3 Reasons Why Taking Insurance is a Good Idea for Your Private Practice
There is a lot of information on the internet about why accepting insurance in your private practice can be more complicated and expose your practice to more liability than it is worth. However, we would like to help you understand how accepting insurance in your private practice is a good idea and can be beneficial to the life of your practice. We believe that taking insurance can be a complicated undertaking which is why we don’t put forward the idea that accepting insurance is for every therapist in private practice. We put forward the idea that certain therapists that are passionate about working with a specific population or are okay with a certain amount of risk are in a good position to accept insurance clients. To find out if this is you, read our blog post Things to Consider Before Credentialing: Is Insurance Billing Right for You? In this blog we will walk you through three reasons why taking insurance can be a good idea for your private practice.
Your private practice will get broader market exposure through the insurance company’s marketing channels. Insurance companies have to pay to market themselves and when they do that for their directories you benefit alongside the insurance company. Obtaining free exposure to your practice, your website, and subsequent online materials can be a significant value add for your practice and for your clients. Don’t underestimate the value that free online exposure can bring to your practice.
Not only will the insurance company pay to promote their directories but you can add their name to your website giving your website an SEO boost. When you have the opportunity to list a large organization that has good brand recognition on your website that helps you to gain recognition and trust within your specific client demographic.
Lower Cost Services for Clients
If you accept insurance, it can lower costs for your clients to receive the care they require while maintaining a higher average reimbursement for an hour of your time over the life of your practice. If a client has an insurance plan that will pay for the majority of the session while your client pays a flat copay, then the client wins and your private practice wins as well. In this case a client that would not otherwise be able to afford your services will be able to afford your services.
If your client has a plan that requires them to pay a deductible and then the insurance benefit kicks in after the deductible is met, your client will still benefit because they will not be paying for the retail value of your services. This means that even though your client has to pay the contracted rate of the session, that contracted rate is still discounted from your private pay rate. If this is unclear, check out our article Contracted Rate vs. Standard Rate. Either way the client is benefiting from using insurance and your services, and your practice is benefitting because you are maintaining a positive cash flow with that client.
Stable Revenue Streams
Insurance companies represent stable revenue streams for your private practice as opposed to trusting that each client will pay their bill in full at the time of service. Sometimes clients don’t pay their bills, which is hard. If your practice depends entirely on your clients all paying their bills then your practice is exposed to the risk that if your clients don’t pay their bills your practice will not have the revenue to sustain itself.
On the opposite side of that coin, if your practice’s revenue is made up of clients paying their bills and the insurance company paying claims, now you have diversified your risk and can look to two different payers to foot the bill instead of relying on one payer. We know that taking insurance can still be complicated but there are systems to make sure that insurance is a stable revenue stream for your practice.
Taking insurance in your private practice is a way for your practice to get free marketing, present lower cost services to your clients, and to maintain some stability and diversity in your revenue streams. There are good systems to ensure that taking insurance does not expose you to large amounts of risk and we encourage you to think through how you can incorporate insurance into your practice sustainably and reliably over time. Practice Solutions billing services are designed to help you do just that. We would love to talk to you about your practice’s unique situation, and understand how we could help you make insurance a stable part of your private practice. Contact us to see if insurance billing is right for you!