The Pros and Cons of Accepting Insurance: A Guide for Mental Health Professionals

The demand for mental health treatment continues to climb since the Covid-19 pandemic, according to the American Psychological Association. According to the survey:

More than 8 in 10 (84%) psychologists who treat anxiety disorders said they have seen an increase in demand for anxiety treatment since the start of the pandemic, compared with 74% a year ago. Demand for treatment of depression is also up, with 72% of psychologists who treat depressive disorders saying they have seen an increase, compared with 60% in 2020. Other treatment areas with greater demand included sleep-wake disorders, obsessive-compulsive and related disorders, and substance-related and addictive disorders, the survey found.

The need for mental health services is incredibly high. For patients, finding an available therapist, especially one that takes insurance, is quite the challenge. Accepting insurance is a hot button issue for many mental health professionals, many we speak with are adamantly against accepting insurance. While no single organization tracks exactly how many therapists don’t accept insurance, One study suggests that 42% of therapists in California don’t accept insurance at all. This gives us a pretty good idea across the United States the numbers of therapists that don’t accept insurance. But why is that the case? In this post, we will highlight the pros and cons of accepting insurance for mental health professionals.

Therapist Options for Accepting Insurance

Therapists and other mental health professionals generally have two options for accepting insurance in their practice. Let’s review each option:

1. Joining an Insurance Provider Panel

For mental health professionals wanting to be directly reimbursed by insurance companies, joining an insurance provider panel is an option. This process is typically very intensive and can take several months to get approved. Once a mental health professional has been approved, they will pay therapists directly for their services. There are certainly pros and cons to choosing this option, we will highlight these in detail below.

2. Becoming an Out-of-Network-Provider

The second option for mental health professionals is a popular option that utilizes a document called a superbill, which is a document that is submitted by a client directly to their insurance companies to receive reimbursement. Typically, an out-of-network provider will accept payment directly from their client, and it is up to the client to seek reimbursement, which is not guaranteed that they will receive the full amount or even partial amounts of reimbursement.

For mental health professionals, having an effective superbill template can help your clients receive reimbursement from their insurance provider.

Now that we’ve reviewed the 2 options for accepting insurance, let’s explore the pros and cons of accepting insurance.

Pros of Accepting Insurance

There are certainly several benefits or pros to accepting insurance for mental health professionals. Let’s review a few of them:

  • More clients that find you through insurance providers
  • Advantageous for private practices in rural areas
  • You’ll get a greater diversity of clients
  • You get a little more credibility since the insurance company credentialed you
  • Lower costs for clients
  • You’ll get referrals from other doctors who are in your network

Cons of Accepting Insurance

While some practices find accepting insurance to be beneficial, many do not and find accepting insurance to have very low benefit to their practices. Here are some cons of accepting insurance:

  • The credentialing process is very tedious and time consuming
  • Filing claims can be overwhelming and may require additional staff to handle
  • Rejected claims can slow down your ability to getting paid
  • You’ll most likely need other software in place
  • Insurance companies will determine your reimbursement rate for their patients
  • Low reimbursement rates many times

How to Choose The Best Insurance Panels for Therapists

When you’re trying to see if you should accept insurance, it’s important to see what options are available in your area. For therapists who  are interested in joining a provider panel, it’s important to weigh what each provider offers, including the following:

  • What is the reimbursement rate for each provider panel?
  • Which insurance provider is the most popular in your area? Larger panels are better options because they accept more patients
  • What do other therapists say about each panel?
  • What is the process and requirements for receiving reimbursement?
  • Which insurance panel do you meet the credentialing requirements for?

Before you proceed with an insurance panel, you should factor each one on the above merits to see if they are a good fit for your specific practice.

Why So Many Mental Health Professionals Don’t Accept Insurance

Mental health professionals, including psychiatrists, psychologists, therapists, counselors, and social workers, are often dissuaded by several factors including:

1. Low Reimbursement Rates

Let’s face it, low reimbursement rates from insurance providers is probably the top reason mental health professionals don’t accept insurance. As a mental health professional, helping people overcome is in your blood. However, you still need to make enough money to live, pay the bills, and take care of your family.

Insurance providers often reimburse at different rates. For example, insurance company A may reimburse you $50.00 for a 1 hour counseling session, and insurance company B may reimburse you $150.00 for that very same hour and service. Because rates vary wildly between insurance companies, some therapists choose to only work with ones that pay more.  It’s also common for newer mental health professionals to start with insurance, and slowly wean off their use of insurance companies as they get more and more patients.

2. Struggle Dealing With Insurance Companies

Insurance companies are notoriously difficult to work with. Some insurers require continual documentation to justify treatment of a patient. This is because insurance providers make profits when their recipients don’t use their benefits, so they set very high standards to get claims approved.

3. Demand for Therapy is High

The third reason why many mental health professionals don’t accept insurance is because demand for therapy right now is incredibly high. There are not enough mental health professionals for the mental health needs in our world, especially after a pandemic like Covid-19. Because demand is incredibly high, patients are flocking to mental health professionals and paying higher rates for therapy and medication management. This paradigm creates little need or desire for mental health professionals to go through the painful process of working with insurance providers while not getting paid their full rates.

4. More Administrative Work

Insurance companies are often extremely large in size and have the manpower to make a therapist crazy with paperwork. The administrative costs therapists and other mental health professionals must spend to take insurance make taking insurance a huge barrier in their practices.

Why Being an Out-of-Network Mental Health Provider Makes Sense for Many Therapists

Make your practice an out-of-network provider makes sense for many mental health professionals. Let’s explore some pros and cons:

Pros of Being Out of Network

  • You can charge what you want to and will on average make more money per session
  • You will get paid quickly (usually credit card or cash before a session begins)
  • You won’t need to file any paperwork with insurance companies (hooray!)
  • You will need less staff to handle this paperwork
  • Your services will appeal to more affluent clients

Cons of Being Out of Network

  • Your marketing strategy will need to be top notch to generate private pay clients
  • You’ll receive a less economically diverse clientele
  • You may receive less referrals
  • You may need to educate your clients on how to send a superbill to submit to their insurance provider

How Clients Can Send a Superbill to Their Insurance Provider

If you’re leaning towards being an out-of-network provider, we highly recommend you adopt the use of providing your clients and patients with superbills.



After you create a superbill or get an editable superbill template like ours, let’s review how your clients can submit a superbill to insurance companies:

  1. Fill out superbill with correct services and service codes
  2. Mail, fax, or upload superbill to an insurance provider’s website
  3. After typically a few weeks, an insurance provider will process the superbill and reimburse them.

Conclusion on the Pros and Cons of Accepting Insurance

Thank you for reading our post on the Pros and Cons of Accepting Insurance for Mental Health Professionals! TherapyByPro is an online mental health directory that connects mental health pros with clients in need. If you’re a mental health professional, you can Join our community and add your practice listing here. We have assessments, practice forms, and worksheet templates mental health professionals can use to streamline their practice. View all of our mental health forms, worksheet, and assessments here.

Anthony Bart
Author: Anthony Bart

Anthony Bart is a huge mental health advocate. He has primarily positioned his marketing expertise to work with mental health professionals so that they can help as many patients as possible. He is currently the owner of BartX, TherapistX, and TherapyByPro.

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