Early in my career,I naively believed that the way to build a strong and independent practice was to contract with both insurance and managed care companies. I spent hours filling out the lengthy applications for each company. I followed up with phone calls and sent in supportive documentation just trying to get on the companies’ panels as a provider.
"Paperwork" by Luxomedia
Once I was approved to get referrals from the managed care companies, I had more paperwork to do and more phone calls to make. And, did I mention that the fee that I contracted for was significantly reduced from my usual and customary fee?
When counseling was not deemed medically necessary by the Utilization Review professionals, my reimbursement was abruptly cut off. My clients were unprepared to suddenly be financially responsible for my full fee. And, neither were they prepared to discontinue treatment with me.
As a therapist in private practice, you have many potentially practice-altering choices to make. Deciding whether or not to contract with managed care companies is one of them.
Make sure you take the time to consider the implications of working with managed care before you ever contract to do so.
Hi Tamara!
First I want to say thanks for the advice on the website- it is finally LIVE- http://www.clsservices.org (Let me know what you think)
Second, I appreciate this post. Ever since I went in to practice in September, all of my colleagues have been PUSHING me to hurry up and get my LCPC so I can accept insurance. A lot of clients have been lost because they call and find out I am not on any panels yet. I am scheduled to take my LCPC in a few weeks, but am not all that anxious about getting on panels for the same reason that you mention in your post.
How do I explain to my clients (and potentials) why getting on these panels is not always the best thing?
Hi, Carla! Congrats on the new website. It’s lovely! I particularly like your tagline and the language that you use to describe your service delivery model – culturally sensitive, collaborative, practical application. All things that I would be looking for in a therapist.
Although I don’t believe that I can “lose” a client that I never had, I do understand what you are saying. However, I run a 100% cash up front practice and average failing to book only 2 clients / year due to my no-managed-care-no-insurance-fee-for-service practice.
This Thursday, I am posting exactly what I tell my clients AND I include it in my disclosure statement as well. Once I fully understood the implications of working with managed care and that it is often NOT in my clients’ best interests, I found that my clients were usually grateful for the information and the ability to make a fully informed choice.
My suggestion is to first get really clear with your own thoughts about how you feel about the truth about working with insurance / managed care. And, then see if how you present the information to your clients changes. When it’s presented as not just being about your bottom dollar but is equally about your concern for your client’s best interest, I believe your clients will hear you loud and clear . . . and choose you because you are looking out for them.
I have only recent begun my private practice and this rings so true! I originally didn’t plan to be on any panels- then I succumbed to some pressure of believing I NEEDED to if I was ever going to have a client. Now, I’m regretting that decision. But- my understanding is that since I’m under contract with the insurance companies that I’m obligated to accept those plans now, right? I can’t suddenly make my practice cash only, which is frustrating.
Additionally, I work with children and I have found that parents seem more reluctant to pay out of pocket for their kid’s treatment, as opposed to their own.
Robyn, I can so relate! I’m doing great without any filing on any insurance and I’m betting you can, too. Every contract that I’ve seen for providers on insurance panels and managed care companies provides a clause for termination. Usually, I think, you need to give 30 days written notice and then you can get out. Make sure that you read your own contracts for the details of termination but I’m sure there is a way to leave them behind.
Ah, yes – your last comment, I suspect, is about the “F-word” i.e. Fear. I’ve got to sit down and write a post about this one. It kept me stuck for a really long time, too. It’s funny . . . . I’ve got another colleague who says just the opposite. She says that the parents are more than willing to get help for their children “at any cost” but are reluctant to spend money on themselves. Either way . . . making decisions about your practice (or your life, for that matter) shouldn’t be made based on fear.
Thanks for dropping in! Hope you’ll be back to continue the conversation soon!
Thank you Tamara!
How to communicate the reason I am not on any panels is exactly the help I need. I will be looking for your next blog on this subject!
And you are so right… I can not “lose” someone that I never had! Thanks for helping me change perspectives!
🙂 Carla, I only know that because I’ve been there before . . . and it feels REALLY GOOD to have made a different choice! Have a good day!
Well, that’s really interesting to hear! You are right- it probably is mostly fear based!!
Hey, Robyn, you don’t have the market on fear so when you decide what you are going to do with it, I hope you’ll drop back in and let us know. Hopefully, you can help someone else from stepping in that same hole!
Tamara,
I do understand the rationale for going “cash only” in private practice but what about overall marketability? I would like to work part time (my wife wants to go full time with her university)and it has occured to me that paying for office space as a part-timer may be very difficult. The option is to work in a group practice, where the overhead is covered. Problem is, most that I have seen here in Georgia are very adamant about being on managed care companies. It seems like being on the panels could make one more marketable in terms of practice groups. What do you think?
