Anxiety & Depression Therapy - Orange County CA - Liz Birch, LMFT
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Insurance Panels, Therapy & Making a Profit!

3/16/2015

19 Comments

 
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When I first began my work as a therapist I was very excited and wanted to get on as many insurance panels as I could. My reason was so that people who needed the services of a therapist would be able to find me. My number of clients would increase and I would make a nice profit.  So I began getting recommendations from my colleagues, as to who they used, what paperwork was required, how many sessions are allowed, how much they were reimbursed for each session and how long did it take to get paid for the therapy appointment.   Oh wow! My “new therapist, wanting to help all that I could” bubble burst. I kept asking my colleagues questions such as, “You mean I have to accept ⅓ - ¾ of my regular rate for most insurance panels?”  .. and ... “What? We don’t always get reimbursed for services we’ve provided, even though we thought we did all the paperwork correctly?”

Now let me add there were some good insurance panels, so all aren’t bad.  But those few that are easier to work with are far and few.  And to get on those panels can be very difficult. At least it was for me.

I began weighing my options - calculating rent, office expenses, malpractice insurance, and on and on adding up the expenses of running a private practice. I then tried to figure out how many insurance clients I would need to pay my expenses. I had to realize that even though my fee is, for example, $120/clinical hour I might only be getting paid $60/clinical hour.  I realized I would have to take on “more than a healthy number” of clients just to make ends meet.  I say more than a healthy number because as a therapist I have my own mental health limits on the number of clients I choose to see.   I strive at providing the best quality of care possible for each of my clients.  I can’t work like a machine seeing one client after another, with no breaks in between, and be sharp for each of them. Maybe some therapists can do that. But I know my limitations.  I need time to gather my thoughts, do some research, confer with colleagues, make calls to physicians/psychiatrists, write appropriate clinical notes, etc.  I need to focus on client care and to be sure I’m offering my clients the best support, education, and guidance that I can.

Therefore, I chose to make my practice more client driven.  I chose to provide the best care I can for my clients and not have an outside panel tell me what’s in the best interest of the client who they have never met.  I chose not to work with any insurance panel.  It may not be for every therapist out there but I chose to be an “out of network” therapist. Wow! Scarey!   

At first business was slow. My colleagues were getting twice as many clients as I was. My colleagues were also sharing with me their frustrations on all the billing paperwork, re-submissions and phone calls back and forth with insurance panels.  I was okay with them having more clients than me.  But the tides shifted and in a surprisingly short amount of time my practice was filling up. My practice had, and has, out of network  clients.

Marketing, Marketing, Marketing!  I didn’t sit back and just wait for clients to come to me.  I pushed marketing.  I used experiences from past companies where I worked that weren’t even in the mental health industry.  Marketing is marketing.  I keep my name out there, I’m in the community, I’m on social media, I meet with physicians and nurses and so on. (Let’s see.. last week I met with a psychiatric nurse practitioner and tomorrow I’m meeting with a psychiatrist.) I’ve attended “Coffee With A Cop” meetings where I get to sit with local police over coffee and share what I do.  Then everyone I meet with I send a postcard thanking them for the meeting. It’s a high quality postcard with my photo and practice information. My marketing pays off!

When I do have my first meeting with a client I encourage him/her to contact their insurance company and find out what the reimbursement rate is for “out of network” therapy services.  Many clients told me their insurance company would reimburse them for part of my fee.  Yes, my services would have a higher reimbursement rate, for the client, if I were on the panel but my client would also have restrictions.  Many clients found they preferred the openness of my care and getting some or even no reimbursement.

I’ve been providing therapy services for nearly two decades. I have an appropriate amount of clients, I don’t feel like I’m working an assembly line, and I have a comfortable income.

I feel my way of working with clients benefits them for a number of reasons:


  • I can afford to have less clients than I would in an insurance driven practice, thus able to provide more extended care to each client.

  • My current clients know that I am more available for phone calls and extra sessions if needed.

