How to choose insurance panels for your new mental health practice

Welcome to the "What to Know Before Opening a Mental Health Practice" series by Kristin Trick, MA, LPC-S, RPT. Drawing from a decade of diverse clinical experience spanning psychiatric hospitals, nonprofit agencies, and private practice, Trick shares the top 5 lessons she wishes she had known before becoming a solo practitioner. Packed with practical advice and insights from her journey, this series supports mental health professionals looking to establish a thriving and sustainable practice.

While debating whether or not to start a solo practice, I spent a lot of time considering which insurances I would accept. My experiences with group practice had offered me a front row seat to the multiple perks and debacles involving insurance companies; I did not want to begin a practice without a solid plan for collecting payments. Having been assigned to an array of panels over the years with varying experiences, I relished the chance to decide for myself which contracts to pursue. Ultimately, I chose to partner with only 2 companies because of their longstanding reliability and efficiency. This decision has resulted in enormous benefits for my company and given me much to share about the topic of insurance.

Besides being skilled counselors, private practitioners need acute shrewdness as business owners. This sharpness is an invaluable asset when it comes to choosing insurance panels because, in some cases, these companies will be your primary income source. They will pay for the majority of your sessions, whether in full or alongside a client’s copay or coinsurance. They may also request to review your medical records. Furthermore, insurance claims can add several tedious hours to your workweek, especially if you have to resubmit claims. Thus, a good starting point for determining which companies to work with involves your confirmation of their payment rates and anticipated payment timeframes.

Insurance companies pay different rates at various intervals for the same service, which significantly impacts your income. Rates vary across the nation, with counselors in different states, or in the same state but different regions, receiving dissimilar payments. In some cases, counselors who have worked with an insurance company for several years may advocate for increased pay and receive a new contracted rate. To avoid surprises, talk with counselors in your locale (prioritizing those with similar professional experience) to confirm what rates you can expect.

Insurance companies require mostly the same information on their applications, but differ in formatting. To streamline your applications, create a document which includes all the important details of your practice. Examples of information to keep handy are your company’s mailing address, employer identification number (EIN), and national provider identifier (NPI). Keep this document open while you complete online insurance applications, copying and pasting the information as needed.

Applications may have unique conditions which can delay or exclude counselors from becoming approved providers. For instance, I could not independently provide services for Tricare clients until I passed the National Clinical Mental Health Counseling Examination (NCMHCE). I had secured my counseling license in Texas by passing the state-required National Counselor Examination (NCE), however, this exam was insufficient for my Tricare credentialing.

Private practitioners must also apply for credentialing during the companies’ open enrollment periods. If you miss a deadline, you must wait for a new window to open, which may not occur until the next year. Once you submit an application, the time for approval can take months due to the multitude of applications. A standard wait time for insurance credentialing is at least 3 to 6 months. This means you should apply to panels several months before you plan to meet insurance clients at your new practice.

Call your insurance companies weekly to check in on your application while you wait for their approval. The company logs every call you make, which keeps you on their radar and aware of any problems with your submission.

When choosing insurance panels, evaluate the demographics of your area. For example, if you live near a military installation, Veterans Affairs (VA) or Tricare are excellent options because most of your potential clients will present with these insurances. Consider, too, whether the panels in which you are interested have strict requirements or restrictions. Medicaid, for instance, does not allow counselors to charge fees for no-shows or late cancellations. Similarly, an employee assistance program (EAP) requires counselors to complete additional paperwork to prove that an employee is receiving treatment and limits their number of covered sessions.

Once you receive a formal insurance contract, print or save a copy of the current service rates to keep handy. Knowing the expected total for each of your sessions will help you develop financial stability for your business. In particular, reference service rates while working with clients who have a copay (fixed amount) or coinsurance (percentage cost) due.

Envision a work day that includes your sessions with 3 clients who all have the same insurance but different sub-plans. For instance, if you know the total service rate is $100, you can confidently manage their payments. Insurance covers Client A’s services 100% so they pay nothing. Client B has a copay of $30, so you can expect the remaining $70 once their claim is successfully processed. Client C recently met their deductible so they now owe 20% coinsurance, so you will charge them $20 and wait for their insurance to pay the outstanding $80.

In addition to familiarizing yourself with different insurance rates, it is equally wise to learn the expected timeframes for payment. Compared to self-pay clients, whose fees you can swiftly deposit, insurance companies require more time to receive, process, and complete billing claims. The process varies across insurance plans. For instance, one panel I previously worked with informed me they had up to 365 days to pay their part. Thankfully, most claims are completed within 1 to 4 weeks after their submission date.

Many clients who present to counseling did not anticipate their need for mental health coverage when they initially applied for insurance. This can result in clients who desperately need weekly appointments, but have no affordable means to pay for them. Their insurance plans may have extremely high deductibles or exclude mental health coverage altogether. In such cases, provide multiple resources for clients to review between sessions, including worksheets, articles, and books, to maximize treatment. Alternatively, you may offer a self-pay rate, in which the client signs a contract agreeing that their services will be at a lower, out-of-pocket rate with no insurance claims submitted.

Manage insurance effectively with these tips.

Besides helping you secure prompt payments, this habit will also alert you if there are problems with a claim. I met a client weekly for 2 months before learning they had never renewed their insurance so none of their appointments were covered. Avoid similar experiences by submitting your claims at the end of each work week.

A benefit of using electronic health records (EHR) software is that you can see what claims have been submitted, received, and paid. Compare this to your bank account to track what payments have been deposited and which claims warrant a follow-up call to the insurance company.

Tebra's EHR+ is an ONC-certified all-in-one platform built for independent practices. Learn more.

Do not rely on new clients to relay their correct insurance rates, nor complete this task the day of an intake session. Call the insurance company at least 2 days prior to intake and verbally confirm the charges your client will owe. Then call your client to relay this information. For established clients, check their benefits online using the insurance company’s website or Availity; do this the day before or week of their appointment to verify rate updates.

Solo practitioners should limit their insurance panels to no more than 4. The time involved in verifying clients’ benefits, submitting claims, and addressing problems with insurance is wearisome. Working with multiple insurance plans heightens your likelihood for audits and complicates your finances, too. Cap your work with insurance companies to help yourself stay on top of claim submissions.

After 6 years of working in private practice, I have experienced multiple modifications to insurance payments and they have always been surprises. Sometimes the difference has been minor (several cents or dollars), but on other occasions it has been quite large. Accept that insurance companies can spontaneously alter their rates and notify your clients straightaway when this occurs.

Most counselors are uncomfortable initiating financial discussions with clients. However, private practitioners can find themselves in debt when clients have outstanding balances due. They then face an even more awkward situation when they attempt to collect payments: a client may be unresponsive, have switched providers, or even moved out of the state. Collect clients’ payments as soon as their session ends to guarantee that you are being paid.

For those opening a group practice, verify what qualifications your counselors need for each insurance plan to accept them. 

As previously mentioned, I could not provide services for Tricare clients until I passed the NCMHCE. Similarly, most insurance companies will not pay for services from counselors with an associate or temporary license. Ensure that your counseling team is equipped to provide services for the insurance panels under which you are credentialing them. 

There is a copious number of insurance panels available, which makes it tempting to apply to as many as possible when you begin a private practice. A nifty approach is to limit your initial applications to only 2 or 3 as you start out. Then, after you have familiarized yourself with the claims process and practice ownership, apply to 2 or 3 or more. This tactic prevents you from becoming overwhelmed with insurance as you build a solid base of clientele.