How To End Your Relationship With Insurance Panels – Part 1


(This is the first of a two-part post on terminating your
relationship with insurance and managed care companies.)

Earlier this month, I received this email from Marian Moldan, LCSW-R in New York. She wrote:

I have been in private practice for the past 30 years. I have recently decided to leave the insurance panels because they are eating up my family and client time with little or no financial return to speak of. Do you recommend sending a letter to clients first to prepare them for the change and then sending a letter to the panels? Thank you for a wonderful website, Marion.”Image of Insurance Claim form

Marian! Congrats to you! And, I’m so glad you asked . . . . I, too, started out by applying to get on a zillion insurance and managed care panels. After several years of spending more time on billing, getting re-authorizations, completing mounds of paperwork, and ultimately losing thousands of dollars when the insurance companies refused to pay for my professional services already rendered, I resigned from all panels. I am happy to say that I have now been a fee-for-service practice for about 15 years and it feels great . . . !

Before you notify your clients of your decision to remove yourself from insurance panels, you should take time to read your contracts. Remember you have entered into legal obligations with each of the panels that you are on. Most insurance companies stipulate the process for terminating your relationship with them. All require written notice from a provider. Some require a minimum length of time before the termination goes into effect. They may even require that you continue to work with clients already under your care at a previously contracted rate. Read your contracts before you do anything.

If you are ready to leave insurance panels behind, re-read those contracts and check back in here.  In my next post, I’ll tell you what other steps you should take to ethically, professionally, and effectively end your relationship with insurance and managed care.

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  1. This is great, but for those of us looking at private practice, how to start out without being insurance panels?

    • Hi, Jill! It’s good to hear from you! OK, so I’m thinking this is a really great question but . . . it’s a little broad so I’m not sure I’m understanding what you are asking . . . . The short answer is that you will explain to prospective clients (when you are talking about fees) that you do not work directly with an insurance company but will support your clients in doing so. And, you will give clients receipts for them to file with their insurance companies if they choose to do so.

      Is this what you were asking for, Jill? Or, have I missed the boat?

  2. Donna Howard says:

    Thank you so much for this posting. My partner and I opened a practice in March and were just starting to consider working with insurance companies! After reading this post, I have renewed my initial
    feel that I’d like to try to build my practice without working with insurance companies.

  3. Allen Young says:

    Hi, Tamara.
    It seems that most of the problems I read about on your site regarding the mounds of paperwork associated with managed care involve clinicians who are doing all of their own billing. The clinician from whom I rent space pays a professional 10% of her fees to do all the billing and to let her know when new treatment plans are due and that sort of thing. She says she has lost no money as far as she knows – except for that 10% a month. When you were in with the managed care companies, did you do all your own paperwork or did you have help as my colleague does? Of course, there are other reasons to avoid working with managed care beyon the red tape, but that hassle is often given as one of the main reasons to enter into a fee-for-service practice. I look forward to your reply, as always.


    • You are right, Allen. You can pay a service to do your billing and collect your fees for you. Many physicians use this type of service and the rate you should expect to pay is about 10% of whatever they collect. I see that I need to write a post about the pros and cons of using such a service but suffice it to say that both exist and I opted not to use one.

      If the hassles were limited to simply sending bills and receiving money, I might not object. But, in addition to completing treatment plans, many managed care companies require you to repeatedly seek initial and repeated authorizations (from them) for coverage of your services, audits that require additional paperwork and time spent on the phone trying to convince them of the medical necessity for your services, resubmission of paperwork that was rejected because or errors (yours or theirs), etc. Then there are the delays in receiving payments, and all of the other “gray” areas that swayed me to end the practice of filing on insurance for my clients.

      But, yes, there are billing services that would be happy to work with you to save you a slice of that headache.

  4. Allen Young says:

    This is for the Roll Call. I am a 46 year old father and husband. I have worked for the Georgia mental health or prison system for most of my professional life but I have finally decided to start my own practice. I work full time as a correctional mental health counselor besides being a husband and father and a Stephen Minister at my church, so I am starting out slowly. I am finding that there are many people who are willing to pay cash though, in a rural Georgia county like mine, you have to be willing to consider a sliding fee on a case by case basis. I think that by charging cash up front, I am more likely to attract clients who are interested in makeing changes in their lives. So far, I’m enjoying it but I continue to weigh the managed care vs fee-for-service options. You are a big help, Tamara. Thanks!

