SEATTLE — A typical therapy session in the Seattle area costs around $160.
If your therapist doesn’t take health insurance or is outside of your network, you might pay out of your own pocket and your therapist will get the full $160.
However, if you use insurance to pay for that session, your copay could be around $30 to $45. Once insurance issues reimbursement, your therapist might only get about $80 for that session — half of what they would make if you didn’t use insurance.
It’s a central strain in the mental health field: Many Washington therapists and other mental health providers say the amount they’re reimbursed by insurance companies has largely flatlined over the last decade, failing to keep up with the rising costs of living and their professional expenses. They say they’re spending more time completing insurance paperwork or arguing about billing errors, time many insurers don’t reimburse.
So if you’re wondering why you can’t find a therapist, “There are many reasons providers don’t want to touch insurance with a 10-foot pole,” said Robin Ballard, a licensed clinical psychologist in Lynnwood. The biggest problem, she said, is that “things aren’t changing” when it comes to compensation.
The growing challenges of the insurance system also place therapists in an ethical bind: “How do we continue to provide access for people” without financial means? asked Megan Wagoner, co-president of the Washington State Psychological Association. “And at what cost to ourselves?”
Put another way: People need affordable access to mental health care. Providers need to get paid. What happens when those two needs are at odds?
The reality is many clinicians don’t need to accept insurance. With historic demand for mental health care and a region full of high earners, Seattle-area therapists say they can fill their practice with clients exclusively willing to pay out of pocket.
“Many therapists in New York essentially don’t take insurance. Many therapists in the Bay Area don’t take insurance. I am worried Seattle is moving there, too,” Wagoner said.
That means, without intervention, people who work in mental health fear therapy in Washington could become a luxury service.
How it works
Mum’s pretty much the word when it comes to exactly how these rates are determined. Insurance companies declined to share specific details about how they determine the amount of money they reimburse mental health providers for their services, and therapists say their contracts prevent them from disclosing their individual agreements.
Here’s what we do know: Private-practice therapists say they price their services based on factors including their degree and credentials, the cost of renting office space, and paying for continuing education courses.
Premera BlueCross said in an email statement that the company considers a variety of factors in determining the rates at which it reimburses therapists in its network, including “industry changes, customer and provider feedback,” reimbursement rates from the Centers for Medicare & Medicaid Services and service use, along with “many other layers of analysis.”
Kaiser Permanente, another one of the largest private insurers in Washington, declined to comment for this story.
Barbara Griswold, author of “Navigating the Insurance Maze: The Therapist’s Complete Guide to Working with Insurance — And Whether You Should,” said reimbursement rates are most impacted by a therapist’s ZIP code and their licensure.
It also depends on whether they speak more than one language, whether they provide a specialty service and whether they operate in an area with few therapists.
But there are no clear guidelines around what would allow therapists to receive a rate increase, said Angela Agelopoulos, a licensed clinical psychologist, owner and clinical supervisor of Seattle Counseling and Wellness.
The U.S. government and Washington state require insurance companies to cover mental health and substance use disorder services at comparable levels to physical health concerns — known as mental health parity.
Insurance carriers are supposed to have comparable processes, including for determining how much they pay a primary care physician versus a mental health care provider, said Kaye Pestaina, vice president at the health policy research organization KFF and co-director of its Program on Patient and Consumer Protections.
“If they’re not comparable processes, that’s a violation,” she said.
Data and anecdotal complaints show insurers often fail to live up to that promise.
Consulting research firm Milliman wrote in a 2019 report that the average in-network reimbursement rate for behavioral health office visits is lower than for medical and surgical office visits, and that the disparity increased between 2015 and 2017.
In August, several federal agencies proposed updates to parity laws, including that insurance carriers provide information upon request about how they set reimbursement rates for medical and behavioral health services.
Enforcement of the parity rules, Pestaina said, might incentivize carriers to provide higher reimbursement rates.
Michael Franz, the senior medical director of behavioral health for Regence BlueShield, wouldn’t share the specific rates the company provides to mental health practitioners but said rates have “increased significantly” since the end of the COVID-19 public health emergency.
He also wouldn’t share the comparative rates between behavioral health and medical and surgical services but said Regence is “really committed to parity.”
“We use an identical approach in researching, establishing, updating, and negotiating reimbursement terms for the medical and behavioral health providers,” said Franz, who is also a child, adolescent and adult psychiatrist. “There’s no differentiation in strategies, standards or factors we’ve employed in those processes.”
The value of insurance
Insurance gives people access to counseling when it might otherwise be out of reach.
“Why should only the rich and the wealthy be able to have mental health services?” Agelopoulos said.
There can also be business benefits: For counselors, registering within an insurance network provides a built-in referral system that can help build a practice and offer a steadier stream of clients, said Erin Wright, a licensed mental health counselor in Seattle.
Ballard, who is licensed to provide therapy but now mostly conducts psychological assessments and evaluations, said she accepts insurance, which creates consistent demand but also a long wait list. She’s booking now for next summer.
“There’s a vigorous debate about whether or not it is ethical to take insurance. The side I’ve come down on, for now, is that this is how most people access care,” Ballard said. “If this is going to be an accessible service to a much broader range of people, you have to involve insurance.”
Therapists who continue taking insurance often feel obligated to help people access care, said Charles Benincasa, a licensed psychologist in Everett. People get into mental health work because they “want to help people navigate through their problems or concerns and increase their well-being.” But, he said, “so many systems exploit that.”
