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Fee-for-Service vs. Insurance Reimbursement
Drawbacks of the Medical Model:
In the traditional medical model of treatment, a person goes to a doctor to diagnose and treat a specific problem or condition. This is also the model used in today's arena of managed care (MC) for mental/emotional concerns and conditions. It is ultimately up to the managed care company to decide what types of disorders are "medically necessary" and how much treatment they will pay for within a given subscriber plan. A diagnosis is given to the patient, entered into their records and noted on bills and other documents sent to the insurance company.
- Reduced Privacy
- Managed care (MC) insurance routinely require that a therapist assess the extent of a patient's problems to justify the "medical necessity" for treatment. They then authorize treatment sessions for a therapist to see you. The amount of detail required varies among insurance companies and authorization procedures, but generally require information about a patient's family and developmental history, past and current substance use/ abuse, marital and other relationships, a rating of current degree of functioning, and other information.
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- The contents of your medical and insurance record might be shared with others with whom you do not want it shared. You would typically be asked for such authorization when you apply for health, life, disability, accident, or long term care insurance. When you agree to disclosure of your medical records, you are allowing access to all of your records, including mental health diagnoses and treatment records. Based on your treatment for mental/emotional disorders, insurance companies may determine that you are not a good risk. They may refuse coverage altogether, exclude coverage for "pre-existing conditions", or charge you higher premiums.
- Reduced Freedom of Choice
- MC insurance plans require that you choose your mental health provider from an approved provider "panel" - a group of practitioners who have contracted with the company by agreeing to certain allowable fees, reporting requirements, and service standards. Using MC insurance restricts your choice of who you can see for service.
- Session Limits
- All MC insurance plans specify a maximum number of sessions they will allow per year. Sessions are authorized in blocks of anywhere from 4 to 9 at a time. A report on your progress must be sent to the company to justify further treatment. Customers/patients are not guaranteed the annual maximum number of sessions.
- MC Involvement in Treatment and Agenda Setting
- Third-party reimbursement also means 3rd party involvement in the patient-therapist relationship, the agenda that is set between them, and the course and limits of treatment.
Advantages of Fee-for-Service:
In response to the drawbacks of third party reimbursement, an increasing number of clients are paying for psychotherapy/ counseling services directly -- the way you pay for other services you use everyday.
- Increased Privacy
- Paying directly affords you the privacy of keeping your therapeutic concerns solely between you and your therapist. No paperwork or information needs to be transmitted to anyone else. There are no records over which you have no control.
- Freedom of Choice in Providers
- You are able to research and select the professional that best suits your concerns and your personality. Just as when you choose a lawyer or a car mechanic, the choice is totally up to you. You may want to seek out practitioners based on recommendations from friends or family, or a professional you've decided specializes in your specific concerns.
- Setting the Agenda and Direction of Therapy
- Fee-for-service puts the agenda and direction of the therapeutic relationship into your hands in conjunction with your therapist. Additionally, some life concerns don't fit into the medical diagnostic categories. Fee-for-service allows for greater exploration of issues without the constraints imposed by insurance guidelines for "medical necessity".
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The choice is yours. When looking for help, consider the information and decide which alternative best suits your situation and needs.
California License #PSY23691
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