How I Left My Semi-Abusive Relationship with Insurance Panels: A Step-by-Step Guide for Therapists

Leaving insurance panels in my own private therapy practice was hands down one of the best decisions I’ve ever made. But at the time, it felt like that scene in Poltergeist where the mom is going into the cavernous dark closet to try and get Carol Ann back from the in-between world. OK, that’s dramatic, but it was still scary! All I knew was that I could not exist in that environment one second longer. I now coach other therapists who are wanting to make this change and take that leap — and it isn’t as scary as you might think it is. 

If you take insurance and you wish you didn’t, you know what I’m talking about. You understand the restrictions they put on you (90837s get you the side eye and maybe an audit…or several), the inexplicable denials, the insultingly low reimbursement rates that they can lower any time they want, and the clawbacks, ah, the clawbacks. It’s always nice to get a threatening letter from an insurance company saying that they are taking back money they paid you a year ago because they’ve decided those services weren’t necessary. I wish I was joking.

My Story and How I Decided to Finally Leave Insurance Panels as a Therapist

I can only speak to my experience and how I did it. This might not be the “by the book” way to disenroll, but it’s my story. 

I’d taken insurance in my practice since I started it, back around 2007. I got paneled with a bunch of insurances because I thought I had to — that’s just what you do. I was paneled at the community mental health agency I’d worked at so I got independently paneled and thought I was good to go. Ummmm, not quite. 

I went on like that for many many years, being sorta OK with getting a $20 copay and then maybe a $40 check from the insurance company IF they didn’t deny the claim or “lose” the claim or send it back saying it needed to be resubmitted…you know the drill. Over time I became more and more disenchanted with their “reviews” where someone from the insurance company would call me to quiz me about a client to determine if services were really necessary. You had to show the client was making some progress…but not too much progress or else they’d say services were no longer being covered. It was a ridiculous game and I never felt like my practice was truly mine, because ultimately the insurance companies called the shots and made the rules. 

The Day I Reached my Breaking Point and Decided to Leave Insurance Panels for my Own Mental Health

One day I received 2 EOB’s for 2 different clients. I’d submitted about 7 dates of service for each and all 14 sessions were denied. The insurance company said they didn’t think the services were necessary. I lost my shit. I sat down and wrote disenrollment letters to every single insurance company that very day and mailed them that afternoon. I was DONE! That was the straw. I was scared, but believed that whatever was on the other side of this journey HAD to be better than dealing with this crap. 

Over the next few weeks I got letters from each insurance company telling me what my official disenroll date would be. They picked the date, I was not able to choose it. So I made a list of all my clients, the date I’d be disenrolled from their insurance company, and the date I would have “the talk” with each of them letting them know the changes I was making in my practice. I was pretty sure every single one of them would leave.

My Clients’ Reactions Shocked Me - In the Best Possible Way!

I had so much anxiety leading up to that first talk. But, it went great! The client said something about being surprised that I was still taking insurance and what a nightmare that must be. Huh? I was expecting anger and outrage. Some of my clients were PROUD of me! Imagine! So I systematically talked to every single client and we discussed their options moving forward. We talked about what my private pay fee would be if they wanted to continue our work together, what it might look like to finish up the work, and whether they wanted a referral to another therapist in their insurance network. Some people decided to finish up, they’d done the bulk of the work they wanted to do. Some wanted to keep seeing an in-network provider and I helped get those clients set up with a new therapist. And a bunch of clients wanted to stay with me. Way more than I thought.

Leaving Insurance Panels Allowed Me to Make a Good Living as a Therapist Without Seeing a Ton of Clients

Here’s the thing. When I took insurance, it always felt like I was trying to see more and more clients — which I was, because the only way to make more money was to see more clients. And there are only so many hours in a day and only so many clients one can see in a week. It wasn’t until I left insurance that I realized I’d had the ability to make a good living all along and I was the one limiting myself. And, that I don’t need a ton of clients. I just need some really good fit clients who are willing and able to pay my fee. 

