Mental health credentialing with insurance companies

To credential or not to credential? That is the question many therapists face when they start to practice. While becoming part of an insurance panel has many benefits, it also has some significant drawbacks. Still, for many therapists, becoming credentialed with insurance is one of their top priorities. Let’s take a closer look at all that mental health credentialing entails and ask the most important question: is it worth it?

What do we mean by credentialing?

Credentialing means going through the process of becoming a member of an insurance panel. The ultimate goal is to be listed as an in-network therapist by a specific insurance company. Unfortunately, you can’t apply to one place and be credentialed with every insurance company all at once. You have to apply to be credentialed on each insurance panel separately. For example, if you become credentialed with Blue Cross/Blue Shield, you will still have to apply to be part of Universal Healthcare.

Why get credentialed?

Credentialing opens up a whole source of clients to a therapist. While some people can afford to pay for a therapist out-of-pocket, most need to use insurance to afford the costs. If you live in a working-class area, for instance, the community relies on insurance. There are not many people that are going to be willing to pay full price. When you get on an insurance panel, every person who has that insurance will see you listed as a possible therapist. Credentialing also allows you a certain flexibility. If you switch jobs, your credentialing follows you. It is a resource you can depend upon, no matter the situation in which you find yourself. 

HMO vs. PPO

Insurance plans fall under two main designations, the HMO (Health Maintenance Organization)

and the PPO (Preferred Provider Organization). If you are part of an HMO, you must choose an in-network provider or pay for it on your own. People with HMOs also more often need to meet a deductible to start receiving full reimbursements. That means that until the deductible is met, the client is responsible for the costs, a fact that is valuable information for a therapist who wants to be paid for their services. A PPO offers clients more flexibility. In many cases, a client can choose their own provider and insurance will cover the costs. This means that a therapist might be able to be reimbursed at a higher rate for a client with a PPO versus an HMO. However, PPOs are becoming more restrictive. It is not uncommon for a PPO to pay therapists at the same rate as someone who has an HMO. As a provider, you may have to apply for an HMO and PPO plan separately. For example, it is possible that you could be accepted as part of a company’s PPO but not with their HMO. HMOs tend to be more competitive for therapists and their panels close more quickly.

How does the affordable care act impact therapists?

The Affordable Care Act (ACA)—also known as Obamacare—has had a positive effect on the world of mental health. The goal of the ACA was to expand healthcare coverage and make it more affordable and accessible. This has definitely been the case with mental health services. Mental health used to be considered a fringe benefit that was not covered by many health plans. Now, it is regarded as one of the essential health benefits. As such, it must be treated like most physical health services. For example, insurance companies can no longer set higher deductibles or charge higher copayments for mental health care.

Additionally, the ACA requires health plans to cover some preventive care, including mental health care, free of charge to the patient. The ACA also made it so medical history—including mental health history—could no longer be used against the client in the denial of insurance reimbursement. All in all, the ACA has lent a certain degree of legitimacy to mental health services, which only increases the likelihood that more of the population will attempt to use them.

Of course, the downside of popularity is that there is more competition. Specifically, now that almost everyone can use insurance for mental health services, more therapists will likely try to get credentialed. That means less room on insurance panels and more chances of rejection.

How does one get credentialed?

The process of getting credentialed can be long and tedious.

Here are the basic steps:

1. Get organized. You are going to need to provide a lot of information to get on insurance panels. This may include:

• A current license in the state you are practicing.
• Proof of Liability Insurance 
• NPI Number – or National Provider Identifier. This is a provision of HIPAA used to identify medical providers.
• Current resume or CV including employment history for the past 5 years.
• Certain panels may require a letter of intent.
• Proof of any special certifications or qualifications
• Tax ID Number–  It is recommended that you get an Employer Identification Number (EIN). If you have employees in your practice, this is necessary. And, even if you are a solo practitioner, it can be useful for your practice to have a Tax ID number that is not your Social Security Number. You can apply for this free online through the IRS website.
• Professional references
• Some panels may want a copy of your graduate school transcript

2. Complete the application process for the CAQH Proview. The Council for Affordable Quality Healthcare (CAQH) runs a national database that most insurance companies use for credentialing. It collects pertinent information and requires therapists to keep it up to date quarterly. Insurance companies use it to make sure that providers have the proper credentialing to be part of their insurance panels. You can submit a paper application but don’t. It is much easier to apply online.

3. Decide which insurance companies you want to join. Some factors to consider include:

• What insurance is popular in your area of practice?
• Are they reputable? If you do all work required to get on an insurance panel, you want to make sure that the company attracts customers, stays in business, and reimburses you on time. This is more likely with an established, reputable insurance company.
• What are the reimbursement rates for mental health services? Some insurance companies pay more than others for therapy, sometimes significantly more. And private insurance is likely to reimburse more than Medicaid. If you are going to try to accept Medicaid, then you need to be prepared to make less money for those clients.
• How long do they take to approve applications? Some insurance companies take much longer with the credentialing process. And although that may not make a difference long-term, it can have a huge impact when you are starting out and trying to attract a clientele.

A quick tip: A great way to find out about insurance is to ask other providers. Contact some other therapists in the area that have already gone through the credentialing process and benefit from their wisdom.

1. Apply to each insurance panel that you want to join. Unfortunately, these are separate processes. You can find provider applications on their website and apply online.
2. Follow-up. After a week, it is important to call the insurance company to see if they received your application and if they require any additional information. It is also a good idea to keep on checking to see where they are in the approval process. As they say, the squeaky wheel gets the grease.
3. If rejected, reapply. There is a decent chance that you will be rejected from some panels, especially from the most well-known companies in areas where there is an abundance of therapists. Insurance panels can fill up quickly and be very competitive. But don’t lose hope. You can appeal your rejection. And if the appeal doesn’t work, you should plan to reapply every several months. The capacity of these panels changes and people come and go. If at first you don’t succeed, try, try again.
4. Once approved by an insurance company, it is very important to read the contract carefully. Make sure you understand all parts of it. And, like any contract, parts of it may be negotiable. For instance, if you disagree with reimbursement rates, you can always attempt to ask for more money. Although this probably won’t be successful at first, it is more likely if you have been on a panel for a long time and your rates have not been increased. This is also a good time to familiarize yourself with how to contact the right people and file claims for each company.

Common challenges of the credentialing process

1. Time-consuming. Depending on the company, it can take months to get approved. And even more if they require additional or missing data. That is not to mention the time it takes to get all the information together and apply for each panel.
2. It is detailed. Make sure you fill in every blank of your application or it will be returned, elongating the process. This is true for each insurance application, as well as the CAQH.
3. Insurance panels are competitive, now more than ever. You are most likely to be approved if you can offer qualities that other therapists don’t possess.

These include:

• Speaking another language
• The ability to work uncommon hours, including nights and weekends.
• Crisis services
• Offering a specific niche, such as working with eating disordered clients, etc.