Mental health credentialing with insurance companies
Mental health credentialing is a process that offers therapists both opportunities and challenges. Still, becoming insured is one of many therapists' top priorities. Let's look at all that provider credentialing entails and ask the most critical question: Is it worth it?
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What is the mental health credentialing process?
Mental health credentialing means going through the process of becoming a member of an insurance panel. The ultimate goal is to be listed as an in-network therapist by a specific insurance company. Unfortunately, you can't apply to one place and be credentialed with every insurance company simultaneously. You have to apply to be credentialed on each insurance panel separately. For example, if you become credentialed with Blue Cross/Blue Shield, you must still apply to be part of Universal Healthcare.
HMO vs. PPO
Insurance plans fall under two main designations: the HMO (Health Maintenance Organization) and the PPO (Preferred Provider Organization). If you are part of an HMO, you must choose an in-network provider or pay for it independently. People with HMOs also need to meet a deductible to receive total reimbursements. That means that until the deductible is met, the client is responsible for the costs, which is valuable information for a therapist who wants payment for their services.
A PPO offers clients more flexibility. In many cases, clients can choose their provider, and insurance will cover the costs, meaning that a therapist might be reimbursed at a higher rate for a client with a PPO versus an HMO.
However, PPOs are becoming more restrictive. It is not uncommon for a PPO to pay therapists at the same rate as someone with an HMO. You may have to apply for an HMO and PPO plan separately as a provider. For example, you could be accepted as part of a company's PPO but not with their HMO. HMOs tend to be more competitive for therapists, and their panels close more quickly.
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What is the purpose of mental health credentialing?
Mental health credentialing opens up a whole source of clients to a therapist. While some people can afford to pay for a therapist out-of-pocket, most need insurance to afford the costs. For instance, if you live in a working-class area, the community relies on insurance. Only some people are going to be willing to pay the total price. When you get on an insurance panel, every person who has that insurance will see you listed as a possible therapist in their directory.
Mental health credentialing also allows you a certain flexibility. If you switch jobs, your mental health credentialing follows you. It is a resource you can depend upon, no matter the situation you find yourself in.
Credentialing process for mental health providers
The process of getting credentialed can take time and effort. Here are the basic steps:
1. Get organized. You will need to provide much information to get on insurance panels, including:
- A current license in the state you are practicing
- Proof of Liability Insurance
- NPI Number – or National Provider Identifier, a provision of HIPAA used to identify medical providers
- Current resume or CV, including employment history for the past five years
- Specific panels may require a letter of intent
- Proof of any special certifications or qualifications
- Tax ID Number– You should get an Employer Identification Number (EIN). If you have employees in your practice, this is necessary. And, even if you are a solo practitioner, having a Tax ID number that is not your Social Security Number can be helpful in your practice. You can apply for this free online through the IRS website.
- Professional references
- Some panels may want a copy of your graduate school transcript
- Complete the application process for the CAQH Proview. The Council for Affordable Quality Healthcare (CAQH) runs a national database that most insurance companies use for mental health credentialing. It collects pertinent information and requires therapists to keep it up to date quarterly. Insurance companies use it to ensure providers have the proper mental health credentialing to be part of their insurance panels. You can submit a paper application but don't. It is much easier to apply online.
2. Decide which insurance companies you want to join. Some questions to ask yourself include:
- What insurance is prevalent in your area of practice?
- Are they reputable? If you do all the work required to get on an insurance panel, you want to ensure the company attracts customers, stays in business, and reimburses you on time. This is more likely with an established, reputable insurance company.
- What are the reimbursement rates for mental health services? Some insurance companies pay more than others for therapy, sometimes significantly more. Private insurance is likely to reimburse more than Medicaid. If you accept Medicaid, you must prepare to make less money for those clients. (More on that below.)
- How long do they take to approve applications? Some insurance companies take much longer to process mental health credentialing. Although that may not make a difference in the long term, it can have a considerable impact when starting and trying to attract a clientele.
3. Apply to each insurance panel that you want to join. Unfortunately, these are separate processes. You can find provider applications on their website and apply online.
4. Follow-up. After a week, it is vital to call the insurance company to see if they received your application and if they require any additional information. It is also good to keep checking to see where they are in the approval process. As they say, the squeaky wheel gets the oil.
