Navigating the Insurance Maze

The Therapist’s Complete Guide to Working with Insurance – And Whether You Should

with Barbara Griswold, LMFT

Barbara Griswold, LMFT

Navigating the Insurance Maze

The Therapist’s Complete Guide to Working with Insurance – And Whether You Should

with Barbara Griswold, LMFT

The Counseling Compact is Now ACTIVE! (Plus: Updates on Other Interstate Compacts)

An interstate compact is a contract between states that allows certain professionals licensed in a compact member state to practice in other compact member states, without the need for multiple licenses.

In the following article, we discuss the status of the major psychotherapy compacts, including the Counseling Compact (for licensed professional counselors), PSYPACT (for psychologists), and the Social Work Compact. We also discuss why Marriage and Family Therapists may never get one.

COUNSELING COMPACT

On September 30, 2025, the Counseling Compact became active for licensed professional counselors in Arizona and Minnesota. This marked the official launch of the Compact, marking a major milestone in improving access to counseling services across state lines.

Licensed professional counselors in these states may now apply for the “Privilege to Practice” across state lines in other member states that are live or as they become live, through the Compact Connect system.

Who can currently apply? As of 11/19/25 only Licensed Professional Counselors (LPCs) licensed by Arizona and who live in Arizona can apply for the privilege to practice in Minnesota, and Licensed Professional Clinical Counselors (LPCCs) licensed by Minnesota and who live in Minnesota can apply for the privilege to practice in Arizona.

What’s the progress elsewhere? 37 additional states and the District of Columbia are actively completing the steps needed to begin issuing and receiving privileges under the Counseling Compact. To find out the status of the Compact in your state, check out the map here. For more information and to apply, visit CounselingCompact.org.

SOCIAL WORK LICENSURE COMPACT

According to SWCompact.org, as of 11/19/25 this compact for social workers has been “enacted” in at least seven states and has reached activation status – however, multi-state licenses are not yet being issued, and the implementation process for the compact will take 12 to 24 months before multi-state licenses are able to be issued. You can view the status of this compact in your state here – but keep in mind that “enacted” does not mean you can apply for a license yet.

PSYPACT (PSYCHOLOGISTS)

This interstate compact allows for psychologists to practice in other member states. As of 1/10/26, PsyPact was active in 43 U.S. states and territories. In 2025, Hawaii, Massachusetts and New York introduced legislation; Only Alaska, California, Guam, Iowa, Louisiana, New Mexico, Oregon, Puerto Rico, and the Virgin Islands have taken no action toward inclusion. View the ever-changing status of state participation here. For more information, visit the official PSYPACT website.

MARRIAGE AND FAMILY THERAPISTS

MFTs do not have an interstate compact because the American Association for Marriage and Family Therapy (AAMFT) instead chose to pursue a “strategic portability” model. This approach works to pass a specific MFT model law in each state, to make it easier for MFTs to practice in different states. This was seen as a less expensive and more permanent solution.

To check out where a state stands in terms of license portability, check out AAMFT’s map here. For more on AAMFT’s choice click here; and their video here; also read Benjamin Caldwell’s analysis here.

WHY SOME STATES ARE RELUCTANT TO JOIN COMPACTS

A few stated concerns include:

  • Some state boards, such as California’s, have expressed concern that joining PSYPACT or another compact would give too much regulatory and disciplinary control to non-governmental, out-of-state entities.
  • The primary pathway into PSYPACT requires a psychology degree from a doctoral program accredited by the American Psychological Association (APA). This inherently discriminates against graduates from non-APA-accredited programs, even if they are fully licensed psychologists.
  • There is currently no mechanism to track where PSYPACT-authorized psychologists are practicing, which creates challenges in quantifying the number of providers within a specific state’s borders.
  • There is concern that an influx of out-of-state telehealth professionals could saturate the local market and diminish local income. A counter-argument noted by the Iowa Psychological Association is that if local psychologists focus on out-of-state patients, they may become less accessible to local residents.

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Barbara Griswold, LMFT

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Barbara Griswold, LMFT, is a private practice coach and the author of Navigating the Insurance Maze: The Therapist's Complete Guide to Working With Insurance – And Whether You Should, 10th edition. Check out Barbara's online catalog of helpful online courses, practice forms, and other therapist resources related to insurance, documentation, and running your therapy business here.