Private Pay Vs. Insurance

Many therapists that have taken insurance in the past are getting sick of the low reimbursement rates and all the effort that goes into taking insurance. Yet people who only take private pay have a harder time finding clients and either have to do more marketing or some end up getting on insurance panels again. Let’s explore the pros and cons to accepting insurance vs private pay, so you can make the most educated decision for your business.

Pros to taking insurance: 

-You’ll likely be able to fill up your schedule much quicker. 

-It will be easier to expand and hire other therapists because you can likely fill everyone’s schedule quicker.

-You’ll be more accessible to clients who otherwise wouldn’t be able to afford you.

-You won’t have to stress as much about marketing.

Cons to taking insurance:

-The insurance company will determine your worth as a therapist.

-Dictate session length and number of sessions a client can do.

-Insurance companies require a diagnosis even if a client doesn’t fit the criteria.

-You could get a “clawback” (returning money to insurance companies) because something does not meet the insurance company requirements.

-It can be a lot of work to get paneled with insurance companies, spending 1-2 hours on the phone to get paid.

-There’s a lot more that goes into handling billing and getting paid.

-Limit a client’s right to confidentiality.

-It may take a lot longer to get reimbursed from insurance companies, some people reporting that it can take weeks or months to get reimbursed.

-You’ll have to work more hours to make the same amount you could if you didn’t accept insurance.

Pros to Private Pay:

-You get to determine your own worth.

-Billing can be a lot easier and less time consuming.

-You can work a lot less and make more money than if you took insurance.

-You won’t have to deal with the restrictions of taking insurance.

-Less chance of burnout from seeing clients.

-You can pay any therapists you hire much more money than if you took insurance.

-You’re likely able to get more qualified therapists by being able to pay them more, and will likely have better client retention.

-Clients who are paying out of pocket are typically much more motivated in their treatment and goals.

-You’re less likely to have as many late cancellations or no shows.

Cons to Private Pay:

-It’s likely going to take longer to fill up your schedule.

-You may feel guilt for not feeling as accessible to clients.

-You’ll need to put more work into marketing and getting your business out there.

-If you want to expand and hire other therapists this may take a little longer.

After being really thoughtful in weighing out the pros and cons, and listening to a lot of other therapist business owners, I decided to take the leap and be a self-pay practice, and we also accept out of network benefits but we don’t have to do any direct work with the insurance companies. This decision has more than paid off, and I was able to fill up myself and hire 5 other therapists all in less than a year. 

If you need help building your private pay practice, click here for my help and I will give you all the action steps to building a successful private pay practice.