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By Julia W.

File Under general Question Beginner

Private Practice: Pros & cons of Insurance

To accept insurance in your private practice or not? A topic that has constantly been a bone of contention in the therapist community. Some opinions are based on rumors, while others are actually facts. The reason why this topic is an ongoing topic of discussion is because it is unavoidable. Before you open your practice doors, you have to decide which payment method to adopt.

Since it seems like there is no end in sight to this discussion, the best we can do is give you the pros and cons of taking insurance. We also have an article about the ‘pros and cons of private pay‘ so that you can make a knowledgeable decision.

Without further delay..


Larger referral network

The biggest advantage of being credentialed by insurance companies is that you get access to an automatic referral network through their in-network provider list.

This is one of the advantages that insurance has over private pay, since private-pay therapists have to look for referrals from other sources. You also have a higher chance of getting referrals from other related professionals, such as doctors, if you share the same network.

More clients

Since more insurance companies are including therapy under medical coverage, it has given clients access to mental health services without them having to pay out of pocket. Having therapy as part of the benefits provides an impetus for individuals to try out therapy, which is beneficial for you.

Sustained caseload

The number one reason why people discontinue therapy is lack of funds. Although some insurance companies only allow a specified number of sessions per year, it’s still better than if a client stops therapy because they can’t raise the full amount every time they are scheduled for a session. With insurance, you’re almost guaranteed at least a few sessions with a client within a specific period of time.

Therapy access for low-income clients

Accepting insurance means that low-income clients who cannot afford to pay for therapy but have mental health benefits can access therapy. Not everyone is in a position to fork out almost $100 every week or even every other week. Insurance comes in handy for such people who need your services.

Builds your private practices reputation

Being credentialed with multiple insurance entities enables you to earn trust from potential clients. This is because you they may feel that if insurance companies are working with you then you must be one of the best. It may sound vain at first, but that credibility is beneficial for you and your practice in the long run!


Long credentialing process 

Every therapist or medical professional who has gone through the credentialing process knows that it is incredibly tedious. It is also time consuming because you have to wait several months to get panelled. There’s also a chance that you might get rejected or put on hold, meaning you might have to repeat the process. This process is what discourages many therapists from accepting insurance.

Long payment period

After filing and submitting claims, you have to wait for up to 30 days to get paid. Worst case scenario is that some of your claims get rejected or are paid incorrectly. Such delays can make budgeting hard, which can be stressful when running a private practice.

Extra administrative costs

Since taking insurance comes with administrative duties such as filing claim forms, sending and following up, you may have to employ an administrative assistant to help you with those tasks. If you choose to do it yourself, it’ll mean that you have to sacrifice billable hours to fulfil these tasks or do them after hours. Doing the latter could take a toll on you and quickly lead to burnout.

Inability to set your own rates

Unlike in private pay where you have the freedom to set your own fees, your hands are tied when it comes to insurance. Insurance companies dictate the rates they are willing to pay you and there is no way to set your own. This can get difficult at times, especially when the rates don’t make economical sense for you and your practice.

It may seem like accepting insurance does have its downsides compared to private pay, but the advantages also make it worthwhile, especially if you’re looking to build a caseload. If you want to work with insurance companies but avoid the hassle of filing claim forms, you can use the superbill. This is a receipt that a therapist or a wellness provider creates to give to clients so that they can submit it to their insurance companies to ask for a reimbursement. This means that clients pay you out of pocket, then they are responsible for obtaining reimbursement from their insurance companies themselves. This can be a win-win proposition, and save you, the therapist, quite a bit of time and energy.

More Advice.