Private Pay (out of pocket pay) is becoming increasingly common in the mental health field. This trend is occurring for many reasons. In fact more often than not, I see therapists switching from insurance panels to only private pay. I currently accept both, and that is my continued intention.

Pros of using Private Pay:

  • The therapist is not required to send your confidential information to your health insurance company for payment reimbursement.
  • In order to be reimbursed by an insurance plan, a therapist must provide a DSM V diagnosis. By paying privately that information will not be released and thus it is less likely to have difficulty with seeking new insurance coverage and or your insurance rates increasing. Unfortunately mental health diagnoses provided for insurance compensation are frequently considered a preexisting condition.
  • The therapist has less paperwork to complete and is able to spend less time documenting.
  • You don’t have to stress over copayments or deductibles.
  • All payments received will be given a receipt for payment, and thus you can use this at the end of the year to file taxes (as a medical deduction).
  • The therapist does not have to spend time and effort “justifying” your treatment with your insurance company (via phone calls, emails, etc etc).
  • My Private Pay prices are very reasonable and competitive.
  • We will not be bound by the requirements of your insurance company’s expectations on treatment.
  • If you are an adult client, and do not meet the criteria for mandatory disclosures, then your HIPAA information “should” be completely confidential. Always ask if you have additional questions beyond my page on Confidentiality.
  • If you decide to, you can send your insurance company the therapists information and receipts, and be potentially reimbursed. However this would lead to the disclosure of your treatment information.
  • Treatment may be more effective and time efficient. Having to pay out of pocket tends to be a great motivator to create change.

Cons of Private Pay:

  • You are required to pay for the session in full at the beginning of the session. Cash or Checks are preferred, however credit card payments can be accepted at an additional 5.00 fee.
  • Your out of pocket cost will likely be more vs if you use your health insurance policy.
  • Clients are often not able to attend as often nor consistently because of the financial burden.
  • Private Pay clients are less likely to complete treatment and see the full benefits of the therapeutic process (in my opinion). Despite the financial incentive.
  • Not recommended for clients who require long term treatment, unless the cost is not a financial burden.

As you can see it’s not cut and dry, which is why I prefer to offer both options. Private Pay can encourage the therapeutic process but also inhibit continued treatment.

Angie Simonton, LCSW

Originally posted 6/18