The Insurance Version of “Don’t Ask, Don’t Tell”:
The Perils of Private-Pay
By Barbara Griswold, LMFT
(June 9, 2012)
After paying full fee out-of-pocket for three months, a client surprises you by mentioning that she has insurance, and asks you to bill the plan for past sessions. You are a provider for her plan. Are you obligated to refund the client for all monies paid for those three months (other than the client’s copayments and deductibles)?
This question seems to be coming up more frequently in my recent consultations with therapists, who call in a panic, anxious to find out if they have to refund hundreds of dollars to clients who didn’t tell them about their coverage.
It’s a kind of “don’t ask, don’t tell.” When a client doesn’t mention insurance, you may understandably assume that she isn’t covered. But there are many reasons she may not tell you about insurance. She may be so distressed she forgets to mention it. She may have planned to come only for a few sessions, but as treatment costs mount she may look for ways to finance therapy. Or she may not have realized that her insurance covers therapy. And maybe you don’t ask because you really don’t want to hear the answer. If she doesn’t bring it up, why should you?
Is it really our responsibility to find out if clients have insurance? “We can’t grab their wallets out of their hands and look for an insurance card, and you’d like to think that they would let us know about coverage, but we need to ask,” says Susan Frager, owner of PsychAdministrative Services, a mental health billing service. “The bottom line is that it can blow up in your face if you don’t ask up front.”
And blow up it does. It breaks my heart how many panicked providers I have to tell the bad news: Yes, if you are a plan provider you agreed in your contract to charge all plan members only their copayment and any deductibles, and to bill the plan directly on the client’s behalf. The only time you are relieved of this obligation is when a client has specifically asked you not to bill her insurance. “From the standpoint of the insurance company, if a client wants to use her insurance, contracted providers need to accept it,” says Frager. Jeffrey Olson, a Network Manager at UBH/OptumHealth of California, agrees. “Any agreement entered into with a member that is in conflict with the provider agreement (as in this case) is considered not valid, and a member would need to be reimbursed if they later stated they have coverage,” he says. “This is one of our member protection provisions.”
So what do you do now? If you had never signed an insurance plan contract, you could just give your client an invoice/superbill for past sessions. However, since you are a plan provider, get out your calculator. Figure out what the client should have paid according to her coverage, refund the client the difference, and bill the plan for the sessions. You cannot negotiate some kind of settlement – you are limited to the terms of their coverage and your contract.
What if your claims are denied, due to lack of preauthorization, or because you missed the claims filing deadline? Many plans may require preauthorization, or have claim filing deadlines, so it is possible that the plan may deny your claim due to “lack of authorization” or “late filing.” If this happens, file an appeal, explaining the situation, and ask the plan to reconsider their denial.
And if the plan doesn’t pay? You may have to write this off as a loss, as contracts typically forbid billing the client if the plan doesn’t pay.
The good news? This sticky situation can be avoided with a few steps:
- No more “don’t ask, don’t tell.” At first contact, ask ALL clients – even self-pay clients – if they have ANY medical insurance.
- Contact the plan to check coverage. Get a copy of the front and back of the insurance card, but don’t trust the information on it. Network affiliations can be complicated, so you may be a plan provider when you think you are not.
- Have all self-pay clients sign a Self-Pay Agreement, where the client attests that s/he:
a) does not have insurance coverage,
b) has insurance coverage but chooses not to use it, and understands that in doing so s/he is waiving any right to reimbursement, or
c) has insurance coverage, but understands that your services are not covered by the plan.
The agreement should be signed by both client and provider, and should indicate the actual fee being paid by the member.
What if she actually told you initially she didn’t want to bill insurance, and then changed her mind? A previously signed Self-Pay Agreement protects you from the need to retroactively bill. Otherwise, “it’s your word against hers, and if she complains to the insurance plan, the plan will take the client’s side, because the client is their customer, and the therapist isn’t,” says Frager.
And here’s a twist that surprises most providers: Even though members may choose to waive their insurance, “providers can’t charge more than their contracted rate,” says Kevin Petersen, California Network Consultant at Anthem Blue Cross. “They’re still covered members. Some providers feel they can bill their out of network fee. This isn’t permitted.”
What if you told the client up front you only had private-pay slots available? Plan contracts do not allow you to say “I’m not taking insurance clients right now” unless you have notified the plan to hold referrals. Even if you do this, it is a breach of contract to tell a member that you only can see her as a private-pay client. You are only free to do this if the client has told you she does not want to use her coverage.
“There is a lot of functional disenrollment going on,” says Frager. “This is when a provider stays on a panel but doesn’t accept new clients from the plan. Providers are hedging their bets: They want cash-paying clients but they are afraid to quit panels because these are tough times, and they know that clients want to use their insurance.” But you can’t try to turn insurance members into private pay clients in this way – no matter how they were referred to you.
One last tip: Make sure you get competent consultation. When serving on the California Association of Marriage and Family Therapists’ Ethics Committee, I noticed many client complaints were filed after some kind of fee dispute. Besides ethics or licensing agency complaints, there can also be serious consequences from the plan when you don’t stick to your contract. “All it takes is one pissed off client complaining about you to the plan and the plan will come down on you like a ton of bricks,” says Frager.
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Barbara Griswold, LMFT, is the author of Navigating the Insurance Maze: The Therapist’s Complete Guide to Working with Insurance – And Whether You Should. To purchase the book or other resources for therapists, click here. Contact Barbara at firstname.lastname@example.org to get answers to your insurance questions.
Copyright 2008-, Barbara Griswold, LMFT. No part may be reproduced without written permission of the author.