The Denouncement of Insurance Contracts
Updated: Jul 16, 2022
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.
I researched a few years ago the average amount of time a psychiatrist spends with a client per session after an initial session with a client is 17 minutes and many clients complain their physician doesn’t know them or understand their concerns. The average licensed mental health professional spends an average of 57 minutes with each client per visit following
the initial session and meets more frequently. Please don’t take this as a direct comparison to physicians because we are intended to work together. Physicians treat chemical imbalances, genetic anomalies, somatic symptoms and dietary barriers impacting mental health through the use of medication management or nutritional guidance. Licensed mental health providers treat behaviors, cognitions, memories and somatic experiences through the use of psychotherapy.
The next main reason for denouncing insurance is the stigma and mistrust related to mental health professionals. This isn’t limited to just licensed mental health professionals but to include physicians and other mental health specialists. In working with clients they have historically expressed concerns around being misdiagnosed and it’s impact on their career. Truck drivers experiencing anxiety could lose their ability to maintain their profession due to potential medication use to support with reducing symptoms. The same could be said for military members experiencing depression being forced into discharge due to a mental health disability. Many clients would rather not be labeled since it could be career ending. If you are using insurance, a diagnosis is required. Which is why many professionals struggle with accepting insurance. If we would argue ethics, LPC’s, LCSW’s & LMFT’s technically don’t or aren’t supposed diagnose clients but if we are using insurance we are required to. We are supposed to treat behaviors and symptoms not necessarily diagnose but we have an ethical duty to do so if it is necessary. Our role is to work directly with their psychiatrist and nutritionist to best help them with maintaining healthy behaviors, diets, medication management or routines that impact mental health. We are meant to work collaboratively to help the client not further add stigma to the client as a person. I didn't even mention the Tuskegee Syphilis Studies, Henrietta Lacks DNA Cells, James Marion Sims Experiments and so many more stories of unethical testing and healthcare practices of Black bodies. These experiments against known consent has contributed to the mistrust of Black families. I could also get into the conversation around physicians sharing that they believe Black women have higher pain tolerance or have a nonexistence of pain leaving us harmed in the hands of healthcare.
Lastly, we want to look at potential harm. Mental health disorders are considered preexisting medical conditions in some cases. Any bill that is submitted to an insurance carrier on your behalf will be accessible by insurance companies, life insurance plans and potentially employers. If an 18 year old begins struggling with depression and suicidal ideations and they attempt to open a life insurance policy. Life insurance companies pull medical records for risk and to search for preexisting medical conditions. What this means is that if a client has the diagnosis on their medical record, it will be visible and that person can be denied for a policy due to risk or be required to pay more for a policy that would cost the average 18 year old way less. This is an example of potential harm to a client. We have impacted their ability to plan for self. Another argument from professionals is that a diagnosis should not be required to treat normal life stressors and others would argue it is necessary but for the sake of insurance, a diagnosis is always required due to the need for evidence of medical necessity. Oftentimes, I ask clients what their diagnosis was from their last therapist or physicians and many can’t tell me but will share they have used insurance the entire time but the provider never talked to them about their diagnosis. This is a huge red flag because clients don’t realize the harm their medical record could cause them.
As we all know, Black and Brown clients are born with stigmas already attached and are forced to grow through racial harm and systems that further harm them. The last thing we as providers would like to do is create more harm and generate additional stigmas to our clients. Most of us do not get into this industry for the money, we have to consider the time, level of training and amount of debt providers are coming out with only to make an average of $60,000 per year while the average psychiatrist makes $170,000 a year when the amount of training and education is just as timely and costly. Again, this is not to compare the two professions but only to paint a picture. So when seeking a provider consider all of the things above as reasons as to why they may not accept insurance.