ACA Blog

Deb Legge
Nov 23, 2010

Third-Party Pay: Is It Right For You?

Licensing of Counselors is relatively new in New York. As a Private Practice Mentor, I am helping more and more NYS LMHCs start their part-time or full-time private practices. In my work, I find there are more and more opportunities for LMHCs to be included on insurance panels and to receive third-party payments. One of the most common questions I hear from those I mentor struggling with is: ‘Should I take insurance or should I have a private pay practice?”

I feel pretty confident in consulting on this issue because for the first 15 years, my private practice was 100% private pay. Since that time, I have been on panel with many insurance companies and I’d say that approximately 60% of my practice is now with insurance. I’ve done it both ways. And, I’ve mentored many mental health professionals with regard to this issue.

However, this is not a cut and dry issue. There isn’t one answer that applies to everyone. It’s the kind of question that is best responded to with more questions. Questions like: How many clients a week do you plan to see? How much money per session do you wish to make? How do you feel about billing and collections? What is your comfort level with waiting for your money? How are you with tracking sessions, sharing information, and asking for additional sessions for your clients?

Don’t sell yourself short though – chances are with some hard work and persistence you can probably do very well with a private pay practice. On the other hand, it can also be helpful to add insurance companies to your referral source list.

You see… it’s your practice. You get to decide what kind of practice you want, based on the answers to those questions and based on your goals for your business. You get to weigh the risks (dealing with insurance companies, waiting a bit for your money, negotiating rates, obtaining authorizations, having to ask for approval for more sessions, billing, collections, having to work a bit harder to find private pay clients, etc) and benefits (helping out your clients by taking their insurance, less paperwork, not having to share information or ask for sessions, broadening your client base to people who will only be seen “in-network”, getting referrals from insurance companies or as a result of being on their website, perhaps increasing the number of clients you might see, etc.) of taking or not taking insurance.

Once you consider your responses and weigh your options, I believe you will be able to make the best decision for you. And, either way, if it doesn’t work out you can always change it up. Ahhh… the beauty of Private Practice!

Deborah Legge is a counselor, an assistant professor, specializes in coaching counselors in private practice, and is the founder of

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