(This is the first of a two-part post on terminating your
relationship with insurance and managed care companies.)
Earlier this month, I received this email from Marian Moldan, LCSW-R in New York. She wrote:
I have been in private practice for the past 30 years. I have recently decided to leave the insurance panels because they are eating up my family and client time with little or no financial return to speak of. Do you recommend sending a letter to clients first to prepare them for the change and then sending a letter to the panels? Thank you for a wonderful website, Marion.”
Marian! Congrats to you! And, I’m so glad you asked . . . . I, too, started out by applying to get on a zillion insurance and managed care panels. After several years of spending more time on billing, getting re-authorizations, completing mounds of paperwork, and ultimately losing thousands of dollars when the insurance companies refused to pay for my professional services already rendered, I resigned from all panels. I am happy to say that I have now been a fee-for-service practice for about 15 years and it feels great . . . !
Before you notify your clients of your decision to remove yourself from insurance panels, you should take time to read your contracts. Remember you have entered into legal obligations with each of the panels that you are on. Most insurance companies stipulate the process for terminating your relationship with them. All require written notice from a provider. Some require a minimum length of time before the termination goes into effect. They may even require that you continue to work with clients already under your care at a previously contracted rate. Read your contracts before you do anything.
If you are ready to leave insurance panels behind, re-read those contracts and check back in here. In my next post, I’ll tell you what other steps you should take to ethically, professionally, and effectively end your relationship with insurance and managed care.
Thank you so much for this posting. My partner and I opened a practice in March and were just starting to consider working with insurance companies! After reading this post, I have renewed my initial
feel that I’d like to try to build my practice without working with insurance companies.
Thank you so much for sharing this important information. Do you know if you get off the insurance panels if you would still be required to do an audit if Insurance request,
Hi, Glenetta! I’m so glad you asked this question!
I am assuming that you are asking whether or not you are required to comply with a request for an audit by an insurance company with which you have previously entered into a contractual relationship and not by some other entity.
This typically dictated by your contract with that specific company.
So, unless you have agreed to be audited after you have terminated your work with that company, the answer would be no – you would no longer be required to do so.
However, some insurance companies do specify that even after choosing to quit seeing their clients, your contract remains in place to the extent that you may be audited for all accounts that have not been settled.
Under those circumstances, you should comply with such requests.
And, note that this does not even cover the ethical standards of practice.
If you have assured your client that you will see her under the terms of her insurance company and later choose not to, when the insurance company then requests an audit, you may be ethically required to comply.
It’s not simple, is it?
This is one of the many reasons that I caution therapists to not enter into contractual relationships with managed care without careful thought and full understanding of the expectations.
Best wishes to you on your journey!
This is great, but for those of us looking at private practice, how to start out without being insurance panels?
Hi, Jill! It’s good to hear from you! OK, so I’m thinking this is a really great question but . . . it’s a little broad so I’m not sure I’m understanding what you are asking . . . . The short answer is that you will explain to prospective clients (when you are talking about fees) that you do not work directly with an insurance company but will support your clients in doing so. And, you will give clients receipts for them to file with their insurance companies if they choose to do so.
Is this what you were asking for, Jill? Or, have I missed the boat?
Hi, Tamara.
It seems that most of the problems I read about on your site regarding the mounds of paperwork associated with managed care involve clinicians who are doing all of their own billing. The clinician from whom I rent space pays a professional 10% of her fees to do all the billing and to let her know when new treatment plans are due and that sort of thing. She says she has lost no money as far as she knows – except for that 10% a month. When you were in with the managed care companies, did you do all your own paperwork or did you have help as my colleague does? Of course, there are other reasons to avoid working with managed care beyon the red tape, but that hassle is often given as one of the main reasons to enter into a fee-for-service practice. I look forward to your reply, as always.
Allen
You are right, Allen. You can pay a service to do your billing and collect your fees for you. Many physicians use this type of service and the rate you should expect to pay is about 10% of whatever they collect. I see that I need to write a post about the pros and cons of using such a service but suffice it to say that both exist and I opted not to use one.
If the hassles were limited to simply sending bills and receiving money, I might not object. But, in addition to completing treatment plans, many managed care companies require you to repeatedly seek initial and repeated authorizations (from them) for coverage of your services, audits that require additional paperwork and time spent on the phone trying to convince them of the medical necessity for your services, resubmission of paperwork that was rejected because or errors (yours or theirs), etc. Then there are the delays in receiving payments, and all of the other “gray” areas that swayed me to end the practice of filing on insurance for my clients.
But, yes, there are billing services that would be happy to work with you to save you a slice of that headache.
