Counseling Today, Private Practice in Counseling

Relieving third-party payment headaches

Robert J. Walsh and Norman C. Dasenbrook October 7, 2006

Q: I have had difficulty collecting third-party payments from a certain insurance company. My claims either get denied or I have to bill multiple times for the same sessions. I have tried dealing directly with the insurance company with little or no success. Do I have to hire an attorney?

A: Hiring an attorney is the last resort. Dealing with insurance/managed care companies can be frustrating, although, by and large, we have had a positive experience with third-party payers. The major frustration is the time it takes to follow up on a claim that is denied or not paid. Making multiple phone calls, wasting time on "hold," writing letters, sending e-mails, etc., all take the counselor’s time — time that is better spent treating clients or marketing the practice.

Your informed consent document needs to address the collection of fees, not only from the client but from third-party payers as well. We recommend that the financial section of your informed consent document contain a statement such as the following: "As a courtesy, we will bill your insurance company or third-party payer for you, if requested. In the event that the claims are denied, it is the client’s responsibly to pay the balance due."

Your client and the client’s employer — or more specifically, the human resources department (benefits manager) — are the best options for dealing with a stubborn insurance company. That’s because they pay the premiums!

We have found that a call or letter from the client to the insurance company is more effective than contacts from the counselor’s office. If that

doesn’t work, both the client and the counselor (with appropriate signed releases of information) can enlist the help of the benefits manager at the client’s place of employment. The insurance company wants to keep the employer happy, and the employer wants to keep the employee happy. We have resolved numerous insurance problems by having both the client and benefits manager communicate directly with the insurance company.

Typically, an appeal letter is sent from the client, after a signed release, to the managed care or insurance company. A copy is sent to the company’s benefits manager. The clinician also sends an appeal to both the client’s benefits manager and managed care or insurance company outlining the clinician’s credentials and stating the reason the client was referred to him/her.

The clinician should also ask his or her state organization to develop a response to denials. The state organization’s written response to denials should outline the training and extent of practicum involved in the clinician’s licensure. This response should be sent to the client’s employer with a copy to the insurance or managed care company.

For more on informed consent, working with third-party payers and examples of denial appeal letters, log on to the American Counseling Association website at www.counseling.org and go to the "Private Practice Pointers" section. From there, click on "Working with managed care," "Managed care response templates" or "Implementing informed consent."

Q: I am a provider with a certain insurance company that referred a client to me. My usual fee is $80. They paid me only $63 per session. Is there anything I can do legally? I know I cannot legally bill the client for the extra $17 per session. She says she cannot afford it. Any help or insight would be greatly appreciated.

A: Sorry, there is nothing to be done, and managed care does not allow balance billing. Just as airlines sign up with Travelocity, Orbitz or other discount agencies to fill extra seats, we sign up with managed care companies and take a reduction for the opportunity to get their referrals. Most of us accept this as part of "doing business."

If your practice really takes off, you can opt out of some of the "lower paying" managed care companies and focus your practice on the "better paying" ones. A comprehensive list of fee schedules for 56 managed care companies, insurance companies and employee assistance programs has recently been updated and can be downloaded from the "Private Practice Pointers" section of ACA’s website (www.counseling.org). Good luck!

Note: We hope to see many of our readers in March 2007 at the ACA Convention in Detroit. Attend our Private Practice Learning Institute or our minisessions at the Career Center. Or simply stop by the Walsh and Dasenbrook Consulting booth in the exhibit hall and give us your feedback on our column.

Robert J. Walsh and Norman C. Dasenbrook are co-authors of The Complete Guide to Private Practice for Licensed Mental Health Professionals (www.counseling-privatepractice.com). ACA members can e-mail their questions to walshgasp@aol.com and access a series of bulletins on various private practice topics on the ACA website at www.counseling.org.

Letters to the editor: ct@counseling.org