The Benefits of Private Pay Therapy: Why Paying Out-of-Pocket Could Be the Right Choice
When you go into private practice, there’s a lot to think about. One of the biggest challenges you’ll face is deciding whether or not to accept insurance. If you’re transitioning from insurance-based therapy into being solely a private pay therapist, you may find that your caseload lightens for a bit in the beginning, but it will quickly pick up as you gain momentum.
Some therapists may not know what private pay is, so we’re going to break down the basics. We want you to feel comfortable charging fair rates for out-of-pocket therapy clients as a private pay therapist. There are plenty of advantages of private pay counseling, although it does have its cons. We’ll look at both the pros and cons of being a private pay therapist as well as the benefits of private-pay therapy.
What is Private Pay?
Private pay is also known as self-pay mental health services. This refers to costs that a client pays, including deductibles, coinsurance, and any expenses that may not be covered by insurance.
Private pay therapists do not accept insurance but may submit a superbill to a client’s insurance provider. Superbills are detailed invoices of the services you provide to the client. The client can then submit the superbill to their insurance company in an attempt to receive reimbursement through out-of-network benefits.
It’s important to be upfront with your clients about how much you charge if you are a private pay therapist. Be as transparent as possible – this will earn your clients’ trust.
Choosing private pay for mental health care can be a good option if you want to avoid clients losing insurance coverage and having to find another provider. If you’re a private pay therapist, they pay you directly and can see you regardless of their insurance status. Some people choose therapists who take private pay even if they have insurance because they want their therapy records to remain completely confidential. Additionally, private pay therapy offers greater control over treatment plans without limitations set by insurance companies often dictating the number of sessions covered or type and duration of treatment.
Pros and Cons of Private Pay Therapy
Deciding to be a private pay therapist has its pros and cons. It’s important to weigh each before deciding whether or not you want to be an out-of-pocket therapist for your clients. It can be difficult at first to know if you’re worth the rates, but it’s important to value your skills. You will find clients, and they’ll be your ideal client because they can afford your rates. However, we decided to break down why you may or may not want to only be out-of-pocket for your clients.
Here are some pros and cons of being a private pay therapist:
Pros
You can charge more for your services. Setting your rates as a private pay therapist allows you to charge what you believe your services are truly worth. You're not limited by insurance reimbursement rates, and you can establish a fee structure that reflects your skills, experience, and the value you bring to your clients.
You don’t have to wait to get paid through insurance. With private pay, you don't have to navigate the complexities of insurance billing and wait for reimbursements. Your clients pay you directly, ensuring a more consistent and reliable income stream.
If you accept out-of-pocket insurance, you can see clients who can afford your rates. You’ll attract clients of higher economic standing. Private pay services can attract clients from higher economic backgrounds who prioritize quality and tailored therapy experiences. This not only enhances your income potential but also positions you to work with clients who are more financially invested in their treatment.
One of the benefits of private pay is that your clients don’t have a limited number of sessions that are covered by their insurance so they can keep on seeing you. They’re more in control of their care with out-of-pocket services. Unlike insurance-covered sessions that often have predefined time limits, private pay therapy sessions can be adjusted based on client needs. This flexibility enhances the therapeutic process and helps maintain the client's progress. Private pay clients have the freedom to determine the duration and frequency of their sessions without insurance limitations. This empowers clients to actively manage their mental health journey according to their needs and preferences.
You don’t have to worry about providing a client’s insurance company with documentation in order for them to be reimbursed. This also saves them from potential rate increases from their insurance company. By not involving insurance companies in the billing process, clients can maintain greater control over their personal and medical information. This privacy is particularly important for clients who wish to avoid potential consequences like changes in coverage or the impact on other aspects of their life.
Mental health diagnoses, when documented by insurance companies, can affect future coverage as well as acceptance into the military, ability to engage in risky sports, as well as affect your driving record. Paying out-of-pocket allows clients to keep their diagnosis from insurance companies.
As a private pay therapist, you can offer a sliding scale or lower fees based on income as a way of making your services more accessible to more people. This practice is a powerful tool that allows you to cater to a broader range of clients, regardless of their financial circumstances. Sliding scale rates are not only a gesture of compassion but also a strategic way to make your services more accessible, contribute to your community, and maintain a steady caseload.
You don’t have to file claims or extra paperwork. Embracing private pay therapy also means you can bypass much of the administrative burden associated with insurance billing. Unlike therapists who rely heavily on insurance reimbursements, you're free from filing claims, submitting documentation, and navigating the complexities of insurance company requirements.
Cons
It may be harder to attract a full caseload of clients right away when you only accept out-of-pocket insurance because the cost is usually higher than if you were in-network. Potential clients may perceive private pay services as more expensive. It can take time to build a reputation and client base that is willing to invest in your services.
Clients may seek someone who takes their insurance. This preference can limit your pool of potential clients.
If you live in a lower-income or rural area, you might not attract clients who can afford to pay out-of-pocket. This limitation can impact your ability to fill your caseload. You might want to consider telehealth as a workaround.
When you’re just starting out, you haven’t developed a reputation as a private pay therapist and people may not see you as worth the dollars. It takes time to establish your reputation and communicate your value to potential clients. This challenge can affect your caseload initially.
It can be harder to fill your caseload when you only accept private pay health insurance. Professionals who primarily rely on insurance-covered sessions for referrals might be less likely to refer clients to private pay therapists. This could impact the number of clients you receive through referrals.
As you contemplate whether to offer private pay services in your therapy practice, consider these pros and cons in the context of your goals, the needs of your target audience, and the local market dynamics. Ultimately, the decision should align with your practice's unique identity and your desire to provide quality mental health care.
What are the Benefits of Private Pay Therapy?
Insurance companies may change their rates every year, leading to higher copays and deductibles for clients. Many individuals might prefer to pay out-of-pocket once they learn what self-pay mental health services entail.
If you are a private pay therapist, you likely have a specific specialty. People will pay for therapy with someone who specializes in the area of treatment they need. If you specialize in a particular type of therapy, don’t be afraid of filling your caseload. Many individuals are always looking for someone who works with a specific group or has expertise in a unique area.
Clients who choose to pay out-of-pocket can still be reimbursed by their insurance provider once you submit the superbill. This means that your clients can still benefit from private pay therapy while also getting the care they need through out-of-network benefits.
Private pay therapists may have greater flexibility in therapy payment options and can be more creative with their treatment than those who rely on insurance coverage. If you treat clients with specific needs that cannot be met just by talk therapy alone, private pay therapy allows you to think outside the box for treatment options.
Clients benefit from paying out-of-pocket even if they have an insurance plan. They may opt for private pay if they don’t want their family members to know they are in therapy or if they wish to keep their diagnosis from their insurance company.
As a private pay therapist, especially in a large city, you can fill your caseload quickly and easily by being out-of-network. Often, there are long wait times for therapists who accept insurance. If a client is willing and able to cover the cost of therapy and doesn’t want to wait for a slot to open up with another therapist who takes insurance, you can reap the benefits of private pay therapy by offering immediate availability.
Deciding to Become a Private Pay Therapist
Opting for private pay isn’t for everyone, but if it’s something you’re considering, we’re here to help. If you’re interested in becoming a private pay therapist but don’t know where to begin, we’re here to support you in whatever way we can. Together, we can elevate the practice of private pay therapy and help you create a thriving and fulfilling therapy practice. Remember, you don’t have to navigate this path alone; we’re here to walk with you every step of the way.
The Therapist Network provides an opportunity to make connections with other therapists who take out-of-pocket clients. Join our network to build relationships with other therapists. You don’t have to go it alone!
Dec 15, 2021
