Counseling Today, Private Practice in Counseling

Medicare nonpayment and the ‘incident to’ provision for counselors

Robert J. Walsh and Norman C. Dasenbrook February 1, 2006

Q: I have interviewed (for employment) with a medical clinic. They would like to hire me. However, the issue of LCPC (master’s degree licensed counselor) nonpayment for Medicare seems to be the roadblock. They seem to have a large percentage of Medicare clients, and they believe they would lose money hiring an LCPC. Help! This is my last effort to seek employment with this medical group. Do you have any ideas?

A: Medicare rules allow payment to LCPCs if they are employed by a psychiatrist under the “incident to” provision. (The following is taken directly from the policy of Medicare management, Wisconsin Physicians Service.)

“Incident to” services are defined as “services or supplies furnished as an integral although incidental part of the physician’s personal professional services” (MCM 2050.1). The “incident to” provision also applies to coverage for psychological services furnished “incident to” the professional services of nonphysician practitioners.

For the complete explanation, go to

html. Also, we would advise checking the rules in your state and then presenting this information to the employer as reason to hire you. Good luck.

Q: I have had my own practice for the past five years. Recently a colleague received her MSW, and we are interested in creating a partnership. We are unsure how to go about establishing a partnership with my existing practice. Any information or suggestions you could provide would be helpful.

A: Without knowing how your solo practice is presently set up, we can’t say for sure, but let’s assume you are a sole proprietor (not a subchapter S or PC). The simplest and least expensive method is to set up a “joint venture” with your social worker partner. I have been in private practice with a licensed clinical social worker for 23 years and we have a joint venture.

As I understand it from my accountant, in this type of partnership you and your partner pool a set amount of money to pay for common/shared expenses. From this pool of funds, which are split 50/50, you pay items such as rent, phone, utilities, office help, etc. These expenses are reported on each of your taxes on schedule C. No other income or revenues generated by you or your new partner are comingled, thus each partner’s income is based on production (number of clients treated and fees collected) and not dependent on the other partner. As always, please consult your accountant. Good luck in your new venture.

Q: I am having a difficult time gaining access to managed care companies if a new client wishes to see me and I am not with the managed care company that handles the client’s mental health coverage.

A: We have developed the following strategy (we call it the “Three-Part Response”) to respond to denials by an insurance claim or refusal to allow a clinician to be a member of a managed care panel. For the most effective response, all letters should be sent.

1. A letter is sent from the client (after a release signed by the client) to the managed care or insurance company explaining why he or she wishes to see this particular licensed therapist. A copy is sent to the client’s benefits manager.

2. The clinician sends an appeal to both the client’s employer benefits manager and the managed care or insurance company outlining the clinician’s credentials and the reason why the client was referred to the clinician.

3. The clinician asks his or her state organization to develop a response to denials. This letter outlines the type of license, the training and the extent of practicum involved. This is sent to the client’s employer with a copy to the insurance or managed care company.

We’ve found this to be an effective way to respond to denials. The clinician is usually listed as an “ad hoc” provider with the assigned new provider number. Many times, the clinician is included in the managed care company’s database as a regular provider. More information, including examples of letters, is available on the American Counseling Association’s website ( Click on “Counselors,” then “Private Practice Pointers,” then “Managed Care Response Templates.”

Editor’s note: The American Counseling Association has partnered with Robert J. Walsh and Norman C. Dasenbrook, authors of The Complete Guide to Private Practice for Mental Health Professionals (see to provide information on private practice issues. ACA members can e-mail their questions to

In addition, ACA members can access a series of free bulletins on various private practice topics. From the ACA home page at, click on “Counselors” and then click on “Private Practice Pointers.”