3 Ways to Know When You Should Leave An Insurance Panel
As a therapist in private practice, you are no stranger to the multitudes of insurance companies that exist in the marketplace. You have clients every week that ask if you take ACME Insurance, or Jane Insurance, or Joe Insurance. You may or may not be on those insurance panels, but it feels like you should if people are asking if you take clients with those insurance companies.
In fact, it is common that providers starting out in private practice feel the draw to get on as many insurance panels as possible in hopes of reaching and helping as many people as possible. It seems like a logical choice; if I take every insurance I will be able to grow and expand my practice.
For a time, that will work! You will get clients and once you are full it is likely that you will be drowning in paperwork, claims, rejections, denials, more paperwork, calls from the insurance company, etc. You will have an opposite problem. You will be too busy dealing with the administrative side of your practice instead of focusing on the clinical work in your practice. You may be in this position now, and feeling like you are burning out a little.
This scenario may seem a little contrived, but in reality, this exact situation plays out in the lives of mental health therapists and private practice owners all the time. The desire to get on as many insurance panels as possible is driven by a desire to help people but may end up burning out the clinician(s) that are doing the critical work of mental healthcare.
This blog post is meant to help give you the signposts of when to leave an insurance panel and narrow your focus from a billing and credentialing perspective.
Your Time is Absorbed in Administrative Tasks
The first way to know when you should leave an insurance panel is that you are spending more time with the various insurance companies instead of focusing on clinical work. As a clinician, your time is best spent either working on the business or conducting the clinical work. Calling insurance companies, posting payments, following up on appeals, conducting verification of benefits checks, etc. is work that you can easily outsource or hire someone else to do.
Your time is your best asset and as a clinician your time is most valuable when you are delivering quality mental health services to a population in need, not calling the insurance companies. The COVID-19 pandemic impacted a lot of people's mental health. The most urgent need right now is for clinicians that are focused on their patients and on themselves.
If you find yourself spending an inordinate amount of time on day-to-day administrative tasks or billing tasks then you may be overbooked with insurance companies. In an upcoming blog we will look at how you can evaluate which insurances to get rid of.
You’re Not Seeing the Profits
The second indicator of when you should leave an insurance panel is when your practice has low profit margins. One of the consequences of more administrative tasks and a high volume of insurance companies is that your price per session decreases while your expenses increase. So you'll find that at some point with more insurance companies you'll be spending more time on administrative tasks and you'll be making less money.
This is obviously not sustainable for the long term and would need to be reevaluated as soon as you realize there's a problem. To be clear we do not believe that private practice should just be about making money and getting rich, but we believe in sustainability and it is not sustainable to be not profitable.
It would be helpful to have your accountant do a detailed financial analysis of your practice to make sure that you're maintaining healthy profit margins so that as you grow and scale you can serve more clients in your area.
We recommend that you evaluate the insurance panels that you're on based on their price per session. We are not saying that you need to keep only the insurance panels that pay you the most as you might have clinical objectives that require you taking insurance that has a lower price per session. We are advocating that you do your best to distill that risk with higher dollar clients.
You’ve Lost Your Spark
The last way that you know it is time to get off of some insurance panels is that you have lost some passion or fire for what you were doing. Remember the feeling of loving going to work, of helping your patients, and being proud of what you’ve accomplished with your practice? If you are showing up to work everyday dealing with insurance companies and hating every second of it then it might be time to get off those insurance panels.
Getting off insurance panels or even some of the insurance panels that you take could be helpful in making sure that you have proper self-care practices within your day-to-day work schedule. The work that you do as a mental health clinician can be very taxing but it is unsustainable if you lose the passion that you once had for your clients if you have to deal with insurance all the time.
I would ask you to evaluate whether or not you are happy with the workload that you have and your business associates. Oftentimes clinicians think about insurance companies as a far off entity that is a necessary evil. However the insurance company should be viewed as a business associate that you work with in order to provide the highest quality care that you can.
If that business associate is troublesome to work with or creates more problems than it solves then it might be time to reevaluate which insurance companies you work with as a business associate. One of the perks of being in Private Practice is that you are in control of your work environment. Even though it may not feel like it at times, you have the power to make the right decisions for you and your business. Think about insurance companies like you would a coworker or somebody that you hire. If they're producing the results that you would like to see then they are a worthwhile investment. However if they are not producing the results that you would like to see then they might be part of the wrong practice.
If you have any questions about billing for your private practice please feel free to call us at 734-437-9432 or email us at email@example.com and we'll be happy to help you in any way that we can!