Pros and Cons of Getting Credentialed and Joining Insurance Panels

Wondering about insurance panels for therapists?

In this article, we’ll focus on what insurance panels are, what the pros and cons are for therapists accepting insurance, how to get paneled or credentialed, and more.

We’ll also share the steps to become an in-network provider through “insurance paneling,” which is also called “credentialing.”

When therapists get credentialed to join an insurance panel they can accept insurance payments on behalf of clients covered by that particular health insurance plan. 

Should therapists accept insurance?

When establishing and running a private practice, every therapist, counselor, or clinician must consider whether or not to accept insurance (as in in-network, credentialed, aka paneled provider), to submit insurance claims or provide superbills as an out-of-network provider, or to only accept self-pay clients.

Accepting insurance can have many benefits including increasing access to mental health care and increasing opportunities to attract and serve more clients and diversify the populations served.

For private practice clinicians, accepting insurance as an in-network provider for clients with that particular health insurance can also require significant time and energy. First, you need to navigate joining an insurance panel, and then you’ll need to file claims to be reimbursed for sessions and services you provide.

Therapists who want to accept insurance have two options

1. Get credentialed to join an insurance panel

Therapists who wish to receive direct reimbursements from a particular insurance company can choose to apply to get credentialed and join that insurer’s preferred provider panel.

The panel application process is somewhat involved, and approval can take several months.

Once the therapist is approved for a panel, the insurer pays the therapist for their services directly.

2. Choose to be an out-of-network provider

Therapists who are out-of-network providers can choose to provide superbills to clients, so that the clients can submit them for reimbursement from their health insurance provider.

Out-of-network providers typically bill clients directly, and then it becomes the clients’ responsibility to seek reimbursement from their insurers. 

If you wish to receive direct reimbursements from insurance payers, you’ll need to decide whether to apply to be credentialed on one or more health insurance company payer panels.

What are insurance panels or payer panels?

A payer panel is a group of healthcare practitioners who work with an insurance company to provide services to clients and patients enrolled with that particular health insurance company.

Every insurance company operates its own panel.  Consumers and clients who are covered by a particular health insurance company are entitled to seek the health and mental health services and treatments covered under their plan from practitioners credentialed on that insurer’s payer panel.

The pros and cons of joining health insurance panels

There are potential benefits and drawbacks for all practitioners in private practice to consider with regard to getting credentialed and joining a health insurer’s payer panel. 

Dylan O’Hare, a medical billing health tech expert with more than 10 years of experience as a medical biller specializing in mental health, says this may be one of the most important decisions any private practice clinician will make. 

“Of course, there’s no right or wrong answer to this question,” O’Hare adds. “And, as a small business owner, you may want to make the decision based on what will help you achieve your goals and generate—and sustain—your revenue goals.”

Benefits of joining a payer panel

First, let’s look at the potential positive aspects of joining a payer panel. 

One of the most significant benefits of joining an insurance panel is that it opens therapists and practitioners up to a wider pool of potential clients, and it makes therapy more widely available to those clients.

As of November 2022, the majority of Americans (63%) were living paycheck to paycheck according to a monthly report by LendingClub as reported by CNBC.  Many Americans benefit from healthcare coverage under the Affordable Care Act and are unable to afford to pay out-of-pocket for mental health services such as therapy.

Some clients prefer to use insurance to mitigate their out-of-pocket costs.  

Other benefits include free visibility on the health insurance provider website and directory and a smooth cash flow, says O’Hare. 

Health insurance companies tend to have predictable turnaround times—often within 30 days—for paying claims to providers. This can make it easier to plan ahead and budget for your practice.

Disadvantages of joining an insurance panel

On the flip side, getting credentialed and joining an insurance panel means you won’t receive reimbursement unless you submit claims with accurate medical codes. 

This can require your time and attention, which are likely already in high demand. 

Time spent billing payers to recoup payments is time you could instead spend seeing clients. 

Robust HIPAA-compliant billing software such as the options included SimplePractice EHR practice management software, helps maximize efficiency, however you’ll still need to address denials and respond to payer audits. 

“You’ll likely have to see fewer clients every week if you want to stay on top of insurance reimbursements,” O’Hare says.

According to O’Hare, if the idea of adding non-billable hours to your workweek isn’t ideal, you could consider hiring a biller or administrative assistant to join your practice. This can be costly, though, he adds, as you’ve got to find someone you trust because you’re essentially putting your financial success in this individual’s hands.

Another option is to outsource the billing to avoid overhead costs.

When it comes to the involved process of applying to join an insurance payer panel, keep in mind that it often takes health insurance payers several months to decide whether they’ll accept new practitioners onto their panel. 

If the town, city, or geographic area you practice in is saturated with therapists, insurance payers tend to be selective and choose only the most experienced practitioners.  Payers also periodically close their panels to new providers. 

“You could find yourself in a situation where you fill out all of the paperwork and wait a couple of weeks only to find out that the panel has closed or was already closed,” says O’Hare.

Inquiring whether the panel is open—and applying as quickly as possible—is crucial.

The pros and cons of self-pay

One of the biggest advantages of choosing to do self-pay and not accepting insurance is eliminating the administrative time costs related to billing and appealing denials, says O’Hare. 