Oh, and I was disenrolled from my last insurance panel like 2 days before the pandemic shut the world down, so that was fun. I thought I’d made a colossal mistake and figured that was the end of my practice. That’s not what happened. I have raised my rates several times since then and now I see waaaay fewer clients and make waaaaay more money. I am more present in session, I am enjoying the work because I am not exhausted and burnt out. And I’m not resentful. I remember a client whose insurance paid peanuts and she was taking lavish vacations. And I felt resentful. Here I am working till 9 pm three nights a week and she’s traipsing across the globe. Now, it wasn’t her fault, but that didn’t matter — I felt resentful. And when insurance would clawback money, I would resent the client because I had done all those sessions for free. Again, not the clients fault, but emotions aren’t always logical. Resentment is insidious and that shit creeps into the therapy room. If you think it doesn’t, you’re kidding yourself. 

Making a Good Living as a Mental Health Practitioner and Helping People are not Mutually Exclusive

We have advanced degrees. We have thousands of hours of supervised clinical hours. We have paid our dues. We got into this field to help people. Making a good living and helping people are not mutually exclusive. Taking insurance comes at a high price for many therapists. You sacrifice your time, time with your family, your ability to make a decent living, and you surrender control of your practice to an insurance company. 

If you're tired of insurance panels controlling your therapy or mental health practice and you are ready to (re)claim your professional autonomy, let's talk about how to actually make the transition. 

Because seriously, you have worked too hard and come too far to have your every move dictated by an insurance company. The truth? You're not running a therapy practice when you're on insurance panels. You're running an insurance company's subcontracted treatment center. And that's some grade-A bullshit that needs to stop. 

And those insurance companies are not putting the needs of you or your clients first. They are trying to save money. That is their business. And if saving money means they pay you an offensively paltry reimbursement or they routinely deny claims hoping you’ll just give up, so be it. How much longer can you exist in a system like that?

The Reality of Leaving Insurance Panels as a Therapist or other Mental Health Provider: It’s Terrifying

Before we get into the how-to, let's address the fear that every single person has when doing this: leaving insurance panels feels scary as hell. 

You're worried you will lose all of your clients. You imagine sitting there in your office with nobody scheduled and fear you’ll never be able to pay your bills. You question whether you're being "selfish" by wanting to earn a good living. Does that make you greedy? Are you betraying your professional ethics? 

Here's what I know after working with therapists who've made this transition: the fear is worse than the reality. (And honestly, staying stuck in insurance hell is way scarier than taking control of your practice.) Most therapists who leave insurance panels report higher income, work fewer hours, and have a more balanced life in general. And they often fall in love with their work all over again.

How to Leave Insurance Panels as a Therapist and Get More Private Pay Clients: My Step-by-Step Process

Keep in mind this is not an “official” step-by-step guide. It may not be perfect, but it is what worked for me, and it’s enough to get you started. 

Step 1: Write letters to any or all of the insurance companies telling them you are disenrolling. 

Pro tip: If you’re too freaked out to do more than one, start with your least favorite insurance panel first - you know, the one that notoriously does clawbacks, has a low reimbursement rate, or always gives you a problem - that’s a great place to start. This gives you practice with the process and lets you test your systems with lower stakes. Then you can decide if you want to disenroll from some (or all) others. 

Step 2: Once you have your official disenroll date, map out a schedule to talk to each therapy client.

Please don’t send them an email telling them (as tempting as that is for those who want to avoid the uncomfortable). Make a plan to do it in session. It’s a conversation that needs to happen face to face (if you work with me as a coaching client, we practice these conversations. We role play and I pretend to be an irate client, a hurt client, any scenario you fear, we will play it out and practice so that you feel ready to have these conversations IRL) 

In the meantime, start working on your marketing, get a website or update the one you have, update any online profiles you have to reflect the changes, and don’t take on any new clients with the insurances you are disenrolling from unless you clearly explain what’s happening. You don’t want to start with a client and a week later tell them you’re leaving their panel. 

