There are many benefits of being a “cash” or “out-of-pocket” client!
There are several important reasons why even clients with mental health insurance choose to be a cash-paying clients or to pay out of pocket (“cash-paying” term means that the client pays the psychologist directly for services provided but the payment can be made not only with cash but most providers accept check, credit and debit cards). The most important reasons for paying directly are:
Privacy & Control
When a client uses their insurance plan to pay for psychological services, their information (including diagnosis, treatment plan, progress notes, etc.) become part of a permanent record. It is true that HIPPA and privacy laws are intended to protect sensitive, private information. However, insurance companies have access to a client’s record. So for example, once a client is assigned a “diagnosis” (diagnoses tend to label individuals but are a “necessary” part of treatment and, especially, for insurance companies to process claims), this becomes part of your permanent medical record! Once a claim is presented on your behalf, all parties involved in processing this claim will have access to your information. Sometimes insurance companies request additional information (e.g. progress notes, treatment plan, etc.) as part of reviewing and approving coverage for an individual. Also, your diagnostic history, in this case, may follow you.
However, when you pay cash (out-of-pocket), the information provided and your record are only accessible to your psychologist, and, no one else! The notes, the treatment plan, etc. are kept by your psychologist and are only used to help you and do not have to be shared. This option provides the ultimate privacy protection.
Another important benefit is that you remain in control. In other words, by paying cash no third party (insurance company, or insurance employee) can decide on your length of treatment or what your treatment should be.
Most psychologists include cash-paying clients in their VIP/Concierge package. For the psychologist, a cash-paying client offers many advantages (e.g. not having to file and follow up on insurance claims). Because of these advantages, psychologists usually prioritize appointments with cash-paying clients. Thus, you don’t need to wait for backlog related to higher-volume, insurance clients. In addition, as part of the VIP/Concierge package, psychologists offer availability options that are usually not approved by insurance companies, such as, online/video conferencing sessions. Out-of-pocket clients are not “governed” by most of these restrictions, allowing the psychologist to be more responsive and flexible.
Deductibles and Copayments
Most insurance companies that offer mental health coverage require clients to meet a deductible that can run into thousands of dollars per year. What this means is that the client must pay out-of-pocket for services received until the deductible is fully met. If for example, a client has a $5,000 annual deductible, the client must accumulate paying professionals and providers this full amount by paying in full for the psychologist’s services.
After the deductible is met (or if there is no deductible), most plans also require a copayment per session that can range from zero to $100 or more. With all these out-pocket payments that have to be assumed by the client prior to being covered in some way, it makes sense for many insured clients to contract the professional of their choice (the one with the best reviews, referral recommendations, specialization, training, most professional approach, etc.). Also, in doing this, most insurance companies would also accept the cash payment to the psychologist as part of meeting their annual deductible.
It is clear that a cash-paying client enjoys multiple, significant benefits. One is privacy and the control that the client has over the records and information. Paying out-of-pocket offers the best privacy protection. Also, by paying directly, the client will enjoy improved availability to schedule sessions and, at the same time, have the advantage of choosing the “best match” and not being restricted by a list of providers that the insurance company allows. Finally, in many cases, depending on the coverage details of an insurance plan, the client is forced to cover a significant deductible and/or copayment amount that can instead be used to pick the psychologist of choice. In the end, you have choices!