What You Should Know About Using Insurance For Mental Health Benefits

by Cynthia M. Braden, MFT

Using insurance is great. You pay the premiums for the coverage, right? You want to use the benefits.

I’m going to let you know what happens when you use insurance for psychotherapy, That way you can make an informed decision about how you want to pay for your therapy.

​If you have a Security Clearance or are involved in a Custody Arrangement keep reading...

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If you choose to use the mental health benefits on your insurance plan, in order for your therapy to be covered, the first thing that happens is that the therapist is required to give you a diagnosis of a mental disorder. 

Any claim that is submitted to insurance must include a diagnosis. Other therapists may not tell you this, but if your insurance is being billed for psychotherapy, you have received a diagnosis of a mental disorder.

This diagnosis is transmitted to your insurance company, often via the therapist’s billing person, with your consent of course. To the best of my knowledge, all insurance companies require psychotherapy to be based on medical necessity which requires a diagnosis. 

Common diagnoses are mood disorders such as depression or anxiety. Adjustment disorders are also a common diagnosis and may follow a transition or crisis in a person’s life. This is not a bad thing... a normal part of being human... but employers might not see it that way. 
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If you choose the fee-for-service option with our office, you may bypass any concerns about hacking or leaking your data... because no data will exist. Your therapist is not required to give you a diagnosis or submit paperwork to anyone under the fee-for-service option. Your security clearance or personal confidentiality is most protected under the fee-for-service option. 

​Click here to see Fee-For Service Packages.

Most to Least Confidential Therapy Options:

1. Cash Payments - no invoice, no diagnosis, no electronic record
2. Checks
3. Credit Card or PayPal
4. Insurance with co-pay cash
5. Insurance with co-pay checks
6. Insurance with co-pay credit card

Future Background Checks and Security Clearances
Something you may want to consider is that your diagnosis of a mental disorder resides in a computer system somewhere. Could this affect you in a background check, employment or insurance matter in the future? 

The laws are very strict about keeping your personal health information confidential. However, whenever your information is recorded into a computer, guarded by a phalanx of insurance workers under a veil of misunderstood and constantly-changing laws, who can really imagine the possibilities?

I am particularly concerned about recent large-scale hacks, and have myself received a notice that my medical records were hacked. So, at this point, not much can be truly confidential when submitting claims to an insurance company, or even running things through a check or credit card. Be aware that I have heard of people's security clearance being affected. This is not to scare you, but I want to let you know.

Session Notes
​Notes from the sessions are not ordinarily released to an insurance company, your confidentiality is definitely protected in this way. However, insurance companies have certain rights to review files under particular circumstances they determine, and request additional information at their discretion. The basic information that is released in order for the session to be covered: details such as your name, birth date, address, diagnosis, dates of sessions and what type of session, for example initial session, individual therapy, family or couples therapy. 

Often, the therapist is also required to submit a treatment plan to the insurance company, and the client may be limited to a certain number of sessions or type of session. Many plans have a separate deductible for mental health coverage. 

Subpoenas
If you are involved in a situation where your therapy records could be subpoenaed by opposing counsel, such as lawsuits, divorces and custody proceedings, be aware that the cash option gives you the greatest confidentiality. Please discuss the nature of your situation with your therapist and counsel. Your therapist wants to protect your confidentiality and help you resolve situations, not create additional problems for you to deal with.

Carve Outs
Another surprising thing that sometimes happens, is that a different company from the one listed on your insurance card actually handles your mental health benefits. The mental health benefit is sometimes 'carved out' to another third party agency without mentioning it on the card.

For example, you may think that you have insurance through a certain plan, for example your card says Blue Cross or Aetna. Then when you visit a therapist who is a provider for Blue Cross or Aetna, you may find out that your mental health benefit is a 'carve out,' your therapist is not a member of the 'carve out,' and your sessions won't be covered. And your therapist may be as shocked as you are. 

By the time you get done dealing with all of this, you need even more therapy for the aggravation! 

If you choose the fee for service option, I don't give you a diagnosis. Your only file with a few notes is locked in my office. No one sees it. No employer or insurance company or investigator will know you went to therapy unless you tell them. For these reasons, clients desiring a higher level of confidentiality often choose the fee-for-service option. If you're not worried about a security clearance or other sensitive confidentiality issue, it may be worthwhile to use your mental health benefit.

For help using your insurance benefits with this office, please call or text Rosetta 424-202-1682 with your information. She will work with you to get the most out of your coverage.