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Posted: July 14, 2011

Insurance in the private practice world

Are you in or are you out?

Teri Karjala

So you've emptied out your head trash, eliminated your negative thoughts and have been propelled by a leap of faith into a world of private practice. Now that the office doors are open, you must make an important decision: Insurance - are you in or out? Please note that I am no insurance expert, nor do I choose to accept insurance at my practice.

The birth of a new practice is exciting; however getting the phone ringing and clients' knocking down your door can bring about restless nights. Insurance can ease your growing pains by removing pressure to generate leads, since clients are sent directly to your door. Affiliation is also a plus.

As an insurance company affiliate you're not an employee, but your name does appear among the plan's list of preferred network providers. In the eyes of some potential patients, having this association automatically boosts your credibility, even before they've become familiar with your credentials.

For those who work on a sliding scale, insurance can bring in more revenue and mend schedule gaps. Most importantly, insurance can motivate a patient to schedule an appointment with a provider simply because the benefits are available for them to use. The bottom line is that insurance serves a purpose whether you choose to accept it or not.

You may find yourself riding along the fence, not sure if you're in or out. There are two alternatives to in-network benefits: (1) Flex Spending Plans; and (2) Out-of-Network Benefits.

Flex spending plans are a pre-tax benefit set up through the client's employer and can be used for a variety of services including mental health. This is a great resource since the account must be spent down prior to year end, and clients will seek necessary services as needed. On the other hand, Out-of-Network Benefits require a greater patient responsibility. However, a client is able to choose a provider outside of their network. As a provider, I prefer Out-of-Network Benefits because insurance companies cannot dictate the rate for services I provide.

The pros of utilizing insurance sound great, so why wouldn't every private practice practitioner accept insurance? Cutting through red tape to get on the boards in the beginning is very time intense, not to mention the challenge of navigating through the system.

A well guided and developed paper trail is essential within the insurance realm. If your trail is not in order a claim can be denied. A paper trail creates an audience of many viewers, therefore heightening the potential to breach a patient's privacy and confidentiality.

Another downside is predetermined treatment for a patient, based upon an allotted number of sessions. This is a true disservice to the client, because the essence of time is detrimental in healing of all wounds. Therefore, how can an insurance company determine when a patient is well, when they've only met them on paper?

As a provider, I've seen my services viewed in generic terms and not relative to my equity as an experienced individual of the field. In the world of insurance a provider is generic and just like a generic product on a store shelf, the insurance company can slash prices at any time. It's a quantity verses quality issue:

After the insurance company has defined your worth, an average price 30 to 50% less than your established rate is determined, and waiting for payment can be an agonizing process. I speak from experience. I've waited 13 months to receive payment from an insurance company.

Though that is not the norm, those in mental health services industry universally agree that prompt payment for services rendered is not custom when dealing with insurance companies. Some practitioners do, however, owe part of their success in private practice to accepting insurance payments. Others have found glory in cash only practices.

At the end of the day the choice is yours. Insurance -- are you in or out?
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Teri Karjala, owner of Creative Counseling Center, LLC, maintains a private practice providing counseling services and offering trainings in the community. For over 10 years, Teri has in worked with children, adolescents, and adults who have experienced trauma. Teri's passion is to inspire and empower clients to live a life of hope, harmony, and happiness. Learn more about Teri at www.creativecounselingcenter.com. www.creativecounselingcenter.com.

Teri Karjala is owner of the Creative Counseling Center, LLC, as well as Talking With Teri, LLC. Teri’s passion for the business aspects of owning and maintaining a business has made her a sought out coach by others in the helping fields. She is a regular columnist for ColoradoBiz Magazine and speaks to therapists across the nation in building their thriving practice. Recently she has released her “How to Live Deliciously” Creative Journal Series to help inspire and empower adults, teens, and children. These are available in print at www.talkingwithteri.com.

Enjoy this article? Sign up to get ColoradoBiz Exclusives. The opinions expressed in this article are solely that of the author and do not represent ColoradoBiz magazine. Comments on articles will be removed if they include personal attacks.

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