  • I work for my client.  My client and I choose the treatment approach that “we” feel is best.

  • Sometimes there’s a need to just work on supportive issues which will only take a few sessions. In those cases, I don’t feel I should be diagnosing my client with anything. Maybe someone is  just coming in for minor care. However, if I was seeing this client via an insurance panel I would need to provide a diagnosis for my client that would remain part of their insurance record.

  • My client records don’t have to be shared with anyone. They remain between my client and myself.

Not all my clients are fee based.  I do  a certain number of sessions through Give An Hour.  Anyone in the military can contact me and request donated sessions through Give An Hour.  If I have slots open then that person gets my full attention. I don’t offer less time per session and I don’t limit the number of sessions.  When I work with the military through Give An Hour they get exactly the same care, support and guidance as any client in my practice.  It doesn’t cost them a dime and I inform my CPA the number of sessions I’ve donated.

I understand working with insurance panels is a personal choice.  This was about my own personal experience and how letting my client and I choose their care  works.






19 Comments
Jill Frandsen link
3/7/2016 07:59:02 pm

Good insight

Reply
Liz Birch link
3/2/2017 09:11:06 am

Thanks Jill I'm glad you enjoyed it. (sorry I missed replying to you many moons ago) :D

Reply
Terri Compton link
3/2/2017 07:54:04 am

Thank you so much for sharing this. I've just started my private practice and within only one month I'm feeling the pressure to get on panels. I feel exactly the way you do. I want my business to thrive but I do not want to become a robot.

Reply
Liz Birch link
3/2/2017 09:16:12 am

Hi Terri, I'm glad you found this article helpful. I have made a few changes since I wrote that, which was about a year ago. I have added just a couple insurance companies. I am mainly cash based but I use insurance to fill in my gaps. I'm at about 75% cash, 25% insurance. I find it a very nice blend. ~ Liz

Reply
Terri Compton
3/2/2017 09:35:39 am

Interesting! may I ask how that experience has been for you? Which companies did you contract with?

Liz Birch link
5/5/2017 10:29:09 am

Hi Terri, I currently work with Cigna, Tricare and CalOptima/Medical. I can't imagine working with any more and I don't understand how other therapists work with a long list of insurance companies. There's a lot of added work with insurance companies, i.e. treatment plans, discharge summaries, must diagnose, then to bill them is added time and you only get about 60 - 65% of your regular fee. BUT, as I said earlier, it's nice to fill in the gaps with insurance clients. The insurance companies I work with continually send clients to me which is nice. If I were to rank my 3, Cigna sends me the most, then CalOptima/MediCal and TriCare has really slowed down. I wish you much success and feel free to reach out to me with any questions. ~ Liz

Sarah B
3/10/2018 08:38:51 am

I didn’t realize you could do both! That’s a good idea. :P

Cathy Gruman
5/4/2017 11:35:47 pm

Thank you so much for this gift of wisdom. As a recently licensed LMFT in Calif, I feel the pressure of getting on panels. Your article has relieved the pressure and reminded me that it's not a requirement, but an option and that I need to focus on my own goals in my practice, not what everyone else is telling me to do, like, "get on insurance panels!" I also sent you an email. :) thanks again.

Reply
Liz Birch link
5/5/2017 10:20:55 am

I'm glad you found this article helpful. Being a new therapist can be daunting. Don't feel pressured to get on insurance panels. You have to wait at least 2 years anyway before any insurance company will consider you. Focus now on marketing. Search other therapists in your area and invite them to lunch. Share your experience and you can learn about their practice. I do that when ever I can and I've referred out to others (who are a better fit for my client) and they refer to me. I've also sent postcards to local Drs offices and I've personally met psychiatrists. Especially psychiatrists who don't take insurance. Create a web page! I have a great marketing guy who created my logo, designed my business card and can even sent out tweets for me if I need him to. (Let me know if you need his info.. he's very reasonable). Get your name out there. Best of luck to you and feel free to reach out to me with any questions! ~ Liz

Reply
Jacqueline Gomez
2/16/2021 10:47:23 am

Hello can you please provide the information for the person who created your logo. Thank you for all of the wonderful formation.