5. If rejected, reapply. Well-known companies where there is an abundance of therapists may reject you. Insurance panels can fill up quickly and be very competitive. But keep hope. You can appeal your rejection. And if the appeal doesn't work, you should plan to reapply every several months. The capacity of these panels changes and people come and go. If at first you fail, try, try again.
6. Once an insurance company approves you, it is essential to read the contract carefully. Make sure you understand all parts of it. And, like any contract, parts of it may be negotiable. For instance, if you disagree with reimbursement rates, you can always attempt to ask for more money. Although this won't be successful initially, it is more likely if you have been on a panel for a long time and your rates have not increased. This is also an excellent time to familiarize yourself with contacting the right people and filing claims for each company.
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Common challenges of the mental health credentialing process
- It is time-consuming. Depending on the company, it can take months to get approved, even more if they require additional or missing data. That is not to mention the time it takes to get all the information together and apply for each panel.
- It is detailed. Applications with missing information result in returns, elongating the process. This is true for each insurance application and the CAQH.
- Insurance panels are competitive now more than ever. You are most likely to be approved if you offer qualities that other therapists lack.
These include:
- Speaking another language
- Working uncommon hours, including nights and weekends.
- Crisis services
- Offering a specific niche, such as working with eating-disordered clients, etc.
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A quick tip: A great way to learn about insurance is to ask other providers. Contact other therapists in the area who have already gone through the mental health credentialing process and benefit from their wisdom.
Mental health credentialing resources
Because the mental health credentialing process can be so long and confusing, considerable resources have popped up to help providers navigate the task.
Here is a sample of some places to go for help.
- The Facebook group, Insurance Billing and Credentialing for Mental Health Clinicians, hooks you up with other professionals who can help you with the complicated mental health credentialing process.
- On the Insurance Answers podcast, two therapists help you navigate the trials of the mental health credentialing and insurance world.
- If self-paced learning is more your speed, Mastering Insurance offers a comprehensive course that covers all the mental health credentialing topics you will ever need. Subjects include setting up your CAQH profile and applying for your NPI.
- Credentialing.com has a blog that offers information on every credentialing aspect you could ever want to know about. And—for a fee—they will do all your credentialing for you.
- Good therapy is a good resource for many topics in mental health. Its offerings include a free credentialing webinar.
- Some people like to get their information the old-fashioned way: from books. Starting Your Private Practice by Maryanne Duan is a step-by-step guide to starting a private practice, with a very useful chapter on insurance credentialing.
- Further, local and state professional organizations have contacts and listservs that can provide valuable information. Just google your state or regional psychological association for information.
- TheraPlatform’s academy for private practice owners offers a free insurance billing course that covers insurance credentialing, coding and more.
How does the Affordable Care Act impact therapists?
The Affordable Care Act (ACA)—also known as Obamacare—has had a positive effect on the world of mental health. The goal of the ACA was to expand healthcare coverage and make it more affordable and accessible, which has been the case with mental health services. Mental health was considered a fringe benefit not covered by many health plans. Now, it is an essential health benefit. As such, it must be treated like most physical health services. For example, insurance companies can no longer set higher deductibles or charge higher copayments for mental health care.
Additionally, the ACA requires health plans to cover some preventive care, including mental health care, free of charge to the client. The ACA also made it so medical history—including mental health history—could no longer be used against the client in the denial of insurance reimbursement. All in all, the ACA has lent a certain degree of legitimacy to mental health services, which only increases the likelihood that more of the population will attempt to use them.
Of course, the downside of popularity is that there is more competition. Specifically, now that almost everyone can use insurance for mental health services, more therapists will likely try to get credentialed. That means less room on insurance panels and more chances of rejection.
Is mental health credentialing important for professionals?
There are good reasons why many therapists don't accept insurance. Getting credentialed, filing claims, and making sure you get paid is tedious and time-consuming. In addition, accepting insurance means less money per client and possible payment delays. So, why do it?
Insurance panels are a built-in marketing tool, providing you access to thousands of clients with that insurance. And once you are part of a panel, that membership follows you, even if you leave your original job. It also opens your practice up to all populations, not just the wealthier clients who can pay out-of-pocket costs. Further, clients are more likely to continue in therapy for the long haul if they know their services are covered.
