Understanding the Impact of Using Insurance for Therapy
Your therapist is required to give you a mental health diagnosis in order to submit a claim to your insurance company for reimbursement. The diagnoses become part of your permanent medical and insurance records, and can be accessible by insurance companies or government agencies, which could impact future insurance benefits and job application requiring security clearance and healthcare checks. Consider how this may impact you in other aspects of life and in the long term.
Insurance companies put restrictions on what diagnostic codes they will pay for and which they won’t. They may also deny or limit the number of sessions covered. Insurance companies only provide coverage for services that meet “medical necessity criteria.” Therefore, sessions must focus on reduction of mental health symptoms, not self-improvement, personal growth, or supportive care.
You will lose some level of confidentiality and control when using your insurance to pay for therapy. Insurance company has permission to request your entire therapy records (e.g. diagnosis, treatment plan, and progress notes, etc.) from your therapist for auditing reasons. This information will be added to the insurance company's records. While insurance companies assure the confidentiality of this information, you cannot dictate its use once it is in their possession.
If being in charge of your own mental health care and keeping it confidential a priority for you, then paying out of pocket for therapy may be the best option.
You can consider putting funds into a Health Savings Account (HSA) or Flexible Spending Account (FSA) at the beginning of each year. This is tax-deductible money that you can use to pay for your therapy sessions. These accounts typically come in the form of a credit card.
No Surprises Act
Under the No Surprises Act implemented in January of 2022, health care providers are required to inform individuals who are not enrolled in a plan or coverage or a federal health care program, or not seeking to file a claim with their plan or coverage both orally and in writing.
You are entitled to receive a “Good Faith Estimate” of what the charges could be for psychotherapy services provided to you. While it is not possible for a counselor to know, in advance, how many psychotherapy sessions may be necessary or appropriate for a given person, the Good Faith Estimate provides an estimate of the cost of services provided. Your total cost of services will depend upon the number of psychotherapy sessions you attend, your individual circumstances, and the type and amount of services that are provided to you. This estimate is not a contract and does not obligate you to obtain any services, nor does it include any services rendered to you that are not identified.
If you are billed for more than the Good Faith Estimate, you have the right to dispute the bill.
For questions or more information about your right to a Good Faith Estimate or the dispute process, visit www.cms.gov/nosurprises or call CMS at 1-800-985-3059.