Even among clients with insurance, private pay remains a popular choice for those seeking therapy. It doesn’t seem to make sense though right? Why would a client who could have their treatment “free” still seek out a mental health professional that doesn’t accept insurance? How can a therapy practitioner attract more of these cash clients?

Why do therapy clients prefer to pay cash?

There are actually many reasons a client will avoid using their insurance.

  • Privacy
  • Availability
  • Alternative treatment modalities
  • Copay cost vs. benefit

Client Privacy

One of the biggest reasons is for privacy. There is considerable fear of having a behavioral health treatment on one’s “permanent record” as it were. Rightly or wrongly, many patients perceive that they could be subject to discrimination as some point from using their mental health benefits. This is especially true with employer-provided health benefits. While HIPAA and other privacy laws are rather clear in their aims to protect patient privacy, the problem is that now the insurance company “knows” you need mental health care. Will that affect your insurability in the future? Will your boss find out about it? The facts aren’t actually important here — what is important is the perception of the client. They feel less confident seeking out behavioral health treatment if there is even the remote chance that their “problem” is exposed to those that they would rather not have knowing about their concerns.

Therapy Appointment Availability

Another issue with using insurance for mental health care is that there is often a huge backlog of patients among practitioners who accept their particular insurance. As an experiment, I’ve called dozens of network providers for a few major health plans to inquire about their availability. In many cases appointments weren’t available for many weeks. One provider was booked up for the next 8 weeks! That’s two months I might have to wait for care. When you’ve arrived at a place where you are ready to seek professional help, there’s nothing more frustrating than having to endure your situation for a month or more.

Online Therapy

Newer treatment modalities, such as online therapy, are covered by some insurance companies, but often the claims rules are so Byzantine that many insurance therapists aren’t fully familiar with how to offer online counseling and have it reimbursed. At iCouch, we’ve been studying this issue for a while and part of the problem is that many digital claims and verification systems don’t have the proper CPT codes for online treatments. What that means is that while an insurance company might cover online therapy, the eligibility verification systems aren’t yet returning the proper acknowledgement of online therapy eligibility. We’re working with several companies on trying to fix that problem, but it’s likely going to be a while before most insurance companies provide the proper verification data necessary for instant eligibility. It’s a very complex issue because each insurance company has a different system with different data formats. The result is that many patients that want an online counseling option are unable to enjoy that option when dealing with insurance therapists.

Therapy Appointment Copays

Many health plans have a copay of $20-50 for a behavioral health appointment. At $50, the “value” of using insurance versus just paying a therapist their typical $85 (average) fee isn’t so compelling. Why would a client want to wait potentially for weeks for an appointment with a therapist who isn’t your first choice when you could just pay the cash-price and get exactly the services you want?

I’m certainly not making any arguments against insurance therapists. Not at all! I’m just illustrating some of the thought process that results in patients seeking out private-pay therapists.

Three keys to getting more cash therapy clients

So how can the private practice therapist take advantage of these situations?

  • Availability Having frequent availability, especially at non-standard times is going to be a huge incentive for a patient to pay you cash versus ensuring the insurance therapist waiting game. Of course, we would be remiss if we didn’t mention that the new iCouch will have an amazing real-time booking system which will make this easy — a client wouldn’t even need to call, they could see your calendar and book instantly. Reducing booking friction is a huge win for the behavioral health practitioner. Often making that first phone call to a therapist and then waiting for days or weeks before an appointment leads to a potential client abandoning their goal of treatment.
  • Specialization We’ve talked about the value of building your niche and therapist branding in many prior posts. (Be sure to read this one about becoming a therapist entrepreneur.) However, to attract more cash clients, specialization is a huge benefit. If a client perceives that you are the best choice for their particular issue, they’d certainly rather pay you your fee in full rather than paying a $50 co-pay to see a therapist who might not be exactly what they want. Take therapist branding seriously if you’re serious about building your therapy practice among cash clients.
  • Online Therapy Of course, this is the iCouch blog and HIPAA compliant video conferencingis one of the features for which we’re famous, so we certainly can’t neglect mentioning online counseling! But in all seriousness, providing online treatment options for clients is a great way to take advantage of the current sluggishness of the insurance industry regarding video therapy. If you want to become an online therapist, you don’t need to go all-in. Read our article about how to add online counseling to your existing practice for some tips. Even providing an occasional online option for followups is a great way to attract cash clients. Certainly don’t practice within a modality in which you don’t feel comfortable, but definitely have a look at your options. You can visit our Online Therapy blog topic to read some articles that may help.

Where should the mental health practitioner go from here?

If you already accept insurance, you’re probably aware that there is significant administrative cost to accepting insurance. You also don’t always have the flexibility that you may want. Of course, the advantage of insurance is that you’ll likely have a full-slate of clients. However, it’s certainly worth considering how you can supplement your practice with more cash clients. If you are a new therapist or you don’t currently accept insurance, it’s a great idea to understand how you can differentiate yourself in order to attract more cash clients. Ultimately, even in an environment of everyone being insured, there will always be a demand for high quality behavioral health professionals outside of the insurance networks. As insurance costs increase and reimbursement rates decline, keeping an eye on the cash side of your business is prudent. Cash clients will help insulate you from insurance changes that can affect your business. The smart therapist is always looking at ways to maintain and increase income regardless of the current state of the marketplace.

Published by Brian Dear

Brian is the cofounder and CEO of iCouch, Inc. He has an extensive background in software engineering, inbound marketing and mental health practice management.

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  1. Hello…Your site looks really wonderful and has a lot of potential but filling out the forms is somewhat tedious. I am having trouble setting up a trial event. When I corrected a line item for appointment time and pressed save, it repeatedly said “start time cannot be after end time” even though it was not corrected. Do you have a contact number to ask questions?

    Thank you.

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