Hi, Allen! Thanks for dropping in here to ask the question! Many clinicians believe that working with managed care equals a full and vibrant practice. And, that’s just not necessarily the case. The truth is that when you work with managed care, it’s possible that you may get regular referrals from them (or not). But, what you can definitely count on is that you will receive a fee that is often 50% less than the Usual and Customary Rate for your geographic area and will likely put in twice the time on jumping through their hoops with paperwork, billing, and telephone authorizations.
What makes you marketable has to do with what you bring to your practice. It’s about who you are . . . what makes you memorable . . . and what makes you the best choice to work in a particular setting with a particular client – and not how you choose to obtain your fee. I wonder if your colleagues in group practices are a bit intimidated by the thought of you actually collecting your full fee . . . .
It is true that if you are interested in working with managed care, they do tend to prefer to work with group practices. It allows the managed care company to do less work. A group practice allows them to “learn” about multiple resources for their clients in one location and it also results in increased standardization of billing practices. So, certainly, it is in managed care’s best interests to work with group practices.
Allen, there are other options out there for individual practitioners who are interested in private practice and need to secure office space. You might want to consider subleasing by the hour or the day from another professional. I have subleased an office for as little as !0% of what I take in during any given hour. I have also paid a flat $10-15 / hour. You might also consider bartering a service (non-clinical) with another professional to offset your expense. There are also businesses like Office Evolution that actually lease space by the hour or by the day to professionals. And, with the recent downsizing of the last few years, you may be able to find space elsewhere at reasonable rates.
What I can tell you is that I stay as busy as I want to stay and am 100% cash-only. I have not filed on insurance or joined a managed care panel in at least 15 years. And, I believe you can do it, too! If you aren’t sure just how to do that, keep checking in back here at Private Practice from the Inside Out. Or, better yet, sign up for my Annual Series and we’ll take additional time to personalize a plan just for you!
Allen, I hope you’ll take a moment to add your name to our first annual roll call and drop in often to chat!
I came across your website via Google and I spent a long time reading old and new threads. I’m a LCSW in the process of starting my practice and your info along with other clinicians were very helpful! My biggest concern about starting a private practice is setting up fees and deciding whatever or not to deal with insurance companies. Thanks for your helpful feedback.
Hi, Wendy! And, welcome to Private Practice from the Inside Out! I’m so happy to hear that you are finding lots of useful information here and even happier to find that you are joining the conversatons. The very best parts of being here are the conversations that take place with the therapists in this community! I look forward to networking with you, sharing what I know, and learning from you, too!
As usual, your response is clear, thorough, and very helpful. I intend to go the “no insurance” route because so many professionals like yourself have been successful with it. I was talking to a buddy of mine today who was telling me about getting $55/hour to take down someone’s mantle piece. That reminded me that we have this notion that all “medical” treatment must be paid for by insurance but we willingly pay more than $50 at a pop for movie night with the family or to have non-emergency work done on the house or car and we do not expect to have insurance pay for it. As you have said before, people pay for what they value and I guess it is up to me to explain why my services are worth the money. Thanks, again.
Welcome to my world, Allen, and enjoy the ride! Hey, I noticed that you didn’t sign in for roll call so . . . where are you and what are you going to be doing in private practice?
And, finally, let me know if you get “stuck” along the way! There’s plenty of clients out there for ALL of us!
At the risk of appearing stupid: How do I sign up for roll call?
Hi, Allen! I’m so glad you asked! Not stupid at all! I just wasn’t very clear! Click on this link. It will take you to a post in which I talk about celebrating our one year on line and ask all readers to sign up for our First Annual Roll Call!
At the bottom of the post, you will see the little “Comment” button. Click on it and introduce yourself! Tell us who you are, where you are, what you do and how to find you! It’s a really good way to meet each other and get the word out about who is here at Private Practice from the Inside Out.
I recently renewed my Aetna contract for in net work, out patient mental health. I thought this would be the only way to be reimbursed for all Aetna patients that are out of net work. I discovered that’s not the case. Question: can I opt out of in net work contracts but still received payments as an out of net work provider.
Hi, Ann! Thanks for dropping in to chat today!
It is common for clients to receive reimbursement for the services of therapists who are out of network providers – but it’s not a guarantee.
Every insurance policy is different – even within a single company like Aetna.
However, you do have the ability to terminate your contract with Aetna – read the contract you signed to know how they want you to do that.
Out of network providers typically (but not always) have their clients pay them for their services and then seek reimbursement on their own.
I hope this answers your question and that you’ll be back often to join the conversations here at Private Practice from the Inside Out!