In 2007, I wrote a post called Why Shrinks Don't Take Insurance. The post is a bit dated, the CPT codes have changed since then, and the reasons to not take insurance have increased. Many other doctors don't take insurance now, though psychiatry remains the number one specialty where doctors don't participate in health insurance plans. This is an updated version of that same post.
Many psychiatrists in private practice don't participate with insurance insurance panels. They require the to patient pay and then the patient has the option to submit a claim to his health insurance company as an "out-of-network" service, and reimbursement is made directly to the patient. This may mean that the patient has a higher co-pay and deductible, and the hassle of doing the paperwork. It also means that if the insurance company does not send reimbursement, that the cost is incurred by the patient, the doctor has still gotten paid. If a patient sees a psychiatrist in his network, he pays the deductive and co-pay and the hassle of getting the rest of the money falls on the doctor. Now the overall expense of an out-of-network psychiatrist may or may not be lower -- some plans have excellent out-of-network coverage -- but any way you look at it, the hassle and financial risk are less if a patient sees doctors who participate with their insurance.
Because many psychiatrists do not participate, it means that access to psychiatric care may be limited to those who have the money to pay up front, and the wherewithal to stick their statements into an envelope and send them to the insurance company-- after they've called a separate managed care company, gotten pre-authorization, and had Dr. Shrink submit a treatment plan. They must assume the financial risk that the insurance company might find some reason not to reimburse. Over on PsychPractice, our colleague has a post up about an insurance company that lost the claim, then wouldn't pay it because it was then submitted late, and then wanted the psychiatrist to provide references as to why out-of-network service is necessary. It's about the number of hoops, how high one must jump, and whose going to do the jumping.
By not accepting assignment, the doctor has greater control about what he is paid, but the patient supply becomes limited in a way that restricts access to care. Patients who want the financial and logistical benefit of remaining in their network are often surprised to find that it's difficult to find an in-network psychiatrist (even though the insurance company often has a large list of dead providers) or that those psychiatrists aren't taking new patients, or that they see patients for brief med checks but not for psychotherapy, or that it's hard to find a psychiatrist who feels warm and fuzzy enough. From the patient's point of view, it's not fair. There's a reason for this: it's not fair.
So why don't all shrinks accept assignment, why aren't they lining up to be members of insurance networks who would funnel lots of patients their way? Let me tell the story from the psychiatrist's point of view.
- If a psychiatrist doesn't accept assignment, s/he sets his own fee-- generally what the market will bear. This one is easy, everyone understands wanting more money, and the insurance company fees are often less that what a psychiatrist can charge if he does not participate.
- If the psychiatrist accepts assignment, he agrees to practice according to the terms of the insurance company. He sees the patient and collects the copay. Maybe it's a flat $30 co-pay, after a certain deductible. Maybe it's 80% for the first 5 visits and 70% for the next 5 visits and 60% for all the visits after that oh but the patient is only covered for 25 visits a year and the psychiatrist has agreed not to balance-bill as part of the deal. I don't know what happens if the patient needs a 26th appointment, I believe the doc eats the fee or simply doesn't offer the extra sessions. At any rate, the doctor now needs to figure out how much the patient has to pay and it's his responsibility to collect this. Oh, but it's not 80%/70%/60% of HIS fee that the insurance company will pay, it's 80% of what the insurance company has decided is Usual & Customary Rate (UCR) which is set by the insurer. And while it might be a piece of cake to calculate if the the UCR was say $100/appointment and the patient paid $20 and the insurance company paid $80, but it's a pain in the neck if the UCR is $97.84/ session and you have to keep count of the sessions and figure out the percentages. Should I mention that different insurance policies by the same company can have different payment rates so someone has to call for each patient, verify the insurance, find out the terms, co-pays, deductibles, and this involves sitting on hold and dealing with assorted prompting menus. Did I mention that some patients have two insurance policies? When I accepted Blue Cross in the early 1990's, they would send me checks for $12.44 for 50 minute sessions. I never did figure that one out, nor could my three billing secretaries explain it.
- While many psychiatrists in private practice are able to manage their practices without secretarial support, a psychiatrist who practices in-network usually needs a secretary, an overhead expense his I-don't-accept-assignment friends may or may not want or need. And he now has to have an office big enough to accommodate secretarial space. I'll also tell you that while the secretary is paid an hourly fee, his ability to get paid is only as good as her motivation to follow through on dealing with the insurance companies, refiling denied claims, clarifying primary versus secondary insurance and getting the amount of the co-pays correct.
- And if the insurance company finds a reason not to pay, the doc is stuck--he can't bill the patient, he's just out the time/money. For a psychiatrist who does psychotherapy and sees 8-11 patients/day at an insurance company discounted fee, doing work that does not get reimbursed is a problem. A doctor may decide he can afford to take on some patients at reduced fees, but it's infuriating to be subsidizing an insurance company because the forms were filed with something coded wrong, or because the insurance company lost them.
- Increasingly, insurers have requirements for how the doctor practices. Medicare has it's 1.5% fee cuts for doctors who don't e-prescribe. They have incentives to get doctors to figure out "meaningful use." There are fee cuts if PQRS codes are not done. They still take paper claims, but will likely soon require electronic submissions. Every segment of these mandates requires a large investment of time and often money. Really? Click on the "meaningful use" link I provided and try to read the entire page. Here it's hard to figure out where the hoops are, much less how to jump through them.
So why does any psychiatrist accept insurance? Some doctors don't get enough referrals without participating, some are simply afraid they won't so they don't drop out of networks, others practice in areas where people simply can't afford to take insurance. In some areas of the country, this is just not a mind set: everyone takes insurance, and psychiatrists just do med management.
- Insurance companies pay reasonably for short appointments with a psychiatrist. A psychiatrist who sees two patients in an hour makes more than a psychiatrist who sees one patient in an hour, and often the insurance companies-- perhaps eager to encourage their policy holders to seek psychotherapy with a cheaper clinician-- will pay a reasonable amount for a shorter session-- perhaps they make this worth doing. A psychiatrist who can see four or five patients in an hour and who has a secretary and has a system in place can do well financially by billing insurance companies, but it does require volume. A psychiatrist who sees patients for hour-long sessions will be disadvantaged and that's why in-network psychiatrists don't usually provide psychotherapy.
What you don't hear when you read about how psychiatrists don't take insurance is that we still like what we do. I still have a job where I spend each hour listening to patients without interruption, I then put a note in a real paper file in a metal filing cabinet. I just read that the average primary care doctor spends 2/3 of their time on clerical work. I'm happy to say that I spend the vast majority of my time in e-free sessions with my patients and I'm hanging on to that for as long as I can. But it's not just about the money, it's about three things: the money, avoidance of mountainous paperwork hassles, and the the freedom to practice psychiatry in a rewarding way.