Using Insurance

It can take considerable time and effort to understand the language and nuances of health insurance. In my experience as a practitioner, I have come to understand some technicalities that I will present here in case they might be useful to you.

What is the difference between in- and out-of-network providers?

The major difference between types of insurance plans are that they are HMO or PPO plans. HMO plans typically refer to insurance plans that typically only cover services provided by healthcare providers within their existing network. In-network healthcare providers have an explicit contract with these insurance companies to provide services to their members, although they might provide services elsewhere. PPO plans typically offer more flexibility with which healthcare providers members can receive reimbursement for and will often cover a portion of services received from out-of-network providers. Services with me are usually out-of-network and I provide “superbills” for my services.

What is a superbill?

A superbill is a statement I can provide you to seek reimbursement from your insurance provider. These are typically delivered monthly and therefore contain multiple sessions. When using insurance for my services, a superbill will allow you to demonstrate to your insurance provider that you have already paid for services with me. Assuming processing the superbill goes well, your insurance provider will then reimburse you according to your coverage.

What information is contained on superbills? Will I receive a mental health diagnosis? Are there unintended outcomes from this?

Usually insurance companies will only reimburse for sessions if you have a mental health diagnosis. This is important to note because the diagnosis becomes a part of your medical record. There are some unusual circumstances where a mental health diagnosis can create limitations in life (e.g., it used to be that you couldn't serve as an airforce pilot if you had an anxiety disorder), which is something to factor in about this decision. The other information superbills contain is the date of our session(s), the setting of our session(s) (e.g., in office or remote), and the cost you have paid to the session. They also contain basic contact information about you, as well as important details about my practice (e.g., my tax ID, NPI, etc.).

What is a CPT code?

A CPT code is a numeric identifier for the kind of service you have received. Common CPT codes for psychotherapy services are 90834 (oftentimes for a 45- or 50-minute session), or 90837 (oftentimes for a 60-minute session).

What does behavioral health mean?

Behavioral health is jargon for psychotherapy services and some other kinds of mental health services (e.g., applied behavioral analysis).

How much can I expect to receive in reimbursement?

To understand how much you will be reimbursed (and therefore whether it is "worth it" to get better insurance) is unfortunately not a straightforward process. In my experience, the amount that you'd be reimbursed for ongoing weekly therapy oftentimes "equals out" the cost of more expensive insurance. What I mean by this is that, assuming you will continue being in therapy, the reimbursement you will get from insurance for the sessions will negate the cost of having “better” (i.e., higher coverage) insurance. This does not apply in circumstances where your income would qualify you for Medi-Cal.

In my experience, understanding the actual amount you'd receive from reimbursement before purchasing insurance takes a phone call or two to the insurance company to understand benefits. You'll want to ask about the following:

• Is there a deductible you need to meet for out-of-network services before you will receive your benefit? A deductible would mean that you have to pay for a certain amount of services on your own before receiving any of your benefit. 

• How many sessions of CPT code 90834 can receive reimbursement per week?

• What is the benefit for mental health (often called behavioral health) services? This is usually a percentage of something, sometimes after a fee called "co-insurance." If there is co-insurance, what is it for this CPT code?

• What is the "allowed amount" for CPT code 90834 from the area code 90230?

What does allowed amount mean?

Allowed amount is a term insurance companies use for the “reasonable” amount they consider a healthcare service. Let's say that sessions with me cost $1000 and your benefit is 50% coverage of behavioral health. Your insurance company is not inclined to reimburse you 50% of $1000 for each session. Rather, they determine what a “reasonable” or "normative" amount for the service (identified by CPT code) would be. They call this the "allowed amount" and in my experience is oftentimes closer to $80-120. They will reimburse you for 50% of the allowed amount. So if the allowed amount is $80 and your benefit is 50%, you'll receive back $40 per session after you have hit any applicable deductible. The allowed amount is also what is counted towards hitting any deductible.

I have attempted to provide here information about using healthcare insurance towards psychotherapy services. However, this is not exhaustive. If you still have questions about how insurance might make therapy services affordable, I encourage you to contact me.