Therapy and Insurance

When most people think about going to a therapist, they worry about how much those services will cost them. If they do have insurance, they wonder if their insurance company will even pay for counseling. If they don’t have insurance, they worry how they can afford those services. If this is your situation, I would like to describe how insurance works so you can become better informed about the process.

Therapist and insurance

In most states, once a therapist is licensed in that state, they are able to apply to the various insurance companies to become part of their network. The process is fairly simple. A therapist needs to be approved by the insurance company, then sign a contract and agree to accept a specified fee determined by the insurance company. The counselor also agrees not to charge the client any additional fees. Once this happens, the therapist becomes listed in the network of the particular insurance company.  The fees paid by the insurance companies may vary greatly. Consequently, not all counselors participate with every insurance company. For this reason, you need to check with your insurance company to see if the counselor you want to work with is covered by your insurance. If that therapist is not in the network, you can still see him or her if the insurance has a clause “out of network coverage”. This means you can see that therapist, but your deductible will be higher.  

The role of diagnosis

All insurance companies pay for services based on what the diagnosis is. The diagnosis system used by the insurance companies comes from a classification system called The Diagnostic and Statistical Manual Of Mental Disorders.  For more information you can go to http://en.wikipedia.org/wiki/DSM-5. Insurance companies reimburse the therapist if the diagnosis is a “medical necessity”. In other words, they won’t pay for career counseling, stress reduction or self exploration, unless there is an underlining emotional or medical concern. This can be confusing when you want to see a therapist for couple’s or family therapy. As stressful as marriage and family issues can be, insurance companies do not consider them medical problems. The way couples or families get coverage is by identifying one of the members as the client. That way, the insurance company will reimburse on that individual’s diagnosis. So it is important that you understand from your therapist who is the identified client and what the diagnosis will be.  Your therapist knows how the insurance companies work and will handle most of this for you.

How will this diagnosis impact you

When you see your medical doctor for an office visit, the doctor tells the insurance company what the nature of the visit was and what was done. This information is communicated to the insurance company by code numbers and in most cases that is all that is necessary. All of the information collected by your insurance becomes part of your insurance record. This is the same for mental health. If you see a therapist who gives you a diagnosis of depression, the insurance company will reimburse the counselor for the sessions and note in your record that you are being treated for depression. This all sounds simple and for most people it is, but there is something else to consider.

Insurance companies collect information about every person who uses there services. They report this information to the Medical Information Bureau or MIB Group. The MIB Group is a reporting agency which gathers information from insurance companies and shares that information with over 500 insurance companies across the nation. Therefore, even if you change insurance companies your history will follow you. These files contain medical diagnoses, medical tests and procedures, driving histories, personal habits that may contribute to health risks such as smoking, overeating, substance abuse and other pertinent information determined by the insurance company. You may find this “information gathering” of little interest to you until you want to apply for individual health, long term disability or life insurance. In those circumstances, the insurance company will use your insurance records to determine whether they will give you a policy and at what rate.

In Conclusion

For most people, using insurance is still the best way to help them with the cost of counseling. Your insurance company will help you understand what your policy covers and what your co-pay is. Then when you meet with your counselor you can discuss what your diagnosis will be so you can be comfortable with what it is.

If you don’t have insurance or don’t want to use your insurance, I advise you to discuss this with your new therapist to see what options are available.

I am very willing to discuss any further questions you may have regarding insurance.
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