• Asha Creary

The Denouncement of Insurance Contracts

Updated: Jul 16

If you are like most people, when you begin your search on finding a mental health provider, you start with your insurance company. You may soon find it hard to find clinicians that look like you. Many providers are denouncing their contracts with insurance companies for a number of reasons. These would include underpaid, stigma and potential harm to clients that they may not be aware of.

Let’s talk numbers! In researching the average cash rate cost for therapy is $135 for individual and $180 for couples. When billing insurance most plans pay an average of $92.66 for individual sessions. So what this means is that even though I bill an insurance company they may only pay me the $92.66. The difference is $57.34. What insurance plans don’t account for are company costs like rent, utilities, licensing updates, trainings etc. They also don’t account for payroll costs for an employer who may have a team of employees, which would include benefits businesses are required to offer to employees, taxes, unemployment insurance, unpaid late cancellations, health insurance that employers are required to pay at least 50% for when an employee opts in to health insurance and this list is endless. Lastly, what they don’t consider is the amount of time it takes a clinician to become fully licensed. Health insurance companies are known for penny pinching providers and facilities.

The average master level licensed mental health professional spends an average of 10-12 years working towards their full licensure status similarly to a physician. Most people are unaware of the process. Clinicians are required to obtain a bachelor level degree, which takes on average 4-5 years. They are then required to take the GRE and get into a master’s level program, which the average rate of completion is 4 years. We are then required to undergo supervision and the best way to explain it is similar to MD’s completing residency post medical school. Our supervision requires an additional 3,000 hours of training which takes the average person 3 years to complete. Need I mention, the costly bag that comes with it. Unlike physicians, we pay for supervision. The average cost for supervision in central Texas is $350 per month. If we take that number and multiply it by 36 months, we spend an average of $12,600 post graduation. So if we do the math, the amount insurance pays the average provider is not adding up. The Math Ain't Mathing!

In the past year alone, Memorial Hermann of Houston threatened to sever their contracts with BCBS-TX over their unwillingness to increase contract rates for the providers and facilities rendering services to patients with BCBS-TX insurance. They have since then reached an agreement but I am sure that agreement is still not paying the full rate of the provider’s billed amount. Without that agreement so many patients were at risk for not receiving care due to financial disagreements between the hospital and the insurance payer.

Need I mention clawbacks. Clawbacks is where insurance companies audit claims and request money back from previous sessions. Insurance companies can go back as far as five years and request money back from sessions they don't deem medically necessary. As mentioned in another article I read, you wouldn't go back to your barber or beautician from 5 years ago and request money back for services they provided. You would do it in that moment. Just this year a provider in Massachusetts had to pay back $28,000 from a client they saw over a span of 6 years.