Although using insurance can be, to put it bluntly, a pain in the butt, it also reaps incredible benefits. If you want a diverse, built-in client base that is likely to stick around, it is worth the hassle of the mental health credentialing process.
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What are the expected reimbursement rates for different types of insurance?
Reimbursement rates for mental health providers vary across different insurance carriers. Let's delve into the specifics.
Commercial insurance: Commercial insurance encompasses privately owned health insurance plans various companies provide. Reimbursement rates for mental health providers under these plans are determined through negotiations between the insurance company and the provider. These rates vary greatly and depend on the insurer's fee schedule, market dynamics, and the provider's negotiating leverage.
Generally, reimbursement rates from commercial insurance plans surpass those from Medicare and Medicaid, typically ranging from 120% to 180% of Medicare rates for any given service. It's important to differentiate between Medicare Advantage plans and traditional Medicare, as accepting the former requires provider credentialing with the managing commercial insurance company.
Traditional Medicare: Medicare, a federal health insurance program primarily for individuals aged 65 and older or those with specific disabilities, like psychiatric disabilities, determines reimbursement rates for psychiatrists through the Centers for Medicare and Medicaid Services (CMS) using the Medicare Physician Fee Schedule (MPFS). These rates, which undergo annual adjustments based on geographic location, are generally moderate and non-negotiable. It's worth noting that Medicare Advantage plans, a type of commercial plan, operate separately from traditional Medicare.
Medicaid: Medicaid, a joint federal and state program offering health coverage for low-income individuals and families, sets its reimbursement rates for psychiatrists individually in each state. These rates typically fall below those of Medicare and commercial insurance due to Medicaid's focus on aiding financially disadvantaged populations. There can be significant discrepancies in reimbursement rates between states, with some offering supplemental payments or higher rates for specific services or underserved areas. Medicaid reimburses around 70% of Medicare rates for any given service.
TRICARE: TRICARE, the healthcare program for uniformed service members, retirees, and their families, establishes reimbursement rates for psychiatrists through the TRICARE Management Activity (TMA) under the Department of Defense (DoD). While TRICARE rates align with Medicare rates, slight variations may exist based on specific TRICARE regions or plans.
It's crucial to acknowledge that reimbursement rates may fluctuate based on factors such as the type of service provided, geographical location, billing codes utilized, and other variables.
Once credentialed, you will need to adjust your billing processes. One way to do that is through an EHR (Electronic Health Record) and practice management tool, which provides numerous benefits over paper processes.
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How EHR and practice management software can save you time with insurance billing for therapists
EHR with integrated billing software and a clearing house, such as TheraPlatform, offers significant advantages in creating an efficient insurance billing process. The key is minimizing the amount of time dedicated to developing, sending, and tracking medical claims through features such as automation and batching.
What are automation and batching?
- Automation refers to setting up software to perform tasks with limited human interaction.
- Batching or performing administrative tasks in blocks of time at once allows you to perform a task from a single entry point with less clicking.
Which billing and medical claim tasks can be automated and batched through billing software?
- Invoices: Create multiple invoices for multiple clients with a click or two of a button or set up auto-invoice creation, and the software will automatically create invoices for you at the preferred time. You can even have the system automatically send invoices to your clients.
- Credit card processing: Charge multiple clients with a click of a button or set up auto credit card billing, and the billing software will automatically charge the card (easier than swiping!)
- Email payment reminders: Never manually send another reminder email for payment again, or skip this altogether by enabling auto credit card charges.
- Automated claim creation and submission: Batch multiple claims with one button click or turn auto claim creation and submission on.
- Live claim validation: The system reviews each claim to catch any human errors before submission, saving you time and reducing rejected claims.
- Automated payment posting: Streamline posting procedures for paid medical claims with ERA. When insurance offers ERA, all their payments will post automatically on TheraPlatform's EHR.
- Tracking: Track payment and profits, including aging invoices, overdue invoices, transactions, billed services, service providers.
Utilizing billing software integrated with an EHR and practice management software can make storing and sharing billing and insurance easy and save providers time when it comes to insurance billing for therapists.
Resources
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More resources
- Therapy resources and worksheets
- Therapy private practice courses
- Ultimate teletherapy ebook
- The Ultimate Insurance Billing Guide for Therapists
- The Ultimate Guide to Starting a Private Therapy Practice
- Insurance billing 101
- Practice management tools
- Behavioral Health tools
