What is self-pay and why would I self-pay?

One of the most popular forms of payment in mental health practices is self-pay. When an individual pays for therapy through self-pay as opposed to utilizing insurance both confidentiality and treatment remain between you and and your therapist. Treatment decisions, length of therapy sessions, confidentiality and many other important decisions are always kept between you and your therapist. However, when utilizing health insurance to pay for therapy you may be relinquishing confidentiality, treatment decisions, length of therapy and other pertinent decisions to your insurance company.

What are advantages of paying out-of-pocket?

  1. Choice: Clients who wish to stay in network may not always find a provider with whom they are comfortable, or who has experience dealing with the types of issues the client wishes to address in therapy. In some areas of the country, in-network access to therapy is extremely restricted, requiring clients to travel as much as two hours to see someone. When you self-pay, you get to choose!
  2. Focus on the client: Self-pay promotes a focus on your health and strengths rather than just on what’s wrong –insurance companies require that we give you a “mental illness diagnosis,” and this diagnosis is required to be disclosed on any subsequent insurance policies for which you may apply, including life insurance, and can prevent you from being able to obtain them. We want to help you avoid that.
  3. Flexibility: Just as insurance puts restrictions on therapists, it has, up to now, set restrictions for clients as well. When you pay for your own therapy, you decide how often and how long you need to go and when you’re finished. When you use your insurance, an administrator may read your progress notes and decide when you stop. If you decide you want to continue and pay for it yourself, your therapist may not be able to legally continue, having signed a contract with the insurance company to see you only through the policy. Some therapists report that this has not been a problem in actual practice, while others report cases where it ended therapy prematurely. While many of these restrictions – limits on number of sessions, for example – are impacted by the November 2013 final rule on mental health parity, insurance companies can still restrict reimbursements on certain kinds of treatment, such as online therapy, group therapy or couples counseling. Self-pay clients may also opt for a longer sessions, if the need arises, whereas clients covered by insurance must stay within the negotiated time slots.
  4. Privacy: When clients use insurance, therapists must attach a diagnosis to release insurance benefits. This diagnosis then becomes part of the client’s permanent medical record. For clients who wish to maintain their privacy, and are uncomfortable with the number of people who have access to their medical record, they may opt to pay. Paying out of pocket means that therapists are not required to assign a mental health diagnosis or share medical information with anyone.
  5. Timeliness: Particularly in overstretched networks, clients may have to wait long periods of time to schedule therapy with a provider who accepts their insurance. In addition, some insurance companies require pre-authorizations which can further delay the scheduling of your appointment.
  6. Convenience: Paying out of pocket not only allows the client to see someone more quickly, but self-pay clients are often given the option of arranging more flexible session times, such as weekends or evenings.
  7. Eliminates surprises from billing – you’ll know up front what you’re responsible for, and there are no guessing games regarding coverage, co-pays, deductibles.  You’ll know from the beginning what to expect.
  8. Cost savings: Once you tell a therapist’s office you are insured, they are contractually obligated to charge you the rate they agreed to with the insurer.
  9. Reduces the potential for insurance premium increases – insurance companies are known to raise rates simply because you received a diagnosis! For future problems of increased cost of monthly insurance premiums (e.g., once a mental illness diagnosis is given for counseling, the insurance company may rate the client on a different “tier.”

Some types of therapy aren’t always covered by insurance.

Many of the restrictions – limits on number of sessions, for example – have been impacted by the November 2013 final rule on mental health parity, insurance companies can still restrict reimbursements on certain kinds of treatment, such as online therapy, group therapy or couples counseling. Family therapy is also a frequent component of private pay facilities that is not covered by insurance. Family therapy is an important component of getting better for most mental health clients, since their families either play a role in their mental issues due to dysfunctional family dynamics, or are crucial in a person’s recovery, since family support (emotionally, financially, and otherwise) can be helpful in giving the client a stable place to stand when they leave the facility and go out into the world again. Family therapy creates a healing team between family, therapists, and the client that is very powerful in bringing true healing and recovery for the client.

The pay-off.

In an era of higher health insurance deductibles, rising out-of-pocket costs, shrinking provider networks and fewer choices in health care, more people are taking matters into their own hands. Instead of using their health insurance for all of their care, they’re paying cash so that they can see the therapists they choose. Some are paying a fee to their therapist in exchange for longer office visits and 24/7 access.
Paying cash doesn’t mean ditching your health insurance altogether. You’ll still need insurance for big-ticket medical care. But it usually makes sense to get a high-deductible policy to save on premiums. Payments you make in cash may count toward your deductible, and if you contribute to a health savings account or a flexible spending account, you can usually use that money tax-free to cover your out-of-pocket costs for medical expenses, even if your insurer doesn’t count them toward the deductible. The payoff: more control over your care, which may cost less than you’d pay with your health insurance policy…

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