Why Don’t Counselors Accept Insurance?

If you go searching for a counselor, you may quickly run into a problem: finding a counselor who accepts your insurance plan. While most doctors and dentists accept a wide variety of insurance, many counselors accept one or two plans or none at all. Why is this? 

My Story

What would happen if you went to receive your paycheck as normal, and found out that you didn’t get paid? You probably would be pretty angry. Trying to get paid involves navigating through a phone maze until you can get the right person. In a worse scenario, you may need to  tell someone who thought they were paid in full that they owe you more money. Unfortunately, all of these scenarios happen when counselors take insurance. They bill for work and if the insurance company doesn’t pay for it, they have to pass that on to the client. If the client doesn’t pay, the therapist doesn’t get paid, essentially working for free whether they want to or not. I once waited two months and lots of run around to get paid about $2000 worth of claims. The individuals at the insurance company seemed baffled regarding why I was so upset and wanted off the insurance panel. In that case, only a few clients were affected.    

In 2019, I wrote my clients a difficult letter telling them I would no longer be accepting the major insurance provider that held their coverage. While the costs of running my business in Nashville were going up, my reimbursement rate was not. Even though I had kept my clients out of higher levels of care such as hospitalization or intensive outpatient therapy, saving the insurance company money, I was ignored when it came to asking for a rate increase. “You wouldn’t stay with a company who didn’t give you a raise in over three years and neither will I,” I wrote in my letter. 

It was a hard decision for me to make, but I have no regrets. Since I wasn’t getting paid as much by this insurance, I was having to see about 5-7 more clients a week to run my practice and pay myself a modest salary. For someone who specializes in childhood trauma, this was a recipe for mental and emotional burnout. I knew I couldn’t continue at the same pace. I wasn’t going to let corporate greed and bureaucracy stand in the way of a career I loved. 

Today, I am getting the best of both worlds. I chose to stay with another insurance company who treats me well and doesn’t give me headaches. I also have clients who are willing and able to pay cash for services. I am able to see less clients and have time for other things that bring me joy like my podcast.  

While not everyone’s experience is like mine, I have talked to many counselors and compiled a short list of the top five reasons counselors don’t accept insurance. 

1. Counselors are scared of repercussions.

Among counselors I know who do not take insurance, this is the number one reason. They have heard horror stories from other providers about fighting with insurance companies over payments. Even worse, the insurance companies can come back after the fact stating that someone’s therapy was not medically necessary, recouping payments already given to the provider. Could you imagine your boss taking back part of your salary after evaluating your job performance?

2. Counselors don’t want to deal with the headache.

Providers have to go through a credentialing and contracting process to be able to accept insurance. This usually takes about three months and lots of forms. If a counselor has a cash practice, he or she receives money at the time of service without having to wait for money to come in and has zero claims to file or phone calls to make.  

Doctor’s offices have employees whose full time job is to deal with insurance companies. Let that give you pause. These employees verify benefits and follow up on claims. Since most counselors in private practice are solo providers, they do not have time to verify every insurance policy or make phone calls when an insurance company doesn’t pay. This is also why there are no more independent family doctors around, which is also quite sad. 

3. Counselors know running a practice is expensive.

If I am seeing less clients, I have more energy to give to each one of my clients individually. I also have more money for continuing education. I’ve spent thousands of dollars after graduate school to get trained in specific modalities such as EMDR and consult with other professionals who have more experience. I have reaped the benefits, but more importantly, my clients have also.

Some therapists who charge a higher hourly rate are able to give back in ways they care about such as providing pro bono counseling or offering sessions to a limited number of clients at a reduced rate. When I had a full caseload of insurance clients, if I didn’t take their insurance, new clients would ask me if I had a sliding scale. I would tell them, “No, I take insurance.” The truth was, I couldn’t afford to have a sliding scale! I’m in a much better place to give back now than I was previously.

4. Counselors want to invest more in their clients and give where they want to.

If I am seeing less clients, I have more energy to give to each one of my clients individually. I also have more money for continuing education. I’ve spent thousands of dollars after graduate school to get trained in specific modalities such as EMDR and consult with other professionals who have more experience. I have reaped the benefits, but more importantly, my clients have also.

Some therapists who charge a higher hourly rate are able to give back in ways they care about such as providing pro bono counseling or offering sessions to a limited number of clients at a reduced rate. When I had a full caseload of insurance clients, if I didn’t take their insurance, new clients would ask me if I had a sliding scale. I would tell them, “No, I take insurance.” The truth was, I couldn’t afford to have a sliding scale! I’m in a much better place to give back now than I was previously.

5. Counselors who do not take insurance may not be fully licensed yet.  

Counselors must accrue a certain amount of clinical hours after graduating with their Master’s Degree in order to become licensed. Since insurance companies will not reimburse for services from unlicensed counselors, these counselors are unable to accept insurance.

Depending on the area you live in and your presenting issue for counseling, you may have difficulty finding a provider who is accepting new clients. If you need to use your insurance, don’t give up on getting the help you need. There are providers out there who can help you. Unfortunately, due to the state of our current healthcare system, you may have to search a little bit harder for them. 

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