Summer School Lesson 6: Third parties and insurance companies

Hello and welcome to the Business of Psychology Summer School edition.

Over the six weeks of the English school holidays, we are doing things a little bit differently around here. If you're looking to start up an independent practice in September, then this is the place to be as each week I'm dropping in with a quick lesson and tasks that can be completed in 30 minutes or less from your sun lounger.

By the end of the six weeks, you will feel ready to step into your practice in September, confident that you can find clients and have a safe and viable business foundation.

Each week, the lessons will go out on this podcast feed, but if you want the weekly tasks, workbooks, private community, and a live session with me at the end of the summer to hold you accountable and make sure nothing stands in your way, you will need to sign up here: PBS Summer School

I would love to see you in the community.

Full show notes of this episode are available at The Business of Psychology

Links & References:

PBS Summer School Sign Up

PBS Start and Grow

Rosie on Instagram:

@rosiegilderthorp

@thepregnancypsychologist

Week 6: Third parties and insurance companies

Welcome to Lesson 6 of Summer School, our final lesson! Today I'm going to be talking to you about third parties and insurance companies, because often when we start out in private practice, it can be helpful to supplement our own referrals with some from third parties, the most common being associate work for a larger, well established practice, referrals directly from insurance companies, or referrals from case managers representing medico legal firms.

Associate work

Associate work can be great to help you get your confidence and practice processes up and running at the beginning of your practice. In fact, many people choose to stay working as an associate rather than creating their own referrals.

The upside is you get the benefit of steady referrals and the best associate practices offer training and supervision opportunities or other benefits like free room rental when you see their clients. They also tend to handle the admin for you, so it can be very welcome in the scary early days.

The downside of associate work is less money, but less costs as well, so that might actually be fine. Just check that you don't go below your minimum fee that we worked out a couple of lessons ago, and also possible limitations on your own business growth. You need to check an associate contract very carefully for non compete clauses. These are clauses that state that you can't poach clients from the associate practice, which is very much fair enough. But, some of them do have some quite drastic terms in them. The chunkiest I've ever read was, 'You can never work with any mental health client within a 50 mile radius of the associate practice for one year after you finish with your last patient with us’. And I won't get into the pros and cons of that type of clause here, but just be aware, and if you see one that you think might limit your potential business growth in the future, then walk away from it.

Finally, make sure that the associate practice aligns with your values. It can be really uncomfortable working for an organisation that has very different values to you. You went into independent practice to avoid those kinds of culture clashes, so don't put up with it, you don't have to. Only work with practices that you feel excited to work for and proud to work for.

Insurance companies

Now, you probably know if you've been in the professional Facebook groups, that insurance companies often don't pay the best rates. When I have a lot of referrals coming in, I do tend to decline insurance referrals because of that. However, when I was starting out, they were a very important referral stream, and they do continue to be useful when referrals are a bit slow. You just have to make sure that they don't take you below that minimum fee.

You can register for insurance companies like AXA, Vitality and Bupa directly, or you can register with lots in one go through the Private Practice Register, or the Health Code System as it's now called.

It's unpredictable, to be honest, whether these will bring you referrals or not. I have students in Start and Grow who consistently get referrals from the main insurance companies, and I also have students who don't get any. For me, it has been really postcode dependent. Where I am now, I am getting referrals directly from some of the insurance companies, but I definitely didn't in the two previous parts of the country that I lived in. It's nothing to do with me, it is everything to do with what they need in the particular location that you're in. However, I do think it's always worth registering because you might get ideal clients coming to you who want to use their insurance to pay you. I find this is happening more and more, and when we look at the economic trends, more and more people are taking out private medical insurance and they expect to be able to use it. So I think that this is going to become a bigger part of our work over time. Some people might say regrettably, but it is a trend that I'm seeing, so I would get registered. But make sure when you register, you're aware of the cap that they have on their fees, read their terms and conditions, save those terms and conditions on your desktop, or put them somewhere safe where you can check them. And make sure that cap is not below your minimum fee. Also make sure that you set your fee at the very top of what they will pay, because the chances of them ever upping what they pay you are very low. They do not increase their cap every year. They haven't done so for a very long time in a lot of cases, so it is worth getting the most you can possibly get from the beginning.

So my top tips for taking on insurance clients are:

make sure you have your provider number, their patient number, and their pre authorization code, and the payment conditions and terms of the insurance provider saved into your practice management system and at your fingertips before you start therapy.
You need to know and make sure the client knows what the policy is around missed appointments. For some insurance providers, they will not pay for a DNA but they expect the patient to pay for that themselves. If they don't know that before they miss their first appointment with you, they might well refuse to pay it or be very upset and that's just a horrible conversation. So make sure that everybody knows and you've adapted your terms and conditions to reflect those terms from that particular insurance provider.
You also really need to know when you can invoice and when you should expect to be paid because that is slightly different for all of the insurance providers too and you don't want to miss out on the money that you're owed simply because you've got that wrong.

Rehab work or medico legal case managers

When you take on cases from rehab companies, you're effectively working as an associate for them, so the same advice that I've already given for associate work applies. As an additional note of caution, however, and this is based on my own experiences, please do check the reputation of the company that you're dealing with before you accept referrals. I have seen psychologists and therapists treated really badly by these companies because they're quite prone to going under without paying their providers. They also often have completely unreasonable payment terms. You can't wait 90 days after submitting your invoice, or even worse, 90 days after the end of a whole course of therapy, to get paid. Not if you're in the early days of your practice, and not, to be honest, for most small businesses out there. It actually nearly put me out of business in my first year. So, where possible, check with peers if they've had good experiences of getting paid and working with these companies and triple check their payment terms are acceptable to you before proceeding. Some of them will negotiate with you. I did successfully negotiate down from 90 days to 30. It can be done, but just make sure that you do. And if they're not open to negotiating, walk away because it will be more trouble than it's worth.

Week six task

Your final task of the summer school:

Firstly, decide if you want to register with insurance companies, and if you do, then make sure that you save all their documentation somewhere and have it all clearly labelled and easy to access.
Then if you think associate work would be useful to you, do a Google search for practices local to you and make contact with three to five that you think align with your values to see if they have any associate work available and to set up a coffee or chat with the founder so you can check if their values fit and they run things in a way which works for you.

Okay, that's your 30 minutes for the final time. Go!