The Price of Healing: Demystifying Therapy Bills

You just met with a therapist for the first time. The session started off a bit awkwardly as the middle-aged woman with kind but sad eyes asked questions about your life, your family, and, most importantly, your goals for therapy. Initially hesitant, you pushed through your usual “everything is fine” facade. Although it felt uncomfortable, there was a release as you shared personal details that you typically keep hidden. It wasn't that your life problems were solved, but somehow just talking openly about them made you feel lighter... more free. You began to entertain the possibility that therapy might actually help and that happiness could be within reach.

As the session drew to a close, the therapist checked her watch. You thanked her and left the office feeling vulnerable, as if everyone could see that you had just opened up. Yet, oddly enough, you also felt empowered.

A few days later, you receive an email with a bill that reads:

90791: Psychiatric Diagnostic Evaluation - $270

Surely, there’s been a mistake! How could this be right? When you call the mental health center, no one can give you a clear answer. You have insurance, how could this happen? After navigating through multiple voices, someone finally explains, “Yes, we billed your insurance, but because you haven’t met your $5,000 deductible, you owe the full amount.” The voice assures you, “Once you spend another $3,250 toward your deductible, your insurance will cover therapy.”

Feeling like you’ve been punched in the gut, you hang up. There’s no way you can afford that sense of levity and freedom at over $200 an hour. You buy a self-help book and ghost the woman with kind but sad eyes.

This scenario highlights why I believe private practice is essential. Many large mental health agencies have massive amounts of overhead and also struggle with communication regarding the complexity of billing, often leading clients to avoid or discontinue therapy out of fear of incurring enormous bills. At San Luis Valley Psychotherapy Collective, we work hard to ensure that billing is straightforward, transparent, and ultimately affordable. In this blog, I want to validate the frustrations surrounding medical billing and introduce the options available for clients.

Understanding Therapy Billing Options

There are three primary options for billing therapy services. Below, I’ll discuss each in detail, highlighting their pros and cons. If you're considering therapy, I encourage you to reach out to me directly so we can evaluate your specific situation and find the best course of action together.

1. Private Pay / Sliding Scale

Private pay is the simplest and most confidential way to engage in therapy. This option allows you to avoid the complexities of insurance while ensuring that your sessions remain completely private. Most private practices offer a sliding scale based on income, making therapy more accessible. In this method, you are charged for the service at an agreed-upon rate.

Pros:

• Simplicity: No insurance paperwork; payment is made directly.

• Confidentiality: Therapy remains private without involvement from insurance companies.

• Flexibility: A sliding scale allows clients to choose a rate that fits their budget.

• Control Over Therapy: Both counselor and client have full control over the length of therapy and the type of modalities used, without insurance constraints or managed care restrictions.

Cons:

• Higher Out-of-Pocket Costs: Clients may incur greater expenses without insurance coverage.

• Limited Financial Assistance: Even with a sliding scale, some clients may find the costs challenging.

2. Private Pay with a Super Bill

Private pay with a Super Bill is a great option for clients who want to apply therapy costs toward their insurance deductible or out-of-pocket maximum, or for those who have out-of-network benefits. After each session, you pay for the service directly and are provided with a "Super Bill"—a detailed receipt you can submit to your insurance for reimbursement. This option offers greater flexibility in choosing a provider and can potentially ease financial burdens without relying entirely on insurance.

Pros:

• Reimbursement Potential: Clients may receive partial reimbursement from their insurance, helping to reduce overall therapy costs.

• Flexibility in Provider Choice: You can work with any therapist you choose, without having to worry about whether they are in-network with your insurance.

• Privacy Control: Since insurance companies are not directly involved, clients maintain more control over their privacy and treatment details.

Cons

• Upfront Payment: Clients must pay for sessions upfront and wait for reimbursement, which could be financially challenging.

• Submission Complexity: The process of submitting a Super Bill for reimbursement can feel daunting, especially during emotionally taxing times.

