Should You Accept Insurance In Your Practice
First, let me clarify that I am not advocating that you must accept insurance in your private practice. That is not the point of this blog post. My point in writing this post is to give you reasons to consider when weighing whether to go the insurance route or not in your private practice.
As a company serving the mental health profession, we work with organizations of various sizes. Users of TheraNest range from non-profits, to part-time practitioners, to large, multi-location organizations. We love what they all do – great work that improves lives.
To me, our job extends beyond providing a software product for mental health organizations to helping provide useful information to help you grow and maintain a healthy practice.
For any organization, healthy revenues are part of what makes up a healthy organization and, for our customers, that ranges from donations and grants to client payments and insurance. We have a vested interest in celebrating the successes of our clients and passing on information we consider relevant to achieve or continue that success.
I’ve said all that to bring me to this point: as an organization, at some point, you will be faced with the decision of what revenue sources are important and critical to your business. One of those sources is insurance and with it comes certain concerns and considerations about paperwork, control, and other issues.
Insurance can be a source of clients referrals.
Insurance companies are a source of client referrals that can be hard to replace. Clients who have mental health coverage will look for therapists who can accept their insurance and it will be nice for you to have a competing chance. As mental health services are now required to be covered under the Affordable Care Act, this could lead to an increased number of new patients for your practice.
Insurance payments can create a cushion for cash flow issues.
The question of cash flow for our non-profit clients, say a Catholic Family Practice or other social service organization, hinges on how much support they believe will come from donors. For the for-profit practitioners though, you need to consider the fact that cash-only clients may require steep discounts to afford your fees. Many times the discounts will be below what insurance companies will pay in your market. If this is not a part-time gig for you, you have to think of ways to make up the difference until you can build your practice and that can sometimes take time. Depending on your client demographics, it may take a while to build up a sizable practice that will sustain itself. And similar to any business, you will have some clients who don’t pay on time or don’t pay at all.
On the other hand with insurance, you have a floor you won’t go below and you are guaranteed, in most cases, a minimum revenue amount and, over time, better planning for cash flow.
Insurance companies can be a source of accountability.
The reason many people avoid insurance is because they believe it will lead to unnecessary paperwork and administrative burdens. Truth is for most private practices, this will not be the case. You’re not a large hospital with complicated paperwork. However, with insurance you will need to keep good notes, preferably using a good counseling and therapy notes software. Make sure the software you use will help you track your codes and notes properly and remind you to stay up to date with your notes.
If you do that, you will have what you need most of the time for insurance billing. A good software will also make submitting claims easy and it will check for obvious errors that can delay payments. For the most part, this will be all you need to bill effectively.
Knowing that you have to report these to get paid and to have them handy should you get a request or an audit will be a motivator to have a well organized practice with good documentation.
In all, it will lead to a better business with better processes which is always a recipe for growth.
Those are some of the reasons for you to keep in mind. We’ll address more issues in the blog, so feel free to look around. You may even find articles on how some of the successful cash only practices we know are doing it.