Insurance panels for therapists: Should you get credentialed?

Figuring out insurance panels for therapists can be complicated, but it doesn’t have to be. In this article, we’ll break down insurance paneling for therapists, including pros and cons, how to get paneled, and more. 

We’ll also share the steps to become an in-network provider through insurance paneling, which is also called credentialing.

Should therapists accept insurance?

When establishing a private practice, every therapist, counselor, or clinician must consider whether or not accepting insurance (as an in-network, credentialed, or paneled provider), submitting insurance claims or providing superbills as an out-of-network provider, or accepting self-pay clients is right for their practice.

Accepting insurance can have many benefits including increasing access to mental health care and increasing opportunities to attract and serve more clients and diversify the populations served.

For private practice clinicians, insurance paneling for therapists allows them to operate as an in-network provider for clients with that particular health insurance, but it can also require significant time and energy. First, you need to navigate joining an insurance panel, and then you’ll need to file claims to be reimbursed for sessions and services you provide.

How to accept insurance as a therapist 

If you decide to pursue insurance panels for therapists, there are two different ways you can go about accepting insurance.

1. Get credentialed to join an insurance panel

Therapists who wish to receive direct reimbursements from a particular insurance company can choose to apply to get credentialed and join that insurer’s preferred provider panel.

The panel application process is somewhat involved, and approval can take several months.

Once the therapist is approved for a panel, the insurer pays the therapist for their services directly.

2. Choose to be an out-of-network provider

Therapists who are out-of-network providers can choose to provide superbills to clients, so that the clients can submit them for reimbursement from their health insurance provider.

Out-of-network providers typically bill clients directly, and then it becomes the clients’ responsibility to seek reimbursement from their insurers. 

If you wish to receive direct reimbursements from insurance payers, you’ll need to decide whether to apply to one or more insurance panels for therapists. 

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What does it mean to be on an insurance payer panel?

A payer panel is a group of healthcare practitioners who work with an insurance company to provide services to clients and patients enrolled with that particular health insurance company.

Every insurance company operates its own insurance panel for therapists and other providers.  Consumers and clients who are covered by a particular health insurance company are entitled to seek the health and mental health services and treatments covered under their plan from practitioners credentialed on that insurer’s payer panel.

The pros and cons of accepting insurance

There are potential benefits and drawbacks for all practitioners in private practice to consider with regard to insurance paneling for therapists and joining a health insurer’s payer panel. 

Dylan O’Hare, a medical billing health tech expert with more than 10 years of experience as a medical biller specializing in mental health, says this may be one of the most important decisions any private practice clinician will make. 

“Of course, there’s no right or wrong answer to this question,” O’Hare adds. “And, as a small business owner, you may want to make the decision based on what will help you achieve your goals and generate—and sustain—your revenue goals.”

Benefits of joining a payer panel

First, let’s look at the potential positive aspects of joining a payer panel. 

One of the most significant benefits of joining an insurance panel for therapists is that it opens practitioners up to a wider pool of potential clients, and it makes therapy more widely available to clients who may not be able to afford therapy otherwise.

Other benefits include free visibility on the health insurance provider website and directory and a smooth cash flow, says O’Hare. 

Health insurance companies tend to have predictable turnaround times—often within 30 days—for paying claims to providers. This can make it easier to plan ahead and budget for your practice.

Disadvantages of joining an insurance panel

On the flip side, getting credentialed and joining an insurance panel for therapists means you won’t receive reimbursement unless you submit claims with accurate medical codes. This can require your time and attention, which are likely already in high demand. 

Robust HIPAA-compliant billing software, such as the options included SimplePractice EHR practice management software, helps maximize efficiency, however you’ll still need to address denials and respond to payer audits. 

“You’ll likely have to see fewer clients every week if you want to stay on top of insurance reimbursements,” O’Hare says.

According to O’Hare, if the idea of adding non-billable hours to your workweek isn’t ideal, you could consider hiring a biller or administrative assistant to join your practice. This can be costly, though, he adds, as you need to find someone you trust because you’re essentially putting your financial success in this individual’s hands.

Another option is to outsource the billing to avoid overhead costs. 

When it comes to the involved process of applying to an insurance panel for therapists, keep in mind that it often takes health insurance payers several months to decide whether they’ll accept new practitioners onto their panel. 

If the town, city, or geographic area you practice in is saturated with therapists, insurance payers tend to be selective and choose only the most experienced practitioners.  Payers also periodically close their panels to new providers. 

“You could find yourself in a situation where you fill out all of the paperwork and wait a couple of weeks only to find out that the panel has closed or was already closed,” says O’Hare.

Inquiring whether the panel is open—and applying as quickly as possible—is crucial.

The pros and cons of self-pay

One of the biggest advantages of choosing to do self-pay and not accepting insurance is eliminating the administrative time costs related to billing and appealing denials, says O’Hare. 

Therapists who choose the self-pay option, don’t need to submit any insurance claims for payment. This means, with self-pay, therapists—not insurers—decide whether and how often to see patients. 