This is for the Roll Call. I am a 46 year old father and husband. I have worked for the Georgia mental health or prison system for most of my professional life but I have finally decided to start my own practice. I work full time as a correctional mental health counselor besides being a husband and father and a Stephen Minister at my church, so I am starting out slowly. I am finding that there are many people who are willing to pay cash though, in a rural Georgia county like mine, you have to be willing to consider a sliding fee on a case by case basis. I think that by charging cash up front, I am more likely to attract clients who are interested in makeing changes in their lives. So far, I’m enjoying it but I continue to weigh the managed care vs fee-for-service options. You are a big help, Tamara. Thanks!
Thanks, Allen, for checking in here! It helps us “know” each other a little better when folks drop in here for Roll Call and I’m glad to have you on board with us! You already know how I feel about working with managed care but I want to stress that it doesn’t have to be an all-or-nothing proposition for you. You may want to apply to be on one panel or two – possibly those that pay the highest rate for reimbursement or those that have the lowest “hassle-rate.” And, a different option might be that you apply to get on the panels of those that allow you to accept full payment from your clients and then have your clients seek reimbursement rather than you. It’s a good way to test the water, so to speak . . . working with a few insurance companies until you determine if it’s what you really want to do. Don’t take my word for it – check it out for yourself, if you like. I’m happy to be proved wrong (once in a while)!
Thanks, Tamara, for reminding me of all the other hassles. Like any situation, there will be people who have different responses. My colleague doesn’t seem to mind the paperwork and the billing person just gives her what needs to be corrected and she does it. I also get the impression that she is not the “bread winner” and doesn’t have kids so is not as concerned about the money as people may be if their practice is the primary source of income.
One of the things I dislike about working for a public agency is the amount of paperwork and the reality that the more useless paperwork you have to do, the less energy and enthusiasm and desire you have to do therapy. I have listened to people pour out their hearts while hearing the voice in my head saying: “You have to do the treatment plan today! You have to do the treatement plan today!” This is very unpleasant. You wind up doing so much documentation to show that you’re doing your job that the only job you really do is paperwork. I want to avoid that.
I had thought about applying for a couple of panels, more or less as advertising and possibly for a few referrals. Maybe being on a couple or three panels may make me appear more “mainstream” when folks look at my website or my psychologytoday profile.
P.S. Everyone should pay the $30 a month to be listed on the Psychology Today.com therapy registry. I have gotten multiple referrals from them. Very well worth the money.
Allen
Allen, I’ve had that same voice saying “You have to get the treatment plan done today” in my agency work. And, still I believe that my stints in agencies and psych hospitals (and, for that matter, probation) were the best training grounds in the world. The supervision and clinical experiences were priceless. But so were the things I learned about the administrative and business sides of mental health. I didn’t welcome all those opportunities for learning at the time but 20 years later . . . PRICELESS!
I, too, have had good success for Psychology Today’s website. It’s a hefty fee but one client / year pays for itself. Thanks for speaking up about this online directory.
I moved into full private practice several years ago.I believed that the way to do it was to get on panels, and I am happy to serve low-income clients. More and more, colleagues have removed themselves from panels, and report a great sense of freedom. The billing, hassles and so forth are difficult, but I believed I could not build a practice without the companies. What a bind. I am an experienced clinician with several niche areas that come from decades of work, and I can
t tell if clients are calling me because of my quality of work or reputation, or because I am listed with their insurance company. I am torn because I have to work more clinical hours for less money, leaving no time to explore teaching and writing.
I do have a billing person who does most of that work, but all the hassles of payspan just serve to confuse me.
I would love to loosen the dependence onthe big companies. I have thought of announcing to all my current clients what my rate is, and how to apply for a decreased fee. I may lose some, but would it be better for me, and actualy improve the quality of care that I give? Thoughts?
Hi, Rivkah! I’m so glad you dropped in to chat today.
I absolutely have thoughts about how to wean yourself off of managed care and transition to a cash-only practice. When I did it, I was terrified that I would starve to death. Note that I didn’t starve to death. I didn’t even have to cut back on groceries.
Now I talk with therapists every day who successfully make this transition and still choose to serve low-income clients. The difference between you and them is that they are you are likely half the money that they are for doing the same type of work.
The short answer for this situation is to remember that it’s not all-or-nothing! You can let go of provider lists once at a time (rather than all at once); and, you can open up space on your schedule for cash-paying clients only. If you want to talk about this in more detail, Rivkah, you are welcome to hire me to walk you through this process 1:1. I’ve done it with others and I’m happy to do it with you, too!
Either way, best wishes on your journey!
Oh, I just noticed that you don’t have a little photo of you that shows up with your comments here (and on other blogs, too). They are called “gravatars.” Using a gravatar helps others get to know and trust you quicker.
