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For several years I worked for a practice that did both private pay and insurance (I don’t know anyone that does just insurance and denies private pay. I found that for every three hours in a session, I spent about an hour fighting with insurances to get paid. As I looked at launching my own practice, my dream was to only be private pay. I did not accept insurance when I started, because I was not on any insurance panels and didn’t know how to bill insurance on my own.
I was doing the practice as a small supplemental income, so it did not make sense to have much overhead. As I grew, I realized that I did not need to take insurance to sustain. Here are a few pros/cons of each:
Insurance
Pros:
- Serve significantly more clients
- Diverse economic backgrounds of clients
- Additional referral sources
- Billing is not based on client ability
Cons:
- Significantly lower rate
- Inability to raise rates
- Time (I would plan at least 1 hour of fighting to get paid, completing paperwork, or faxing for every 3 client hours). That means I worked 4 hours and got paid for 3 and at a lower rate.
- Insurance determined progress, what is paid, and client need
- Clients need a diagnosis
- Most panels you need to be 2 years post full license.
Private pay
Pros:
- Get paid more per hour
- Less follow-up for payment
- Less required paperwork
- Your practice is based on the ethical standards of you and your licensing organization
- You choose what to charge and when to give discounts
- Can offer unique services
- You and the client determine their need
- You determine if the client needs a diagnosis
- More freedom
Cons:
- It is harder to find clients and you turn more people away
- Economic background of your clients are often less diverse
- Asking for payment can feel awkward
You may want to decide to do a mixture of both approaches. There are so many quality clinicians that do both approaches. I transitioned to fee-only services in 2009. I am so glad that I made the switch; it has given me more freedom in services, best-practices, and assisting with client need.
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