    • Thanks, Allen, for checking in here! It helps us “know” each other a little better when folks drop in here for Roll Call and I’m glad to have you on board with us! You already know how I feel about working with managed care but I want to stress that it doesn’t have to be an all-or-nothing proposition for you. You may want to apply to be on one panel or two – possibly those that pay the highest rate for reimbursement or those that have the lowest “hassle-rate.” And, a different option might be that you apply to get on the panels of those that allow you to accept full payment from your clients and then have your clients seek reimbursement rather than you. It’s a good way to test the water, so to speak . . . working with a few insurance companies until you determine if it’s what you really want to do. Don’t take my word for it – check it out for yourself, if you like. I’m happy to be proved wrong (once in a while)!

  5. Allen Young says:

    Thanks, Tamara, for reminding me of all the other hassles. Like any situation, there will be people who have different responses. My colleague doesn’t seem to mind the paperwork and the billing person just gives her what needs to be corrected and she does it. I also get the impression that she is not the “bread winner” and doesn’t have kids so is not as concerned about the money as people may be if their practice is the primary source of income.

    One of the things I dislike about working for a public agency is the amount of paperwork and the reality that the more useless paperwork you have to do, the less energy and enthusiasm and desire you have to do therapy. I have listened to people pour out their hearts while hearing the voice in my head saying: “You have to do the treatment plan today! You have to do the treatement plan today!” This is very unpleasant. You wind up doing so much documentation to show that you’re doing your job that the only job you really do is paperwork. I want to avoid that.

    I had thought about applying for a couple of panels, more or less as advertising and possibly for a few referrals. Maybe being on a couple or three panels may make me appear more “mainstream” when folks look at my website or my psychologytoday profile.

    P.S. Everyone should pay the $30 a month to be listed on the Psychology therapy registry. I have gotten multiple referrals from them. Very well worth the money.


    • Allen, I’ve had that same voice saying “You have to get the treatment plan done today” in my agency work. And, still I believe that my stints in agencies and psych hospitals (and, for that matter, probation) were the best training grounds in the world. The supervision and clinical experiences were priceless. But so were the things I learned about the administrative and business sides of mental health. I didn’t welcome all those opportunities for learning at the time but 20 years later . . . PRICELESS!

      I, too, have had good success for Psychology Today’s website. It’s a hefty fee but one client / year pays for itself. Thanks for speaking up about this online directory.

  6. I moved into full private practice several years ago.I believed that the way to do it was to get on panels, and I am happy to serve low-income clients. More and more, colleagues have removed themselves from panels, and report a great sense of freedom. The billing, hassles and so forth are difficult, but I believed I could not build a practice without the companies. What a bind. I am an experienced clinician with several niche areas that come from decades of work, and I can
    t tell if clients are calling me because of my quality of work or reputation, or because I am listed with their insurance company. I am torn because I have to work more clinical hours for less money, leaving no time to explore teaching and writing.
    I do have a billing person who does most of that work, but all the hassles of payspan just serve to confuse me.

    I would love to loosen the dependence onthe big companies. I have thought of announcing to all my current clients what my rate is, and how to apply for a decreased fee. I may lose some, but would it be better for me, and actualy improve the quality of care that I give? Thoughts?

    • Hi, Rivkah! I’m so glad you dropped in to chat today.

      I absolutely have thoughts about how to wean yourself off of managed care and transition to a cash-only practice. When I did it, I was terrified that I would starve to death. Note that I didn’t starve to death. I didn’t even have to cut back on groceries.

      Now I talk with therapists every day who successfully make this transition and still choose to serve low-income clients. The difference between you and them is that they are you are likely half the money that they are for doing the same type of work.

      The short answer for this situation is to remember that it’s not all-or-nothing! You can let go of provider lists once at a time (rather than all at once); and, you can open up space on your schedule for cash-paying clients only. If you want to talk about this in more detail, Rivkah, you are welcome to hire me to walk you through this process 1:1. I’ve done it with others and I’m happy to do it with you, too!

      Either way, best wishes on your journey!

      Oh, I just noticed that you don’t have a little photo of you that shows up with your comments here (and on other blogs, too). They are called “gravatars.” Using a gravatar helps others get to know and trust you quicker.

      Here’s a link to a quick tutorial that shows you how to set up your own gravatar . (Don’t worry! It’s so easy that even I could do it and it’s absolutely FREE!)

  7. Good afternoon Tamara,

    I am a newly licensed PC working in a mental health clinical setting. It’s great for the time being so I can gain experience and obtain my LPCC. My goal however is to start a private practice within the next 5 years or so. The thought had crossed my mind to use a sliding scale instead of billing insurance. Is that something you would advise?



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