Applying for a Credentialing Contract with Insurance Companies as a Private Practice Therapist, and What You Will Get Paid.

One cannot live off of copays alone. To get paid by insurance companies, you will need to apply for a credentialing contact.

What does credentialing or contracting with an insurance company mean?

Have you ever wondered why some providers accept your health insurance, and some don’t? Or why when you change health insurances you get assigned a new primary care physician or you need a new dentist? This is because not all providers have contracts with all insurance companies. Each provider makes a decision to apply for a contract with specific insurances. This is a legal, binding agreement that you are in-network with said insurance company, and if you see one of their clients, they are required to pay you for those services.

How do insurance companies set reimbursement rates?

You may be asking, why not apply to contact with every health insurance company just to make yourself available to all possible clients? There are two answers to this: it can be a lot of work to fill out applications and follow up with unresponsive health insurance companies; and not all health insurance companies reimburse at the same rate.

Wait, what? Yes, you read that correctly. Your reimbursement rate, what you get paid for your services, is set by the insurance company you are applying with, and it is not a one size fits all.

You may also be asking yourself, what is my reimbursement rate based off of? There is this little thing called the Medicare Reimbursement Rate, or Medicare Physician Fee schedule. Every year, the Center for Medicare and Medicaid Services updates their reimbursement rates for providers that work with their clients. These rates are higher than what you might expect (the current reimbursement rate for a standard 90837, or a 53 minute session, is $155.25). When you contract with an insurance company, your reimbursement rate will be a percentage off of the Medicare Reimbursement rate.

Most companies have offered me anywhere from 75-85% of the Medicare Reimbursement Rate. One company, whom I shall not name, only gives me 60%. So to break it down, I am providing the same services and getting paid vastly different amounts. Which companies will I work hard to maintain a clientele with, and keep my contract updated with, and which companies am I going to avoid?

The negotiation power of the health insurance company and the therapist

On the flip side of this, why would an insurance company want to partner with you? Are you a unique provider in any way? Are you located in a rural area that has an underserved population (that’s right, providers in large metropolitan areas aren’t paid as well as those working off the grid)? Do you speak more than one language fluently? Are you trained or certified in a needed speciality? And….I hate to say it… are you a dude in a primarily female dominated field (I absolutely hate that this is even an advantage)? These things can also impact the amount you are reimbursed from health insurance companies.

Don’t fret if you feel basic. When you first apply and receive a contract, it is normal and probably best to accept what is offered. But as time goes on, equipe yourself for a speciality or certification that your population needs. And after a year, you can always renegotiate your contact (more on that in another post). Many licensed therapists do not renegotiate their contracts, and the health insurance company likely won’t point out that they are getting paid less than the newbies around them. Also, how each health insurance company determines their reimbursement rates is a Gringott’s Wizarding Bank level secret. Some may have a blanket rate for all practitioners in your area, others calculate it using many formulas and spells; you will never find out what happens behind the scenes.

Time to apply for a contract with health insurance companies!

It is important to decide which insurance companies you want to form a contract with. Now you know that not all insurance companies are alike; some pay less than others for the same services. Also, some insurance companies take months and months to respond to your application. It is important to know which insurance companies future clientele may be using depending on your location. And it is important to apply to a few from the start so that you can beginning working as soon as you sign your first contract.

After your CAQH profile is complete, it is up to you to go onto each insurance company’s website, and find the application to join their network. If this is confusing, you can call the provider services hotline for each company, but I guarantee you this will also be on their website. These documents may be located on the home page, in the toolbar, or hidden deep in their Forms catacombs of the dark web. Search for “join network” “credentialing” or “contracting”. 

Once you acquire the appropriate form (make sure it is for Behavioral Health or whatever your speciality is!) It should be quick to fill out. Email or fax it depending on the directions given. You may need to include you W9 as well. 

How long does it take to get credentialed with a health insurance company?

And now you must wait. Each company has their own timeline; but most will email you their prompt on how to continue within the month. Some may take longer, even 3 to 6 months. You can call and pester them for an update, but it probably will not expedite the process. If you already have a specific client that you want to see, a Single Case Agreement is worth pursuing.

Three to six months is a long time to wait when you are eager to get your business up and running. There is a good chance that you will be approved by one insurance company faster than that, and you can begin sooner. In the meantime, keep yourself productive (get those CEU’s out of the way!). This is a game for the patient at heart. 

TL;DR

You need to apply for a credentialing contract with each health insurance company that you want to work with, this is how you become in-network.

Not all health insurances reimburse at the same rate. They base their payment schedule off of the Medicare Physician Fee Schedule, and you might get assigned a percentage off of that.

How unique or specialized of a therapist you are could impact how much you get paid.

Apply online at each health insurance company’s website. Search for “join network” “credentialing” or “contracting” to find the correct application form.