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Understanding The Out-of-Network Insurance Reimbursement Process

People looking for mental healthcare will likely come across a large number of therapists who are willing to work with them. Although there are many mental health providers to choose from, their therapy can be expensive. One major factor that contributes to the cost of mental healthcare is whether the services are covered by a client’s insurance plan, and if their therapist is out-of-network from their provider.

What is out-of-network insurance?

Out-of-network insurance is used when a client receives mental health services from a therapist who is not in their insurance’s network or “panel”. This means the therapist has no contract or financial relationship with the insurer, and cannot accept their coverage. This usually results in clients having to pay for their therapy entirely out-of-pocket since their insurance cannot cover it. Some insurance plans offer coverage for out-of-network providers, but the client is normally responsible for paying more than they would with a therapist in their insurer’s network. 

Even though receiving out-of-network therapy can appear unfavorable, many clients end up in situations where getting that care is their best option. For example, people seeking specialized mental health care may only be able to find out-of-network therapists offering the service they need. There are also cases where clients who have already built a solid relationship with a therapist find out their insurance company removed them from their network, or the therapist has decided to terminate their contract. Instead of trying to find a new therapist to build a relationship with, the client may continue seeing their original therapist, making their care out-of-network.

Seeking help from a therapist that is out-of-network, and having to pay for therapy sessions out-of-pocket, is a situation many people can find themselves in. Thankfully, there are ways for people to get at least some of their money back through the out-of-network insurance reimbursement process.

What is out-of-network insurance reimbursement?

If an out-of-network therapist is the best option for an individual, then they will need to undergo the process of filing a claim or “superbill” for reimbursement to their insurance company. The client will complete a few steps alongside their therapists in reporting the costs, location, date, and other specifics of their session to the insurance provider. Then, the insurer will examine the information and determine if the client is eligible to receive any coverage for their therapy. If they are eligible and their deductible has been met, they will receive a reimbursement check for the amount of money determined by the insurer to cover their portion of the costs

How does the out-of-network insurance reimbursement process work?

The process for getting reimbursed for out-of-network mental health care can be confusing, especially when incorrect dates and misspelled names on forms can result in weeks of delays. However, there are a few steps every client can take to maximize their out-of-network insurance reimbursement:

1. Check the insurance plan's out-of-network coverage: There are many variations of out-of-network policies that insurance companies use, and each insurer has their own set of requirements that allow for coverage. Clients can find information on their out-of-network coverage by calling their insurance company, in the Summary of Benefits section of their member information packet, or sometimes on their insurer’s company website or mobile app. They should look for their out-of-network deductible, which signifies the amount of money a client has to pay before they are eligible for reimbursement. If the costs of out-of-network therapy do not reach the deductible, then the insurance company may not offer any reimbursement at all.

2. Gather necessary documentation: Insurance companies require specific documentation when accepting reimbursement for out-of-network claims. This may include a claim form and itemized receipts from the session, which should be provided by the mental health provider. Therapists can also issue a "Superbill” that functions as a receipt of service, containing important details about the services, diagnoses, and other codes from the therapy session. Superbills can be auto-generated by the therapist’s practice management software (EHR) or requested manually by the client.

3. Submit a claim: Once they have all the necessary documentation, clients can submit a claim to their insurance company. This is typically done online or through the mail. 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. People should also make copies of all submitted documents and communication with the insurance company for their own records.

4. Wait for a decision: After the client submits their claim, the insurance company will review it and decide how much of the cost they’ll reimburse. This is a fairly long process that can take as long as 90 days. In addition, any incorrect date, misspelled detail, or missing code can result in even more weeks of delays, so it is important to be diligent and patient when completing claim forms.

5. Appeal if necessary: If the insurance company does not cover the amount requested, or outright denies it, the client has a right to appeal their decision. They’ll need to provide additional documentation to support the appeal, such as letters from a healthcare provider explaining the medical necessity of the services received.

What factors can impact out-of-network insurance reimbursement?

Out-of-network reimbursement for mental health insurance treatment can be impacted by a variety of factors. Some include:

Insurance plan and policy: There is a large spectrum of insurance policies with a variety of reimbursement rates for out-of-network treatment. When processing out-of-network claims, insurance companies can change their rates based on whether the policy is provided by an employer, Medicare, Medicaid, or the ACA Marketplace. Some policies provide full reimbursement for out-of-network services, while others may only cover a portion of the cost. Generally speaking, out-of-network services are subject to a higher deductible and maximum out-of-pocket limit than services that are in an insurance company’s network, as insurers like to incentivize utilizing in-network providers as often as possible.

Place of Service: Therapists use service codes when submitting paperwork to insurance companies to indicate the setting of the therapy. Insurance companies use these codes to determine the level of reimbursement a client will receive, since different settings of a session can result in different rates used for reimbursement. For example, some plans will cover teletherapy or in-home therapy, while some may not. Therapists need to be aware of these service codes because using an incorrect one in a claim can lead to their client receiving a lower reimbursement, or none at all.

Therapist location: Reimbursement rates may also vary depending on the location of the therapist's practice. Most insurance companies claim to give back 130% of the amount that is given through Medicare. However, the Medicare rate changes based on the zip code of the area in which the therapy takes place, which is known as the Metropolitan Statistical Area (MSA). Each MSA has a different Medicare rate, so there is a variety in reimbursement rates throughout the country. Usually, therapists in urban areas tend to receive higher reimbursement rates than those in rural areas. Someone receiving mental healthcare in New York City can reasonably expect a higher reimbursement rate than a person in rural Ohio. 

Type of service: Another factor that can impact out-of-network reimbursement is the type of service a client receives from their therapists. Different types of mental health care can have different reimbursement rates. For example, individual therapy tends to have higher reimbursement rates than group therapy. Therapists should understand the impact that each mental health service has on reimbursement rates, and communicate this information to their clients.

Provider network: As mentioned earlier, insurance companies have their own network of therapists they are under contract with. Seeking therapists within their network will normally result in higher reimbursement rates, and not having to pay directly out-of-pocket to pay for therapy sessions. Some companies even have a preferred provider network that include therapists who agree to provide services at a discounted rate. It is important to note that out-of-network doctors can bill at whatever rate they choose, which is usually higher than what insurers pay, so finding a therapist within a provider’s preferred network will most likely lead to a lower upfront cost for the client. 

How Nirvana simplifies the Out-of-Network Insurance Reimbursement Process

Nirvana offers tools that allow clients and therapists to better understand the costs that are associated with mental healthcare. These include insurance eligibility trackers, benefit verifications, a cost of care calculator, and rigorous customer support.

Nirvana’s Out-of-Network Reimbursement Calculator lets therapists and clients know approximately how much they can get back in reimbursement and how many sessions with their therapist they will have to submit a claim for before they can be reimbursed. The Calculator is an easy and low-cost way for practices to help clients complete step 1 of the out-of-network reimbursement process, Check the insurance plan's out-of-network coverage.

Being able to confidently navigate the reimbursement process for services that are in-network and out-of-network, will allow clients and therapists to direct all their focus on getting the most out of therapy. If you are a therapist interested in learning more about Nirvana’s products and how they can accomplish this, check out our website or send us an email at