Here’s a link to a quick tutorial that shows you how to set up your own gravatar http://www.allthingsprivatepractice.com/how-a-tiny-picture-of-you-can-help-drive-traffic-to-your-website-or-blog/ . (Don’t worry! It’s so easy that even I could do it and it’s absolutely FREE!)
Good afternoon Tamara,
I am a newly licensed PC working in a mental health clinical setting. It’s great for the time being so I can gain experience and obtain my LPCC. My goal however is to start a private practice within the next 5 years or so. The thought had crossed my mind to use a sliding scale instead of billing insurance. Is that something you would advise?
Thanks!
Wes
Hi, Wes! It’s so nice to meet you! Welcome to Private Practice from the Inside Out!
How smart of you to be planning ahead instead of just jumping off a cliff into private practice without a plan!
I don’t advise using a sliding scale and I’ve written a lot about that.
Here’s some links to some blog posts to give you even more to think about:
Before You Reduce Those Fees . . . .
Different Fees for Different Clients
How I’ve Dealt with Clients’ Financial Needs
How to Create & Use a Sliding Scale Fee
Reduced Fees, Sliding Scales, and Lessons Learned ( 4-part series)
Open Path Psychotherapy Collective – Changing the Face of Affordable Mental Health Care in America
I hope you’ll drop back in here to let me know if these help and if you need anything else, Wes!
I look forward to networking with you, learning from you, and sharing what I know, too!
Hi Tamara!
Do you offer a letter template that I could tweak for the insurance panels I need to notify that I want to terminate my contract? Do you have a procedure or email that you use to notify clients of the change?
Thank you,
Latisha
Latisha! What a great idea – but no I do not.
That’s because each insurance contract specifies how and when to terminate their contract.
They all vary in specifics.
Likewise, most dictate who, how and when clients should be notified and what you need to tell them.
Should you wish to share examples of the letters you use, I would be happy to have them shared here so that others can learn from you!
Thanks mid
Like to switch to self
Pay but would not
Mind holding onto medicare or 90’dollar commercial
Plans through simple practice
Hi, Suzanne! I’m sorry but I’m not understanding what you are trying to say or ask. Would you like to say more?
I am interested in this topic. thanks!
How long does it take to get off of insurance panels? I currently take 3 insurances but I am planning to go in my own in about a month and want to get off of them.
Oh, Miriam! Thank you so much for dropping in here and asking this question!
It’s a good one because it depends.
It’s directly contingent upon the individual contracts that you have entered into with each of those companies.
That’s why I tell clinicians that they should read those contracts with a magnifying glass.
Your contracts with managed care can and do stipulate anything from one month to one year or more!
Have I ever seen a one year stipulation for terminating those relationships?
No, not really – but it’s entirely possible that they could exist.
The best thing you can do is read each of your contracts in its entirety and don’t forget to give your notices exactly as they tell you to whether by registered mail, regular mail, through a provider portal, and / or in email.
Otherwise, they may mean nothing.
Good luck to you – and congrats for being at this stage in your practice!
Yes, I too got paneled with a lot of insurance companies and was unable to find out what their reimbursement rate was. I find that I am working for half pay and feel that it is unsustainable for me. I have heard that some companies may be willing to renegotiate their rates but it would need to be substantial to remain. Any help in this area would be greatly appreciated.
Thank you.
Oh, Dr. Ruiz! So sorry for the lengthy delay in responding!
I have spent the last few months attending to an ill family member and have not attended to my blog as I would have preferred.
I do have several thoughts related to this and the first one is “Therapist BEWARE!”
If you have unanswered questions about rates of reimbursement or anything else, for that matter, my advice is to slow down (or better yet HALT) before signing a contract with anyone – especially insurance companies.
Yes, insurance companies can (and should) be approached for renegotiated rates as needed or desired.
In my experience, they may increase your rates by as much as 10% at a time.
My suggestion is to be prepared to justify any requested increase that you initiate.
For example, what is the insurance company getting from you now that they weren’t getting when you originally signed on with them?
I hope that helps!
Best wishes on your journey!
Dear Tamara
I no longer have the Beacon Health Options contract.
You recommend that I read it. Their Provider Relations told me to send a letter, etc. but nothing about requiring me to continue seeing any clients after the termination date ONLY at the previously contracted rate. Is that legal, really? People can come back after a hiatus if I have moved to a fee-for-service practice. I am semi-retiring and do not want to deal with insurance companies any more. Help?
Hi, Margaret!
I didn’t find your question until just now.
I apologize for the delay.
You can request a copy of the contract you signed from BHO.
They will have a copy in their records.
I have no idea what is legal and what is not.
I suppose it is possible that you agreed to continue see clients but would find that unusual.
I’m sorry I don’t have better answers for you other than to obtain a copy of the contract and to contact an attorney for assistance at this point.
I hope you’ll be back though to let us know what you learn.
Best wishes on your journey!