Should You Use Insurance to Pay for Psychotherapy?
In today’s climate of managed care and so many denied health claims, when so many people are complaining that they don’t even have health insurance, it is only natural that you would want to use the insurance benefits you do have, and make the most of them.
However, when it comes to using insurance for Mental Health benefits, are you aware of how the insurance companies use the information that MUST be disclosed by your therapist? Not many people are. Are you aware of the information that your therapist MUST submit to the insurance company in order to be paid?
Your therapist is required to submit a diagnosis. Just as when you visit your medical doctor and he or she submits a bill to you health insurance company they are required to submit a diagnosis. Many insurance companies no longer cover routine preventative medical visits, such as a yearly physical, or a flu shot. Therefore, in order to be paid by insurance or for you to reimbursed, you doctor may put down something like “Sinusitis,” or “Headaches” or something relatively minor, just so there is a diagnosis. Most of these ailments plague most people at one time or another and they are pretty harmless diagnoses.
When it comes to mental health, however, many diagnoses, once made, remain on your medical history forever. Some diagnoses are considered more serious – such as Major Depressive Disorder, Bipolar Disorder, eating disorders, Panic Disorder and some schizophrenic disorders. In California, the law says that insurance companies must treat the above diagnoses the same way they treat any medical diagnosis, and must reimbursed them at the same rate. However, most mental health diagnoses, such as Generalized Anxiety Disorder, or other mood disorders, or perhaps even Post Traumatic Stress Disorder are considered “non-severe” and may not be reimbursed at all, or maybe be reimbursed at a very low rate - maybe as low as $25.00 per visit.
Regardless of your diagnosis, if at anytime in the future, you are in a position where you are trying to obtain an individual health insurance policy, or even life insurance, you will be asked if you were ever treated for a mental health issue, or a mental illness. If you have ever had any type of mental health diagnoses, you must indicate this on your application and this can be the basis for denying your application, even if your treatment was 20 or more years earlier.
In addition to telling your insurance company your diagnosis, your therapist may be asked to submit treatment plans, the number of sessions you have had and the number of sessions your therapist expects you have in the future. These are things that should be decided between you and your therapist, not by an anonymous case manager who doesn’t know anything about you or who you are. Each client should be treated as an individual, and therapy should be determined on an individual need, not on an arbitrary number determined by profit and loss of the insurance company.
Most insurance plans have the right to “audit” their contracted provider’s files with little notice. This means that someone from your health insurance company can come into your therapist’s office and read your case file. Again, no one should be reading what is in your file except your therapist and anyone you give express permission to. When you use your health insurance, you are granting them permission to obtain all of this very personal information simply by using your benefits for coverage. When you use insurance, your permission for them to read your file is implied and does not need to be expressly given by you.
If however, you pay for your therapy sessions out of pocket, everything regarding your treatment remains as it should – strictly confidential between you and your therapist. No one needs to ever know you were in therapy unless you tell them, or again, give express consent for your therapist to do so, in writing. And even a consent you give in writing to your therapist can be revoked by you at any time. Not so with the insurance company.
The decision whether or not to use your insurance for your therapy is not just a financial issue; it is also a privacy issue. This is a decision you should consider carefully. We are all aware of the expense of therapy. But rather than think of psychotherapy as an expense, try thinking of it as an investment in yourself and in the quality of your life, now and for your future.
However, when it comes to using insurance for Mental Health benefits, are you aware of how the insurance companies use the information that MUST be disclosed by your therapist? Not many people are. Are you aware of the information that your therapist MUST submit to the insurance company in order to be paid?
Your therapist is required to submit a diagnosis. Just as when you visit your medical doctor and he or she submits a bill to you health insurance company they are required to submit a diagnosis. Many insurance companies no longer cover routine preventative medical visits, such as a yearly physical, or a flu shot. Therefore, in order to be paid by insurance or for you to reimbursed, you doctor may put down something like “Sinusitis,” or “Headaches” or something relatively minor, just so there is a diagnosis. Most of these ailments plague most people at one time or another and they are pretty harmless diagnoses.
When it comes to mental health, however, many diagnoses, once made, remain on your medical history forever. Some diagnoses are considered more serious – such as Major Depressive Disorder, Bipolar Disorder, eating disorders, Panic Disorder and some schizophrenic disorders. In California, the law says that insurance companies must treat the above diagnoses the same way they treat any medical diagnosis, and must reimbursed them at the same rate. However, most mental health diagnoses, such as Generalized Anxiety Disorder, or other mood disorders, or perhaps even Post Traumatic Stress Disorder are considered “non-severe” and may not be reimbursed at all, or maybe be reimbursed at a very low rate - maybe as low as $25.00 per visit.
Regardless of your diagnosis, if at anytime in the future, you are in a position where you are trying to obtain an individual health insurance policy, or even life insurance, you will be asked if you were ever treated for a mental health issue, or a mental illness. If you have ever had any type of mental health diagnoses, you must indicate this on your application and this can be the basis for denying your application, even if your treatment was 20 or more years earlier.
In addition to telling your insurance company your diagnosis, your therapist may be asked to submit treatment plans, the number of sessions you have had and the number of sessions your therapist expects you have in the future. These are things that should be decided between you and your therapist, not by an anonymous case manager who doesn’t know anything about you or who you are. Each client should be treated as an individual, and therapy should be determined on an individual need, not on an arbitrary number determined by profit and loss of the insurance company.
Most insurance plans have the right to “audit” their contracted provider’s files with little notice. This means that someone from your health insurance company can come into your therapist’s office and read your case file. Again, no one should be reading what is in your file except your therapist and anyone you give express permission to. When you use your health insurance, you are granting them permission to obtain all of this very personal information simply by using your benefits for coverage. When you use insurance, your permission for them to read your file is implied and does not need to be expressly given by you.
If however, you pay for your therapy sessions out of pocket, everything regarding your treatment remains as it should – strictly confidential between you and your therapist. No one needs to ever know you were in therapy unless you tell them, or again, give express consent for your therapist to do so, in writing. And even a consent you give in writing to your therapist can be revoked by you at any time. Not so with the insurance company.
The decision whether or not to use your insurance for your therapy is not just a financial issue; it is also a privacy issue. This is a decision you should consider carefully. We are all aware of the expense of therapy. But rather than think of psychotherapy as an expense, try thinking of it as an investment in yourself and in the quality of your life, now and for your future.
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