Insurance vs Cash Pay Private Practice | Pros and Cons of Each

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As promised, today we’re diving in to the pros and cons of being on insurance panels vs only accepting cash pay clients in private practice. In this video I’ll lay it all out so you can feel informed about making a decision as you get started in private practice.

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This video is geared for therapists of all kinds, including psychologists, MFTs, LPCCs, social workers, and others in the clinical counseling field.

Welcome to Private Practice Skills! I’m Dr. Marie Fang, psychologist in private practice. I post videos offering tools I learned the hard way about starting and growing private practice so that you don’t have to.

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This video is not intended as professional or legal advice. Be sure to seek the services of a professional if you are in need of them.

Last week I went into a little bit of a rant sharing my personal experience being on insurance panels. In summary, I didn’t like it. But exclusively accepting private pay clients is no walk in the park either. Let’s break each of these down into their pros and cons:

Insurance:Pros:
Get Busy Quickly
Don’t have to focus on Marketing
Don’t have to focus on Branding

Cons:
Lack of Control. (see whoever calls on your insurance panel)
Pay. (insurance doesn’t pay nearly as much and denies claims)
Wasted Time. (on hold with insurance)
Disrupted Therapy. (denied claims = expensive bill)
Stigmatization. (diagnosis required)

Solutions:
Get specialized training.
Employ someone to bill insurance.

I go into more depth on these pros and cons in last week’s video, so be sure to watch that one to hear more.

Private Pay:
Pros:
Work with clients you want to work with
Work less & get paid more.
Establish yourself as a specialist in your niche (carry influence locally)

Cons:
Marketing (this is a HUGE category requires lots of businesssavvy)
Have to build your brand and know your niche. (This takes work and self reflection in grounding yourself in a vision/passion)
Growth can be slow at first (while you get your name out there)

Solutions:
Get specialized training in business marketing
Make the transition slowly while working another job

It’s important to think through the pros and cons of each of these to decide what might work best for you. For me, the “cons” of private pay play to my strengths well and the cons of insurance were troublesome enough that they drove me crazy. The determining factor for me was realizing that I could see less than 10 clients per week and still earn more than I would seeing 30 or more clients per week on insurance panels. I do offer a sliding scale and see more than 10 per week, but we’ll save that topic for another video :)

I hope you found this video helpful as you decide whether to go through insurance or only accept private pay in your private practice. Be sure to do lots of research on this one it will pay off later! Until next time, from one therapist to another: I wish you well.