Clawing back payments, demanding confidential patient notes, and setting up convoluted administrative systems—these are just a few of the practices by many insurance companies that psychologists face when accepting insurance reimbursement for mental health services. Such barriers have driven a large number of providers to leave insurance networks, ultimately making it harder for patients to access the care they need.
Not all insurance companies engage in such practices, and mental health professionals report that experiences can vary substantially from one company to the next. (Interviewee statements in this article from practicing psychologists reflect their personal experience with particular insurance companies.) But the challenges psychologists do face with problematic practices by many insurers are very real and make it difficult to serve patients through their insurance.
“We want to take insurance. We understand that many people cannot afford to pay full fee out of their own pocket—that having good access to care means being able to use your insurance [for those who have insurance],” said Marnie Shanbhag, PhD, APA’s senior director of independent practice. “Many psychologists just can’t afford to do so anymore and keep their practice doors open.”
In fact, more than one-third of practicing psychologists do not take insurance, according to the 2024 Practitioner Pulse Survey, released by APA and its companion organization, APA Services, on December 17. The top reasons respondents cited include low reimbursement rates for services, significant administrative burdens, and problems getting paid.
As described below, mental health providers report being pressured by insurance representatives without clinical expertise to shorten visits or prematurely end patient care, including those with severe conditions or at risk of suicide. Many psychologists spend nights and weekends navigating insurers’ byzantine phone trees and other complex systems to track down missed payments. Others have lost tens of thousands of dollars from insurance audits that occur months or years after services were provided.
Based on her experience with certain insurance companies, Melissa Todd, PhD, a licensed psychologist in private practice in Eugene, Oregon, said, “the reality is that insurance companies are actively using tactics that are harmful to mental health providers as a means of saving money, and the downstream effect is that it hurts patients, who are unable to access care.”
Patient protections were built into the federal Mental Health Parity and Addiction Equity Act, passed in 2008, which promised to improve mental health care access by requiring insurers to provide coverage for mental health care on par with physical health care. While the parity law has helped mental health patients in many respects, some complex issues like inadequate insurance networks and a patchwork regulatory system have remained a challenge. New rules discussed below are aimed at fixing the network issue, but provisions relating to networks are not scheduled to go into effect until January 2026.
Thus, psychological care has remained tough for many to access: Compared with specialty medical care, patients are more than 10 times as likelyopens in new window to go out of network to find it.
With support from hundreds of independent practitioners, investigative journalists at ProPublica helped expose the ways some insurers are limiting careopens in new window and have driven providers to leave mental health networks. APA Services provided background information for the article and psychologists to interview.
In another report, ProPublica found that United Healthcare had used an algorithm to audit therapists it flagged as having practice patterns that were atypicalopens in new window, such as frequent therapy sessions. Reviewers who were not clinicians then pressured those therapists to withhold care or reduce the length of therapy sessions. In recent years, regulators in three states and the U.S. Department of Labor found this to be a violation of mental health parity law, but ProPublica believes that, partly due to a patchwork of agencies regulating insurance, United Healthcare has been able to restart essentially the same audit processes under a different name.
Beth Green, PhD, a licensed psychologist based in San Diego, was told by a major insurer to reduce sessions with a young woman who had been raped and faced a series of complex mental health issues. “Even if the treatment provided was in line with guidelines for a severe condition, [the insurance company] would scrutinize the care provided,” she said. “They might say that meeting once a week was too often or that once a month must not be accomplishing much.”
Speaking about their experience with insurers generally, many psychologists report suffering through a daily grind of administrative obstacles. Green describes these obstacles from insurers as “unnecessary and probably intentional.” Impenetrable phone trees, bad voice recognition software, poorly trained customer service representatives, billing codes that constantly change—each minor inconvenience adds up to an environment where mental health care becomes harder and harder to provide.
The uncompensated time spent navigating such administrative burdens, often on evenings and weekends, has become increasingly onerous for providers, Shanbhag said.
Based on her experience with insurers, Julie Bindeman, PsyD—a reproductive psychologist who directs Integrative Therapy of Greater Washington, a private practice outside of Washington, D.C.—said that “the process is meant to be frustrating; it’s meant to make people give up; it’s meant to prioritize their [the insurers] bottom line versus people and people’s health.”
Of the 40 or so patients she works with, Green now has seven payment issues with insurance companies in various stages of appeal. The time and energy spent tracking down reimbursement drains bandwidth that might otherwise go toward treating new patients, she said.
“If I have a moment where I don’t have any outstanding payment-related battles, I am really pleased,” Green said. “But it doesn’t last very long.”
The practice that many psychologists find most troubling is what’s known as the “claw back” in which the insurer audits services after the fact—sometimes years later—and may reclaim tens of thousands of dollars or more from providers if the insurer deems the care was unnecessary.
“This [claw back] situation truly illustrates the imbalance of power between insurance companies and behavioral health providers,” Todd said. Small practices and solo practitioners make up much of the nation’s mental health care system, added Shanbhag, and many lack the deep reserves of a larger medical system to survive a major claw back.
It also creates an ethical dilemma for psychologists, who find themselves balancing their duty to protect their patients with their own need to get paid reliably for their work, said Susan McGroarty, PhD, ABPP, director of professional affairs for the New Jersey Psychological Association.
Altogether, the challenges described here help explain why 34% of respondents to the 2024 Practitioner Pulse Survey said they do not participate in insurance networks. Of those, nearly half (48%) said they had been in-network at some point. Psychologists who have never accepted insurance or recently stopped taking at least one form of insurance cited low reimbursement rates (82%), administrative issues (62%), and unreliable payments (52%) as the main reasons for their decision.
Many feel conflicted about the choice, especially as they continue to get calls from frustrated patients searching for care in a “ghost networkopens in new window” full of providers who have left the insurance panel or are otherwise unavailable yet still listed.
“These are people who are vulnerable, who are in some cases experiencing a mental health crisis,” Todd said. “The burden is being put on them to find in-network providers who meet their needs—and they can’t.”
APA Services is working hard to hold insurance companies accountable to the mental health parity law and root out practices that deny patients their right to mental health care. A key point of that advocacy is to reduce barriers to psychologists taking insurance to improve access for patients who rely on their insurance.
In October, APA Services partnered with the American Psychiatric Association to send a joint letter to Optum, which manages behavioral health services for United Healthcare. Members reported that without warning, the company had imposed “prepayment reviews,” requiring psychologists to send detailed patient records before claims were reimbursed. After the joint letter, Optum advised APA Services that the practice had been paused, but some complaints continue.
APA Services also advocated for recent updates to federal mental health parity rules, which have a focus on network adequacy and reimbursement, along with bills to expand mental health parity in states. It is also lobbying to increase Medicare reimbursement rates for mental health services, which have not kept pace with inflation. Other efforts by APA Services to expand access to mental health care to those in need include pursuing reimbursements for trainees providing mental health services and for treatments with digital therapeutics.
“We seek to empower patients and providers alike to navigate a complex system,” Shanbhag said. “When someone is already suffering and chooses to reach out for care, we want to lighten the additional workload of navigating the insurance maze.”