Still, he’s confident his practice could survive without him needing to take insurance.
“If I left every insurance panel tomorrow and did cash only, I would still have a full practice,” he said.
Issues with insurance
The challenges with accepting insurance are many. For one, reimbursement rates often don’t account for the full extent of clinicians’ services.
For example, Ballard said, conducting and reporting psychological evaluations can take days. For the first hour, the reimbursement is “pretty good,” but the payment for additional hours of work drops significantly.
She doesn’t know how long she will continue to accept insurance. “I’m potentially leaving thousands of dollars on the table every month, and that’s really frustrating. I think about cutting ties all the time.”
Cost-of-living adjustments, tied to an inflation index, she said “would go a long way to make sure that we’re at least treading water and not falling farther behind.”
Ultimately, people need to be able to pay for food, child care and keeping the lights on at their home, said Renee Fullerton, council staff coordinator at the Washington Workforce Training & Education Coordinating Board.
A 2022 assessment of the behavioral health workforce that Fullerton helped conduct found that marriage and family therapists, substance abuse counselors and mental health social workers in Washington make between $49,000 and $59,000 annually, and that range has barely budged since 2016.
The longer providers can be kept in the workforce, the more time they have to build relationships with patients and “the better outcomes we’ll see,” she said. “When there’s a steady churn of folks, we’re losing so much potential.”
Benincasa said he was being reimbursed more money in Minnesota, as a master’s level provider seven years ago, than he is in Washington as a doctorate-level psychologist — by some of the same insurance payers.
“People literally can’t survive in the state of Washington with the cost of living,” he said.
The setup for Medicaid, state-sponsored insurance, is also bleak, providers said. Most Medicaid clients get care through community behavioral health centers, which have long struggled to recruit and retain staff.
Medicaid often doesn’t reimburse for the full components of a patient’s treatment, like care coordination between agencies, which is crucial to creating continuity in treatment, and “other desperately needed services,” said Tom Sebastian, the CEO of Compass Health in Everett.
Instead, these facilities get paid for hours when they serve clients. The problem is Compass experiences about a 30% no-show rate. Clients sometimes miss appointments because they don’t have transportation or they have to attend to child care needs or “their challenges are so significant, they may lose awareness that they even had an appointment,” Sebastian said.
That means, about 30% of the time, “We’re unable to capture any revenue to cover the costs of those staff hours,” said Sebastian, whose organization is a member of Fourfront Contributor, a network of providers in Washington advocating for different payment models. “So long as we’re under this improperly structured system, it is just a big challenge.”
One of the largest worries for mental health practitioners who accept insurance is paperwork. Many therapists say they live in fear of clawbacks, where insurance companies can request thousands of dollars in back pay if they identify billing errors.
According to Washington state law, insurance carriers have two years from the initial error to detect and collect overpayment. Having a more narrow statute of limitations “would be hugely important,” Ballard said.
The psychological toll of the threat of clawbacks from insurance companies is high, Griswold said.
If “you didn’t cross your T’s and dot your I’s or you left out this little thing,” insurers say, “‘We’re gonna just take all the money back.’ It’s just the saddest thing,” she said.
Griswold surveyed more than 500 mental health care providers nationwide in July. One-quarter of respondents said they planned to leave at least one insurance plan in the coming year, and 4% said they planned to leave all plans they worked with. “Probably more than half don’t work with insurance in the first place,” she said.
Moving forward
Therapists are mostly advocating alone, since contracts between insurers and providers prohibit discussion of reimbursement rates.
“You are legally not allowed to discuss with other therapists or post on Facebook or tell a reporter how much they are reimbursing you,” Wright said. So mental health clinicians cannot work together to demand higher wages.
“It feels very lonely as an individual practitioner to push back against insurance companies because you know that they can lose any one person. And it’s no skin off their back,” Ballard said.
Benincasa said large companies should leverage their power to bring insurers to the table for the benefit of workers.
“If we want things to change, the people that need to get involved are people at Boeing and Amazon, people that are negotiating the benefits that they provide to their employees,” he said.
Within the public insurance sphere, efforts have been made to improve reimbursement rates for providers who accept Medicaid. The Washington state Legislature approved increases of 7% for community behavioral health facilities that began this year and 15% starting in 2024. It’s a “huge positive,” Sebastian said, but “you can’t rate-increase your way out of the [flawed] structure of the entire system.”
He points to a new funding model called Certified Community Behavioral Health Centers, which would allow facilities to project the full cost of their services, and then request that amount to be reimbursed by the Centers for Medicare & Medicaid Services. Twelve states have adopted the model as part of Medicaid.
The funding model has already been tested in Federally Qualified Health Centers, which serve a similar clientele as community behavioral health centers but for physical needs.
“Mental health and substance use have been treated differently for so long,” said Angela Kimball, the senior vice president for advocacy and public policy at Inseparable, a mental health advocacy organization. “People don’t even recognize the pattern of discrimination that exists in how we treat mental health conditions.”
Washington state will have an opportunity to apply to convert its system to the CCBHC model through the Substance Abuse and Mental Health Services Administration next year.
“We’re trying to unwind a multigenerational underinvestment in behavioral health services. That’s not going to be fixed in any one legislative cycle,” Fullerton said. “It’s going to take a while to unwind all previous policy choices that lead us to where we are.”
This article was supported by the Journalism and Women Symposium Health Journalism Fellowship, with the support of The Commonwealth Fund.
