental health coverage option on each policy (i.e., how many sessions can you bill for annually), and any information necessary to know about billing. Quick tip: make sure to find out if the client’s insurance runs on a calendar year or a plan year. If it’s a plan year, know the dates of coverage so that you aren’t billing for sessions for which the insurance won’t pay.

Using insurance, your clients will receive a receipt for their copayment, but you most likely won’t be sending them a bill in the mail (that is unless you’ve agreed to collect a copayment at a later date or a balance is due). A client may, however, request a statement or a superbill for their records or to submit to their insurance company for possible reimbursement for services.

Navigating between private pay, insurance, and the billing and collection of the two can be overwhelming for any private practice owner, so don’t let it phase you. Your attention deserves to be on your clients, not on finances. Let SimplePractice work for you by processing your electronic claim filing or collecting credit card payments at the appointment. Try us free for 30 days.

What forms of payment do you accept in your practice? Do you find that there are advantages to different forms or do you stick strictly to one type? Share your thoughts in the comments.

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About the Author

Howard is the CEO and Co-founder of SimplePractice. Howard has over 20 years of experience in the information technology industry. He is proud to have earned his MA in Counseling Psychology with an emphasis in Depth Psychology at Pacifica Graduate Institute.

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