insurance, Uncategorized

In-Network Vs. Out-Of-Network Insurance for Therapy Services: What is the difference?

Working up the courage to call a therapist to schedule an appointment can be an overwhelming task. The last thing you need when you finally work up the courage to call is to find yourself lost in a series of questions about insurance benefits and coverage.

When the person you are calling starts asking about your plan, deductible, consumer benefits, coverage, and payer responsibilities, it can feel like they are speaking a different language! Even as a provider myself, I still get confused sometimes about what my insurance will or will not cover with my own plan, so I am here to try to break it down for you to understand.

Remember, however, that the best way to learn about your coverage is by contacting your insurance directly by the number located on the back of your insurance card.

Ok, are you ready to dive in? Here we go!

First of all, let me explain who the provider is and who is the payer.

In providing therapy services, the therapist is the provider and the client (that’s you) is the payer. When insurance is billed, someone is submitting a claim asking that insurance pays their part of the cost of the service provided. Sometimes is it up to the provider to bill the insurance, but sometimes it is the payer’s responsibility– don’t worry, I’ll get into that when I tell you about super-bills further down the page.

When billing an insurance company for services, all providers are either in-network, or out-of-network. 


If a provider (therapist, psychiatrist, doctor, etc.) is in-network, it means that the provider has signed a contract and agreement with the insurance company to provide services for them. This is sometimes referred to as “on the insurance panel” or “being paneled.” The insurance has agreed to pay the therapist a certain amount for each session they provide and the therapist bills the insurance company directly for payment.

If your individual insurance plan has a yearly deductible, you must first “meet your deductible” before insurance starts paying for services. This means that if your plan requires it, you may find yourself paying the full rate for the therapist’s services until you hit the amount of money required for your insurance to start paying. For example, if you have a $500 deductible, at the start of the year you would need to pay the full rate for services for the first $500 and then anything past that, your insurance coverage will begin.

After your insurance starts coverage, the client pays a certain amount per session, called a Co-pay, and insurance is billed for the remainder of the cost of service. Not everyone has a deductible, so it is important to contact your insurance and ask about your individual plan.

Out-of Network

If a provider is out-of-network, this means they are not contracted with your insurance agency. Some out-of-network providers choose to avoid contracting with insurance companies altogether and others may only select certain insurances they want to accept.

So, if you find a therapist you like, but they don’t take your insurance, can you still see them? Absolutely!

When a provider chooses to remain out-of-network they are considered a private-pay or cash-pay service . This provides the opportunity to offer services for any client who is interested in their service, regardless of their insurance plan.

Out-of-network providers can also offer clients the chance to use their insurance if their plan includes out-of-network benefits, and many insurance plans do.

To bill insurance when the provider is out-of-network, the provider (ex: the therapist) either bills the insurance directly for the client, or more commonly, the therapist provides their clients with a form called a “super-bill” that the client can provide their insurance to be reimbursed for their claim.

For example, if you wanted to use your out-of-network benefits, you would pay the full session fee out of pocket at the time of session and then I would provide you with a “super-bill” form to provide to your insurance for you to be reimbursed. What your insurance is willing to pay for your session with an out-of-network provider depends on your individual plan, so again, it is smart to call them to ask what will or will not be covered.

For example, if your insurance covers 60% for out-of-network providers, you would pay $120 at the time of session (my full session fee), then submit the super-bill to your insurance, and insurance would send you a check reimbursing you for 60% of that session. This means that your total out of pocket would be $48/session because insurance would be paying you back the other $72 that they are willing to cover after submitting the super-bill to them. 

$48(your responsibility)+$72 (insurance reimbursement that comes back to you)=$120 (total session fee)

Remember this is JUST AN EXAMPLE and you should call your insurance if you want to know exactly what your coverage looks like.

What is a super-bill and how do I submit it?

A super-bill is basically a receipt that your therapist provides you to show your insurance so that you can be paid back for the session. As mentioned above, the amount they pay you back depends on your plan, but the process of submitting the bill is the same.

Contact your insurance and ask where you submit a super-bill for reimbursement. There are some handy apps out there that can streamline the process such as Reimbursify .

Your super-bill is created by the provider and should include the following:

  • Provider’s name
  • Provider’s address
  • Provider’s phone number
  • Provider’s tax ID (EIN number)
  • Date-of-service
  • Amount charged
  • CPT code (procedure code)
  • ICD -10 code (diagnosis code)

What is the difference between a PPO and HMO plan?

