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How to maximize out-of-network insurance reimbursement for therapy

July 13, 2022

Therapy Coverage

Out-of-network reimbursement for therapy is confusing

Using insurance to help pay for mental healthcare can seem like a complicated and convoluted process. Piles of paperwork, along with secretive and vague insurance policies, make it difficult to understand what providers will cover. The process gets even more confusing when using out-of-network mental healthcare insurance. There are so many variations of out-of-network insurance, and each has their own set of requirements to achieve any type of coverage. Thankfully, Nirvana has built a service that allows clients to discover if they have mental health coverage, and if so, maximize the amount of coverage they can receive from their insurance company. 

Nirvana is in the unique position of being a liaison between mental health insurance companies, practices, providers, and clients. It allows us to provide clear and accurate information to assess the maximum amount of coverage a client can receive from their out-of-network provider, and the steps they need to meet in order to receive that coverage. We focus on helping therapists get paid appropriately for their services while ensuring that clients have the easiest road possible to accessing mental health services. The easier we make the process to pay for therapy, the more people are able to take advantage of these life-changing services.

Does insurance pay for therapy?

In short, insurance can help you pay for some of your therapy costs. Typically, insurance companies cover up to 80% of the cost of therapy for providers in their network but out-of-network providers receive less coverage. Although, the amount they cover varies on whether your therapist is in network or out-of-network, the agreed rate you have with your insurance plan, and if you properly fill out the required paperwork. Additionally, insurers are intentionally vague when it comes to disclosing exactly how much of a session will be covered. If you call an insurance company inquiring about coverage, you might get an answer like this: “This client’s plan will cover 40 percent of the allowable amount for therapy in your area after the deductible has been met.” 

Generally speaking, a client will come out-of-pocket to pay for their therapy session. Then, their therapist will issue a Superbill for them to submit to their insurance company for reimbursement. As straightforward as this may sound, problems arise when clients try to get reimbursed for out-of-network therapy. Companies have separate deductibles for out-of-network and in-network services. Meaning, if a client has met their deductible for in-network benefits, but not out-of-network benefits, there is a chance they won’t receive any reimbursement at all. 

The allowed amount of coverage is either set specific to your insurance plan, or it’s based on the Usual, Customary, and Reasonable (UCR) rate, which is determined by a combination of the geographic location of service, the type of service, and sometimes the provider’s credentials. Most insurers use their own UCR tables or base their allowed amounts on a percentage of the Medicare reimbursement rate. For more resources to help you understand coverage, check out our blog post Understanding Your Client's Mental Health Insurance Benefits.

How to accept out-of-network insurance for therapy?

For therapists interested in accepting out-of-network insurance, the process can be somewhat complicated. As mentioned earlier, when a client has out-of-network insurance, they have to pay out of pocket for their sessions. Therapists will then fill out a Superbill, which essentially functions as a receipt of service, and give it to their client to send to their insurance company. If the bill is submitted correctly, the client should be reimbursed for a percentage of the costs of therapy based on their provider's rate.

There can be many hiccups in this process, such as an incorrect date or misspelled name, or if a client does not submit their Superbill within a certain amount of time. Any error, no matter how small, could result in a client waiting more than two months for reimbursement or receiving no reimbursement at all! This will not only lead to an upset client, but may force them to find another therapist with cheaper rates or give up therapy altogether. 

To make things simpler, Nirvana collects and organizes mental healthcare information and presents it in a way that’s easy to understand for both clients and therapists. For example, we offer an Out-of-Network Reimbursement Calculator that allows clients to estimate how much they will end up paying for therapy after maximizing their insurance coverage. This allows patients to fully know how much they will have to pay out of pocket before they begin therapy. It also gives therapists the option to establish a sliding scale rate method to help the financial needs of potential clients.

What is a W9 form and how does it relate to insurance?

In addition to filling out superbills for your clients, you may also need to fill out paperwork for the insurance companies before they will reimburse you or your clients.This process is called enrollment and it is the out-of-network equivalent to credentialing. 

Insurance companies may request a copy of a W-9 form from therapists because it is one of the simplest ways to get the information necessary to identify their practice as legitimate. Insurance companies can use the address information, name, classification and the identification number on the form to update their provider registries. 

If you've filed taxes before, then you are probably familiar with the W-9 form, which is officially known as the Request for Taxpayer Identification Number and Certification. This form helps the IRS mark each taxpayer with the proper identification number, linking either their Social Security number or Employer Identification to a location and name. 

Not all companies require a submission of a W-9 form to qualify a therapist. Usually, insurers will ask for the form if there is an issue with their records and they need additional verification of your identity. Receiving a request for a W-9 form from your insurance company does not mean that you are being suspected of fraud, or that your claim will be denied. In fact, some insurers update their records every year and may ask for a W-9 as standard practice to make sure their information is up to date. With Nirvana, therapists will have their enrollments taken care of so that claims don’t get denied.

How to bill for out-of-network mental health insurance?

Without Nirvana, a client will need to get a Superbill from their therapist, go find their insurance’s CMS 1800 form, fill it out, and mail it to them. Then they’ll need to wait patiently for their insurance company to read their mail, process it, and send them back a response, a process that can take up to 90 days. 

When processing Superbills for out-of-network therapy, insurance companies will change their rates based on whether the insurance is provided by the employer, Medicare, Medicaid, or the ACA Marketplace. This creates a lot of variety in how much a therapist or client can expect to be reimbursed for a session. Many people find themselves blindly submitting Superbills, unsure of how much money they’ll actually get back. Nirvana helps unravel this web, and show clients and therapists what rate their insurance company will use. 

However, when a therapist uses Nirvana, we automatically file forms on your behalf for out-of-network insurance providers. Nirvana’s technological infrastructure and ongoing relationships with insurance companies give the company the ability to automatically file claims on the same day of a therapy session. We are also able to provide transparency in every insurance claim that is processed. If a claim is filed electronically, the insurance company should acknowledge the receipt within 72 hours. Nirvana's system keeps an eye on the claim, and instantly shares when the insurer makes their decision. This allows both the therapist and the client to know whether the insurance company has covered the session and exactly how much was covered as soon as possible. 

How to get out-of-network claims paid?

Once an out-of-network claim has been filled, it is up to the insurance company to determine how much the client will be reimbursed. Most insurance companies claim to give back 130% of the amount one would receive from Medicare. However, the Medicare rate changes based on the zip code in which the service is rendered, also known as Metropolitan Statistical Area (MSA). Each MSA has a different Medicare rate, so it would require hours of research for one to figure out how much they will actually receive from their insurance provider. 

To help simplify this process, Nirvana will get the out-of-network claims paid on the client’s behalf. We determine the amount a client’s insurance company considers to be fair market value, and process what that coinsurance percentage will mean in real dollars. Our automated eligibility benefits, and claims-filing software helps therapists take care of their mental health insurance billing without interrupting the flow of their operations. 

Nirvana’s services range from insurance eligibility tracker, benefits verification, and rejected claims management, to provider enrollment services, data entry, and customer support. Therapists will have a new level of control over the finances of their business like never before, and they can direct their full attention on providing the vital mental health services to their clients. Want to learn more? Contact us now.