Private practitioners who go with self-pay are not bound by the need to obtain prior authorization or meet an insurer’s sometimes stringent documentation requirements. They also avoid potential insurance payer audits and recoupments.

Another benefit for private practitioners who choose self-pay is that they are not restricted to an insurance payer’s contracted reimbursement rate.  This means they can charge self-pay clients more than what insurance payers would reimburse for while also offering a sliding scale session cost for clients with financial hardship and need.  

“With self-pay, practitioners are empowered to charge what they’re worth without any of the headaches that come along with insurance billing,” says O’Hare. “You also avoid awkward conversations with clients about their insurance payer denials that can inhibit progress in therapy.”

One disadvantage to self-pay is that you may find it more difficult to attract clients who are willing or able to pay out-of-pocket for therapy.

You may also need to invest more in marketing your practice, including getting your practice listed on a directory such as the TherapyFinder Directory from SimplePractice and creating a website for your practice.

Insurance paneling for therapists is not ‘all-or-nothing’

Some therapists may choose to primarily target self-pay clients but also participate with a single insurance panel for therapists.

“Some practitioners may accept one particular insurance plan in the area because they’re happy with the reimbursement rates,” says O’Hare. Other practitioners become credentialed to join an insurance panel for therapists initially to grow their practice, but may later, over time, decide to drop some or all panels due to low reimbursement rates or low client volumes, he adds.

Still others practitioners don’t accept insurance, but they are willing to provide a superbill to clients so that patients can bill their insurance directly. 

Some provide courtesy billing, meaning they file insurance claims to payers so the client receives reimbursement. 

In both scenarios, clients are responsible for the session fee, however, they may be able to take advantage of their health insurance’s out-of-network benefits to pay for a portion of the visit. 

These benefits sometimes offset the cost of the visits, allowing patients to stay in treatment longer.

How to choose which insurance panels to get credentialed with

If you decide to become credentialed with insurance panels for therapists, applying to join every insurance payer panel isn’t the most sensible option, it makes more sense to take a strategic approach to selecting which insurance company or companies to panel with. 

For example, in regional areas saturated with providers, getting credentialed and paneled with a particular insurance company may help you stand out to new clients in a competitive market—especially if you’re the only therapist in your area who accepts a particular insurance plan. 

Credentialing questions for therapists to consider

1.What is the insurer’s market share in your town, city, or state?

For example, which health insurance provider is offered to employees by the largest employers in your area? You may wish to prioritize getting credentialed with these insurance panels for therapists because their enrollees are your potential clients.

2. Do you focus on older client populations?

If you specialize in aging and geriatric mental health, you may wish to consider applying to become a Medicare provider.

3. Do you focus on children and/or client populations including people with limited financial means?

If so, you may wish to apply to become a Medicaid provider in your state.

4. Is the insurance panel open to accepting new providers?

If the answer is no, you’ll need to move on—at least temporarily.

5. What are the credentialing requirements for the insurance company’s provider panel, and do you satisfy them?

If not, how difficult and what is the cost for you to meet these requirements?

6. What’s the insurance company’s contracted reimbursement rate?

How does it compare with the Medicare fee schedule? Ideally, you want to receive a reimbursement that is at least 100% of the amount Medicare would pay. By participating with insurance panels for therapists who reimburse below the Medicare rate, you may miss out on the opportunity to fill those appointment slots with self-pay clients or clients whose insurance payers reimburse at higher rates for that same session.

7. Are there requirements and restrictions to receiving reimbursement from the insurance payer?

Some insurance payer restrictions include requiring pre-authorization before a service. Additionally some insurance companies have rules about the session lengths they’ll reimburse for and how many sessions they will reimburse for a client each day or each week. Insurance companies also often have a maximum number of sessions or treatments that they will reimburse overall for a specific client. It’s possible that a client’s mental health support needs may exceed the services the insurer is willing to reimburse the practitioner for.

8. How easy will it be to work with the insurance payer?

For example, what’s the quality of the payer’s provider relations? Is it easy to reach the payer, and are staff knowledgeable and friendly? What are the payer’s documentation and prior authorization requirements? Is it an onerous process to get approval? Does the payer continually limit the number of sessions? Consider asking other local therapists for input and feedback.

9. Should you be concerned about client deductibles?

Most insurance companies have different tiers for coverage plans with a range of deductibles. You may want to familiarize yourself with the specific plans (including high deductible plans) that particular health insurance companies offer.

Sources

• APA Services. (2016) Medicare provider enrollment. American Psychological Association. 

How SimplePractice simplifies insurance claims and billing

SimplePractice is HIPAA-compliant practice management software for therapists that can streamline the administrative aspects of running your private practice—so you free up more time for the things that matter most to you. 

With SimplePractice, you’ll simplify your insurance claims. Enrolling, accepting, and processing insurance become so easy, you’ll actually want to accept insurance.

Create, submit, track, and reconcile claims all in one place—no more spreadsheets, separate logins, or ledgers. Automate your insurance accounting with integrated payment reports (ERAs) for easier, more accurate bookkeeping.

Sign up for a free, 30-day trial of SimplePractice. No credit card required.

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