• Uncertain Reimbursement: There’s always the possibility that insurance may not reimburse any costs, leaving clients to cover the full expense of therapy.

3. Insurance

Using insurance for therapy can make treatment more affordable for many, but it comes with its own set of complexities. Here's how it works: You submit your insurance information through a secure client portal. Your benefits are verified, and you’ll receive an estimate of your co-pay and/or deductible. At the time of your session, your co-pay will be charged based on that estimate. After the session, the healthcare agency submits a claim to your insurance provider. You’ll then receive an Explanation of Benefits (EOB) outlining what was covered and any remaining balance you may owe. If there’s an outstanding balance, you’ll be responsible for paying the difference.

Pros:

• Lower Upfront Costs: Clients often only pay a co-pay at the time of service.

• Potential Coverage for More Sessions: Insurance coverage may facilitate ongoing support.

• Affordability: Depending on the benefits, therapy may be partially or completely covered, making it very affordable for clients.

Cons:

• Complexity and Confusion: The insurance process can be difficult to navigate, leaving clients overwhelmed.

• Privacy Concerns: Insurance companies may require detailed information about diagnoses and treatment, impacting confidentiality.

• Variable Coverage: Not all plans cover mental health services equally, leading to unexpected costs and limitations on the number of sessions.

• Delays and Back-and-Forth: Insurance billing can take time, with back-and-forth communication between the provider, client, and insurer, potentially delaying reimbursements or clarifications on coverage.

Important Terms for Insurance

1. Outpatient Mental Health Benefits - These are the specific services covered by your insurance plan for mental health care provided outside of a hospital setting. This typically includes therapy sessions, counseling, and psychological evaluations.

2. Deductible - This is the amount you must pay out-of-pocket for healthcare services before your insurance begins to cover its share. For example, if your deductible is $5,000, you need to pay that amount in full for covered services before your insurance kicks in.

3. Out-of-Pocket Maximum - This is the maximum amount you will have to pay for covered healthcare services in a plan year. Once you reach this amount, your insurance will cover 100% of eligible expenses for the rest of the year.

4. Co-Pay - A co-pay (or copayment) is a fixed amount you pay for a covered service at the time of the appointment. For example, you might have a $30 co-pay for each therapy session.

5. In-Network vs. Out-of-Network Providers - In-network providers are therapists and facilities that have agreements with your insurance company to provide services at reduced rates. Out-of-network providers are those not contracted with your insurance, which may result in higher costs for you.

6. Explanation of Benefits (EOB) - An EOB is a document sent by your insurance company after a claim is processed. It details what services were provided, what the insurance covered, what you owe, and why.

Billing Option	Cost	Privacy	Billing Transparency	Complexiety
Private Pay / Sliding Scale	$80-$100 w/ no insurance involvement	High Confidentiality	Simple and straightforward; payment made directly	Low; easy to understand and manage
Private Pay + Super Bill	Client pays upfront payment; potential for partial reimbursement.	Moderate; involves additional steps for reimbursement	Transparent receipt (Super Bill) provided for insurance submission	Moderate; involves additional steps for reimbursement
Insurance	Varies by plan; copays, deductibles, or coinsurance apply	Moderate to Low; insurance may review client therapy records.	Can be complex; may lead to unexpected costs and limitations	High; navigating insurance can be time consuming for both client and provider.

Final Thoughts

Navigating the financial aspects of therapy shouldn’t add to your stress. Therapist within SLV Psychotherapy Collective, we are committed to making the billing process as clear and manageable as possible. We recognize that billing transparency is a crucial part of building trust in the therapeutic relationship. Too often, this topic is avoided by therapists, leaving clients feeling uncertain or frustrated about the costs of care. If you’re considering therapy, let’s talk. Each member of SLV Psychotherapy Collective offer free initial consultations to discuss your needs and help you find a transparent, affordable path forward on your mental health journey.