Liz Birch
2/16/2021 12:26:06 pm

Hi Jacqueline,
I used Keith Poletiek who is fun to work with. Here's his information.

https://keithpoletiek.com/design/

Yana
2/26/2018 09:37:13 am

Hi Liz,

Thank you for sharing your experience! It's nice to hear your success story. I am a newly licensed MFT in CA and I also want to stay primarily out of network. Can you recommend any insurance companies that I can join as a newly licensed therapist?

Reply
Liz Birch link
2/26/2018 11:36:15 am

Hi Yana,
After I became licensed I discovered that insurance companies won't accept you until you've been working "licensed" for two years. I have heard that has changed and some are opening up. I am not aware of any insurance companies specifically that take therapists with under two years experience. If you have a unique specialty, or speak a second a language, I think that is more of an advantage to you. I would call a few insurance companies and ask. Be sure to push your speciality (if you have one) as a way to stand out from other therapists. I wish you the best future as a therapist. It's an amazing career! ~ Liz

Reply
Sarah Beaulieu
3/10/2018 08:37:59 am

Hey! Thank you for this post, I am about to enter into the realm as a psychotherapist and huge concern of mine is making $60/hour doing the work we are doing. It’s grueling. I’m curious in your current line of practice, how much income to expect with your aptitude, drive, and understanding of marketing. I believe I will be an out of network provider and liked hearing that some insurance will do partial coverage. But like I said, I don’t want to do this line of work making what the average salary of an MFT, or school counselor makes. I’m willing to work hard, but I’m also not willing to work for free. Curious the salary of someone with a built clientele that you have, owning your own business and how many years that took. Also I’m curious how many clients you see a week this way. Are you working 40 hours?

And how often do people come in and pay the fee, and then are responsible for sending it to their insurance for partial coverage? That’s a cool idea too. I just don’t want to be stuck with the “in network” price. Such a scam. Insurance companies need to raise their rates.

Reply
Liz Birch link
3/10/2018 12:23:01 pm

Hi Sarah,

Welcome to the field of psychotherapy!

Let's first figure out your annual salary. You can make whatever you choose to take in. Example: Let's say you see 20 clients a week and average $75.00 per client. That will get you $78k annually. The average of $75 per client is a mix of full fee ($125.00 for me) and insurance pay (avg.$65.00) and the number of clients in each pay group. I'm calculating low at $75.00/session. That can look like 5 clients a day for 4 days. When you up that number you make more money. But don't forget your expenses: rent, phone, website, marketing, office supplies, CPA, business and all licensing fees, CEUs, etc. All of that you need to deduct from that base of $78K, in the example above. Of course you add more clients you raise your income. For me it seems my expenses are pretty fixed (the same each month) so when I add more clients I make more money in the end.

For me, personally, I've been in this industry for over 20 years so I have a very good base # of clients. I "choose" to not keep an extremely full "client" load as I need to keep room for other endeavors. Plus as you get older, by the end of the day, your brain is really exhausted. So I know my limit. I need to be sure I'm still giving the best care for my clients and taking care of myself as well. When I first started out it seems I could see lots of clients and did very well. So being that you are in the beginning stages you can go for much more than I do now. I'm currently at about 20 clients per week. Many therapist do more than that and some limit themselves to much smaller numbers. That's what's ideal about working for yourself. You take on what you can handle.

I have a good mix of clients who pay without using insurance at all, to some where I provide them a superbill and they work with their insurance, to others who I do all the insurance. I keep the mix at a level where I don't feel overwhelmed by working as an insurance biller all day. I do everything myself. I have no hired outside help and it works for me. But I think that's because I know my limits. I only work with a few insurance companies. I know therapists that are on every insurance company's panel, which could be over 10 companies. I have no clue how they do it. I have three I work with and I don't want any more. Insurance billing is not hard, it just takes extra time. When you take a few hours each week to bill insurance it's unpaid time. If I saw client's those two hours I could be making over $200.00. But that's what I calculate and determine what I'm willing to do. It goes back to knowing your limits.

