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There are three ways to pay for psychotherapy. The first is out of your own pocket. Some people can afford this. There are also others who prefer to pay the full fee themselves because they do not trust insurance companies to keep the information confidential. (Insurance companies with both health and life insurance departments are prohibited by law from sharing information between them.) These payments are deductible (as well as travel expenses) as medical expenses on your income tax.
The second way to pay for psychotherapy is through your employer’s health insurance if they offer a plan called Point of Service. A Point of Service plan allows you to consult with any licensed professional. You do not have to see a provider on the insurance company’s panel. Many people prefer this plan because employers often change insurance companies (usually choosing the cheapest) and the doctor you see currently may not be on the panel of the new insurance company. In that case, you may be forced to decide whether to see the doctor who knows the most about you and whom you trust but pay for his services yourself, or drop him and see someone new.
In Point of Service you pay the provider directly and the insurance company reimburses you. The disadvantage of this plan is that it won’t reimburse you fully for the treatment. Point of Service plans typically have a deductible of anywhere from $100 and up. The exact amount depends upon the contract negotiated between your employer and the insurance company. It will only pay a certain percentage of your therapist’s fees. This is typically about 50%, but again it depends upon contractual arrangements. They may also specify a maximum number of sessions per year, and/or a maximum amount of money in benefits per year. Point of Service plans are usually generous here, certainly more so than in HMO’s. The money not reimbursed for psychotherapy can be deducted as a medical expense on your income tax. There are still a few Indemnity plans around. In this form of Point of Service (which is the most generous), the full fee is returned to you by the insurance company.
HMOs are the most restrictive plan offered today. They are also called Managed Care. (Critics call it Mangled Care.) There are many restrictions that must be negotiated in order to pay for psychotherapy.
- You must see a therapist on their panel.
- The therapist must get permission from the HMO in order to see you.
- The therapist will be given permission to see you for only a small number of sessions. This can be from one to five sessions.
- If more sessions are required, the therapist must submit a report about you to your Case Manager at the HMO. Reports, depending upon the HMO, may be over the phone, written or faxed, or via the Internet. The Case Manager then decides how many more sessions of therapy you will be granted. This will be anywhere from four to ten. Periodic reports are required in order to continue therapy. At some point the Case Manager will reject further requests for continued therapy, the exact number of sessions approved will depend upon the HMO.
Each time you see a therapist you make a co-payment, which may be anywhere from five to twenty-five dollars. It will be hard to find either patients or therapists who like HMOs. Therapists don’t like them for many reasons:
- Reimbursement is extremely low.
- Sometimes HMOs arbitrarily refuse to pay.
- Paper work time is very high.
- The time spent on the telephone contacting Case Managers (or anyone at all, for that matter) is long.
- The therapist must negotiate an obstacle course in order to satisfy the HMOs requirements for authorizing sessions.
- Case Managers are often people who are themselves unqualified as therapists, yet make decisions about the suitability of your therapy.
- Many therapists are extremely uncomfortable about discussing you and your problems with a voice over the telephone, or an anonymous Case Manager via fax, or worse yet, via the Internet. The question of confidentiality is obvious. But if the therapist refuses, the HMO will terminate payment for therapy.
Informed patients read about their employer’s Benefits package that specifies the regulations of its health plan. Under “Mental Health” the employee is informed about HMO benefits. With respect to psychotherapy, it states that you are entitled to a maximum number of sessions each year. They also state that you can use these sessions only if they are “medically necessary.” Patients assume incorrectly that their doctors are the ones to decide whether a treatment is medically necessary. In fact it is the Case Manager who decides medical necessity. This is true for all benefits in an HMO, from psychotherapy, to surgery for life-threatening conditions, even to the use of an Emergency Room.
Most HMOs state in your Benefits pamphlet that they will pay for up to 30 sessions a year. (The exact amount varies according to contract.) That’s the contracted rate between your employer and the HMO. Most HMOs will only allow you to use a certain number of those sessions, and rarely the full amount. What they will actually allow depends upon the profit margin required at that point, and this changes over time. But if they decide to terminate payment for your therapy, they won’t tell you. They inform the therapist who must then tell you. Many patients feel betrayed by this system when informed by their therapists that the HMO is stopping payment after, say, only ten sessions, when they were told they were entitled to 30 sessions. It’s not the therapist’s fault.
There are appeal procedures in every HMO. They sometimes work, but take time. Only your employer can make the HMO fulfill its contractual agreement.
Many therapists don’t accept HMOs at all. If you’re seeking a therapist ask if he/she accepts yours.
I accept the following HMOs:
- United Health Care
- Point of service any plan
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