Difficulty getting your health insurance to cover talk therapy is a common problem. "Insurance companies put patients and psychotherapists in a catch-22 situation," says Frank H. Goldberg, PhD, chair of the New York State Psychological Association's insurance committee and a psychologist practicing in Manhattan and in New Rochelle, N.Y.
Patients in a catch-22
Although most insurance plans make 20 to 30 annual mental health visits available in their contracts with employers, they may deny coverage after approximately eight to 10 visits due to their determination of "medical necessity." The companies typically ask for an outpatient treatment report, or OTR, after several visits.
"If we state on the OTR that the patient is making progress, the company may deny further payment because the patient is getting better and treatment is no longer a 'medical necessity.' On the other hand, if we report that the patient is making little progress, the company often denies additional treatment because it doesn't seem to be doing any good," says Goldberg. The concept of "medical necessity" is particularly vexing for patients and therapists because health insurance companies can define it any way they like, and the definition often changes from year to year.
If the insurance company won't authorize payment for services or therapy sessions that you and your therapist think you need, your therapist is ethically obligated to call the insurance company on your behalf. The first person the therapist speaks with is usually a utilization reviewer or care coordinator. This person typically has no special mental health training and is unlikely to be much help. Your health-care provider should ask to speak to that person's supervisor who should be a "like professional," or another psychologist or doctor.
How to appeal for mental health coverage
If the request for services is still denied, you have a right to appeal. But listen carefully: According to the Mental Health Legal Advisors Committee, a state-funded advocacy group based in Boston, Mass., your therapist must tell the insurance company's utilization reviewer and doctor that he or she will not accept a denial of services or a reduction in services.
If your therapist does not insist on all the terms of the original request, you won't receive a denial, and you have no basis for appeal. The phone calls to the reviewer and doctor are not part of the appeal process. You must get a denial notice before you can start the appeal.
Once you get the denial notice, you must file an appeal in writing with the insurer. Include your name and policy number, detailed information about the service your therapist requested, the exact dates for which the service is requested, and reasons you think the insurance company should reverse its denial.
Should you pay out of pocket?
If you can afford it, your treatment can continue during this process. If the appeal is denied, you can continue treatment with your therapist, and the two of you negotiate the fee. Goldberg notes that the therapist cannot charge you more than what your insurer was paying if your approved sessions have been used up.
In other words, if the insurance company was paying $50 a visit and you made a $20 co-payment, you will now pay the entire $70. A therapist at a community mental health center may charge from $5 to $50 an hour, depending on your income and other medical expenses if you are not covered by insurance.
Private clinic fees are in the $50 to $100 range, and private therapists typically charge $60 to $125 an hour. Expect to pay a higher hourly rate for a psychiatrist or psychologist than for a social worker, psychiatric nurse, or counselor.