Therapists who choose the self-pay option, don’t need to submit any insurance claims for payment.  This means, with self-pay, therapists—not insurers—decide whether and how often to see patients. 

Private practitioners who go with self-pay are not bound by the need to obtain prior authorization or meet an insurer’s sometimes stringent documentation requirements. They also avoid potential insurance payer audits and recoupments.

Another benefit for private practitioners who choose self-pay is that they are not restricted to an insurance payer’s contracted reimbursement rate.  This means they can charge self-pay clients more than what insurance payers would reimburse for while also offering a sliding scale session cost for clients with financial hardship and need.  

“With self-pay, practitioners are empowered to charge what they’re worth without any of the headaches that come along with insurance billing,” says O’Hare. “You also avoid awkward conversations with clients about their insurance payer denials that can inhibit progress in therapy.”

One disadvantage to self-pay is that you may find it more difficult to attract clients who are willing or able to pay out-of-pocket for therapy.

You may also need to invest more in marketing your practice, including getting your practice listed on a directory such as the Monarch Directory from SimplePractice (here’s how to sign-up–it’s free for practitioners on the SimplePractice platform) and creating a website for your practice.

It isn’t always an ‘all-or-nothing’ decision

Some therapists may choose to primarily target self-pay clients but also participate with a single insurance payer. 

“Some practitioners may accept one particular insurance plan in the area because they’re happy with the reimbursement rates,” says O’Hare. 

Other practitioners become credentialed to join an insurance panel initially to grow their practice, but may later, over time, decide to drop some or all panels due to low reimbursement rates or low client volumes, he adds.

Still others practitioners don’t accept insurance, but they are willing to provide a superbill to clients so that patients can bill their insurance directly. 

Some provide courtesy billing, meaning they file insurance claims to payers so the client receives reimbursement. 

In both scenarios, clients are responsible for the session fee, however, they may be able to take advantage of their health insurance’s out-of-network benefits to pay for a portion of the visit. 

These benefits sometimes offset the cost of the visits, allowing patients to stay in treatment longer.

How to choose which insurance panels to get credentialed with

If you decide to become credentialed with insurance panels, applying to join every insurance payer panel isn’t the most sensible option, it makes more sense to take a strategic approach to selecting which insurance company or companies to panel with. 

For example, in regional areas saturated with providers, getting credentialed and paneled with a particular insurance company may help you stand out to new clients in a competitive market—especially if you’re the only therapist in your area who accepts a particular insurance plan. 

8 questions for practitioners to consider 

1.What is the insurer’s market share in your town, city, or state?

For example, which health insurance provider is offered to employees by the largest employers in your area? You may wish to prioritize getting credentialed with these insurance payers because their enrollees are your potential clients.

2. Do you focus on older client populations?

If you specialize in aging and geriatric mental health, you may wish to consider applying to become a Medicare provider.

3. Do you focus on children and/or client populations including people with limited financial means?

If so, you may wish to apply to become a Medicaid provider in your state.

4. Is the insurance panel open to accepting new providers?

If the answer is no, you’ll need to move on—at least temporarily.

5. What are the credentialing requirements for the insurance company’s provider panel, and do you satisfy them?

If not, how difficult and what is the cost for you to meet these requirements?

6. What’s the insurance company’s contracted reimbursement rate?

How does it compare with the Medicare fee schedule? Ideally, you want to receive a reimbursement that is at least 100% of the amount Medicare would pay. By participating with insurance payers who reimburse below the Medicare rate, you may miss out on the opportunity to fill those appointment slots with self-pay clients or clients whose insurance payers reimburse at higher rates for that same session.

7. Are there requirements and restrictions to receiving reimbursement from the insurance payer?

Some insurance payer restrictions include requiring pre-authorization before a service. Additionally some insurance companies have rules about the session lengths they’ll reimburse for and how many sessions they will reimburse for a client each day or each week. Insurance companies also often have a maximum number of sessions or treatments that they will reimburse overall for a specific client. It’s possible that a client’s mental health support needs may exceed the services the insurer is willing to reimburse the practitioner for.

8. How easy will it be to work with the insurance payer?

For example, what’s the quality of the payer’s provider relations? Is it easy to reach the payer, and are staff knowledgeable and friendly? What are the payer’s documentation and prior authorization requirements? Is it an onerous process to get approval? Does the payer continually limit the number of sessions? Consider asking other local therapists for input and feedback.

9. Should I be concerned about client deductibles?

Most insurance companies have different tiers for coverage plans with a range of deductibles. You may want to familiarize yourself with the specific plans (including high deductible plans) that particular health insurance companies offer.

How SimplePractice Simplifies Insurance Claims and Billing

SimplePractice is HIPAA-compliant practice management software for therapists that can streamline the administrative aspects of running your private practice—so you free up more time for the things that matter most to you. 

With SimplePractice, you’ll simplify your insurance claims. Enrolling, accepting, and processing insurance become so easy, you’ll actually want to accept insurance.

Create, submit, track, and reconcile claims all in one place—no more spreadsheets, separate logins, or ledgers. Automate your insurance accounting with integrated payment reports (ERAs) for easier, more accurate bookkeeping.

Sign up for a free, 30-day trial of SimplePractice. No credit card required.

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