HMO stands for Health Maintenance Organization and PPO stands for Preferred Provider Organization.

HMO’s offer more affordable plans, but often limit clients in who they can access services from. For example, if you have an HMO you cannot just go see any provider, you must make sure the person you see is in-network, otherwise they will not be covered by your insurance. Additionally, with an HMO you may need to see your primary care doctor first for a referral to access mental health services.

PPO’s may cost more for the plan, however they allow clients more freedom to choose a provider who is either in-network, or out-of-network. This means that you have the option of seeing a specialist without needing a referral from your doctor. That’s one less step between you and starting therapy services. Some PPO plans offer great coverage for out-of-network services and clients are able to use their insurance even when the provider is not in their network.

Does Medi-Cal Have Out-of-Network Benefits?

As a provider in California, this is one of the most common questions I hear. And, the answer is “it depends.”

Covered California is a program that allows people to purchase any type of policy from their options. If the client has a policy that is a PPO plan and has out-of-network benefits, they can submit a super-bill for reimbursement. Some of the plans are PPO’s, others are HMO’s. It should state what plan you have directly on your insurance card.

In the majority of cases, Medi-cal acts as an HMO and will not reimburse unless it is an emergency. This is because if the client chooses someone in-network, Medi-Cal will cover services at NO-COST to the client. They will rarely cover any costs of a provider who is not in-network.

Drawbacks to Using Insurance:

Some insurance plans limit the number of sessions clients can attend and only cover specific mental health diagnoses for treatment. Insurance companies require “medical necessity” for clients to qualify for services. This means symptoms have to be severe enough to meet a qualifying mental health diagnosis and must be causing clinically significant impairments in client’s functioning.

Whoa, that’s confusing, right?!

What this means, is that in order for insurance to cover your mental health treatment you must:

1: Have severe enough symptoms to qualify for a mental health diagnosis.

2: Have your symptoms causing issues for you in some area of your daily life.

3. And have the diagnosis you qualify for be covered by your insurance plan.

For example, an insurance company may be willing to cover services for someone with Major Depressive Disorder, however they may not cover services for someone with very mild depression who does not meet full criteria for the diagnosis of Major Depressive Disorder.

(Disclaimer: There are other diagnoses out there for depression that you may or may not qualify for, but the point I am trying to get across is that if you do not qualify for a specific mental health disorder, your insurance may choose to not cover your services. Don’t let this think that you cannot get help for depression because YOU CAN!)

Sometimes people seek therapy services for other reasons such as personal growth when they are not experiencing any problems their daily life. There are many benefits to therapy as a preventative treatment and many find it helpful to participate in treatment as part of their self-care even when things are going pretty well in their life. Unfortunately, most insurance plans do not yet see the benefit to this, and therefore, they typically will not cover services in that situation.

These are just a few examples of the barriers to treatment insurance companies can create for clients and these reasons play a large factor in my decision to be an out-of-network provider.

Why Some People Choose to Not Use Their Insurance:

Some clients do not want to bill their insurance at all for services as they do not want their mental health issues recorded for a variety of reasons. For example, when clients are in the middle of a lawsuit or when they do not want any mental health conditions on their medical records they may choose to just do cash-pay services and avoid using their insurance altogether.

By not billing insurance, clients can pay directly for services and their insurance is not notified of their mental health diagnosis or of any services they are provided. It is the most confidential way to participate in mental health services as only you and your therapist will know you are in treatment.

What Questions Should I Ask My Insurance When I Call?

Because health insurance varies from plan to plan, it is important to call your insurance provider to learn about the extent and limits of your coverage for mental health before starting treatment.

Questions you should ask include:

·       What is my coverage for outpatient mental health services?

·       What is my yearly deductible, and has it been met yet?

·       What is the reimbursement rate for an out-of-network mental health provider?

·       How many therapy sessions are covered per calendar year?

·        Are there any limits to my coverage?

Dealing with insurance can be messy, but it does not have to be. Have your insurance card and list of questions ready before your call to ask about your plan. If there is something you do not understand, do not be afraid to ask your insurance provider and I’m sure they can help explain. You might be surprised to find out your coverage is better than you would think!

If you are interested in contacting Tailwinds Therapy directly for therapy services, you can reach me via call, text, or email. I’m happy to help! My number is 559-387-4367 and my email is

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