Step 3: Get Clear on What You Will Charge for Private Pay Therapy Sessions

The next step is to decide what your fee will be and spend a ton of time practicing saying it out loud to anyone who will role play with you. If you work with me as a coaching client, I will help you choose the right fee, practice saying it until you’re super confident, and even role play all sorts of scary scenarios including inquiry calls, if people get angry and challenge your fee, and more. You will be well prepped!

Step 4: Get an EHR Like Simple Practice.

If you don’t have one, get an EHR. I use Simple Practice and I love it. Here’s my referral code if you want to give them a try: Just click here!

It does everything — payments, scheduling, reports — all in one spot. It’s made my life 1000% easier. 

Step 5: Have “The Talk,” Telling Your Therapy Clients You are No Longer Taking Insurance, But Would Love to Keep Them on as Private Pay Clients

This is where most therapists get stuck. How do you tell clients you're leaving their insurance panel? 

I recommend giving clients notice but not sooooo much notice. Enough to wrap up or refer out but not so much that it’s anxiety provoking for the client. I think a month or so is sufficient. 

Be direct and honest: "I want to let you know that I'll be ending my contract with your insurance company effective [date]. This means that after that date, I won't be able to bill your insurance directly and your session fee will be [x].” **This conversation takes a bunch of practice. If you work with me for 1:1 coaching, we will cover this together.) 

Don’t assume everyone will leave: When the therapists I work with consider leaving insurance panels, they are often held back by the fear that all of their clients will leave. But, in my experience, more will stay and become private pay clients than you think!

Step 6: How to Build Your Private Pay Client Base 

Here's the part everyone worries about: how to get more private pay clients once you drop insurance panels. Here are some of my best tips:

• Focus on your ideal client: What type of therapy client do you most want to work with? What problems do you help your clients solve? Market to those specific people. 

• Talk to people who already know you're awesome: Let current private pay clients know that you are accepting new clients.

• Offer workshops or presentations, focusing on the people you most want to help.

• Zhuzh up your website so people can find it.

What to Expect During the Transition: From Insurance Panel Hell to a Practice of Private Pay Clients

Let's be real about what the first few months look like:

Some (but not all!) clients will leave. Not everyone can or will pay private pay rates. This doesn't mean you failed; it means you're clarifying who you can best serve. 

You'll feel guilty. You've been conditioned to believe that accepting low insurance rates is somehow more ethical. If it’s not working for you, your business, or your life, than it’s not working. The end. You can't help anyone if you can't sustain your practice. 

The freedom will feel weird. After years of insurance company oversight, making your own clinical decisions can feel foreign at first. But you will get used to it — and then you’ll be so annoyed with yourself for not doing it sooner. But give yourself a break-you didn’t know what you didn’t know! 

The Bottom Line: Your Mental Health Practice, Your Rules 

Leaving insurance panels in favor of private pay clients isn't about becoming a greedy therapist who only cares about money. It's about creating a practice where you can do your best work without jumping through administrative hoops that serve insurance companies, not clients.

When you're not spending hours on prior authorizations and fighting for session approvals, you can focus on what you do best: helping people. 

You became a therapist to make a difference, not to make insurance companies rich. It's time to build a practice that reflects your values and supports your professional goals. 

I’ll Help You Drop Insurance Panels and Start the Cash Only Private Practice of Your Dreams

You really want to do this but you’re scared shitless? I get it — and I’ve got you. We will do it together. 

If you're ready to transition to a private pay practice but need help and guidance from someone who's successfully been there and done that, I'm here to help.

Together, we'll create a plan that increases your income, serves your clients, and gives you back control of your practice.(Re)claim your professional autonomy: let's talk about how to actually make the transition.

P.S. If you’re not so sure about working with me at the moment, you’re still invited to hang out and take advantage of my free resources. 

First, sign up for my newsletter where I talk everything therapy. There’s awesome stuff there and you’ll get to read every blog I release and you’ll know about every new service I offer. It’s kinda like getting the inside scoop before anyone else (well, a little like that but you know what I mean). 

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