I opened my private practice as soon as I became licensed - many years ago. But I couldn't make it in the beginning with just my private practice so I also worked for a large mental health agency. I worked in my private practice three evenings a week. In the beginning you need to build your client base - as in with any job. Once I felt I had enough clients I left the mental health agency and just worked for myself. I love it! That's been several years now.

An important part you must not forget is marketing! People have to be able to find you. You have to get your name out there. Attend community events! Always have your business cards with you! Be sure you have a website. Be proud of what you do and talk about it to others.

Also, be proud of the rate you charge! What people pay for my $125.00 is less then if the couple went out to dinner and a movie. It's less than a women getting her hair cut and colored. It's less than a new outfit. And with that $125.00 the person is working on their mental health!! I don't bargain with my rate. I have never asked a waiter to bargain on the price of a meal listed in a menu. I've never asked the grocery store to cut their prices for me because I'm having a bad money week. I've never bargained with the dry cleaning person. I feel when therapists start bargaining with their rate it devalues our service. So I don't do it.

I hope I've addressed all your questions. Thank you for your comments! I wish you much success :D

Liz

Reply
Colette Craig
10/17/2019 03:14:45 pm

Can you please tell me if Associates are allowed to accept insurance and, if so, which insurance plans allow for Associate MFTs? Thank you! Colette Craig

Reply
Liz Birch link
10/18/2019 10:03:07 am

Hi Collette,
As far as I'm aware one needs to be licensed for a minimum of two years before being accepted on any insurance panel. If there's an insurance company you are interested in you may want to phone/email them directly to see if that's still accurate.

Congrats on your chosen career as a therapist! I wish you the best!

Liz

Reply
Leena
3/25/2021 11:47:38 pm

Hi Liz, Thank you for sharing your journey. I've been searching for some time on this particular topic: private practice providers and insurance woes. Ironically, I'm in the complete opposite situation as I'm a seasoned biller/coder but will be sitting for my LMHC exam soon, pending covid19. I've since been reaching out to PPP, offering billing services but haven't had much luck. I currently have 2 therapists I bill for, and although word of mouth is helpful, the competition is fierce. Any suggestions on how to grow my network? Thank you graciously for your time and I look forward to hearing from you soon.
Be well and stay safe,
Leena

Reply
Liz Birch
3/27/2021 01:21:29 pm

Hi Leena,

Biller's are needed for therapists who take insurance. But insurance companies pay therapists a fraction of their fee and the therapist is bound by that low fee. That leaves the therapist with an income that won't support the cost of a biller. The therapist then needs to do his/her own billing because there isn't enough money coming in to afford a biller. It's a horrible cycle. I suggest you join one of the Facebook groups for billers so you can network You might also join one of the therapist's Facebook groups. In the therapist's group don't push your services but offer help or suggestions to therapists. Some therapists hire billers because they realize how helpful they are. :)

I hope this is helpful and I wish you the best in your journey.

Liz

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    Liz Birch, LMFT, 
    CHt

    I'm a licensed Psychotherapist and certified Master Hypnotist who works with adults looking to reduce anxiety, depression and stress as a result of every day life and traumas. Work can also be done on breaking specific habits.   

    I hope I inspire you to take risks and step out of your comfort zone. You might be surprised what you discover.

    If you reside in California feel free to reach out to me. We can talk on an initial phone call to see if you feel I'm the right therapist for you. 


           ​

    714-584-6047

    LizBirchMFT@gmail.com

    ​

    ​The information provided through this website is for informational purposes only.
    ​This information is not intended to and does not create a therapist-client relationship.

    @2022 Liz Birch, LMFT, CHt   Licensed Marriage & Family Therapist   CA Lic.#40999   
    ​Orange County, CA


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