Why Have So Many Therapists Stopped Taking Insurance? The Real Reasons Behind the Shift, and Why It Matters for Your Care
Have you ever searched for a therapist and felt frustrated by how few accept insurance? Or perhaps you’ve tried an app-based therapy platform, and ended up more overwhelmed and frustrated than when you started?
That’s because the therapy landscape has changed significantly over the past decade. Demands on therapists are higher, and reimbursement rates have stayed the same or, in many cases, even been reduced. Insurance companies require stringent documentation, and often “clawback” money paid out to therapists, sometimes several years AFTER treatment has been rendered. VC-platforms lure therapists in with the promise of easier billing and higher reimbursement rates, then slash rates, increase requirements for participation, and, in some cases, require therapists to keep progress notes in systems owned by the corporation, often with increased incentives for using AI in session, or for sending out periodic mental health assessments to clients.
These are just a few brief examples of the challenges facing therapists who choose to take insurance. Some of these challenges have always been a factor, but many new concerns and roadblocks are facing contemporary therapists as VC-backed therapy platforms and conglomerates continue to emerge. Understanding those changes can help you make a more informed decision about your own care.
How Does Insurance Based Therapy Work, and What Do Therapists Have to Agree to?
When a therapist accepts insurance, they agree to a set of conditions most clients never see. To bill your insurance company, your therapist must assign you a psychiatric diagnosis. This diagnosis becomes part of your permanent medical record and can affect future insurance applications, disability claims, eligibility for certain careers and military service, and more. Insurers can limit the number of sessions they'll cover or the length of your session time (often labeling 60-minute sessions as “extended sessions” that require additional approval and are subject to higher levels of scrutiny than 30 or 45-minute sessions). They can require periodic justification for continued treatment; and in some cases, can review and override clinical decisions made by your therapist.
Your in-network therapist also agrees to accept the insurer's reimbursement rate, which does not take into consideration a therapist’s training, years of experience, and specialized training. To make that financially viable, many therapists need to carry large caseloads, and see many clients each day. Over time, this affects the attention and energy your therapist can bring to each client.
Insurers also have strict documentation rules for therapists. This means that your in-network therapist is spending a significant amount of time outside of sessions documenting what happened in your session. The insurance company (or in some instances, the Venture Capital, or “VC” Corporation, such as Alma, Headway, etc.) can request to review these records at any time and your therapist, by virtue of their contract, is obligated to hand over your medical record. When a therapist agrees to the terms of an insurance contract, they have agreed to provide documentation if and when it is requested. This means that someone at the insurance company or VC company will be reviewing the details of your session. They can then choose to take back payment for your session, in most cases up to 2 years after the session occurred. This means that your therapist could suddenly owe thousands of dollars to the insurance company because someone there decided your care wasn’t necessary. It all sounds outrageous, but it happens more often that you might think.
None of this means that insurance-based therapy can't be helpful. Many skilled and dedicated clinicians work within this system and provide excellent care. But it's worth understanding the constraints that shape it and the reasons why it’s often so hard to find a quality care using your in-network benefits.
What is a Venture Capital Corporation (VC) and How Is It Different From Insurance?
A venture capital (VC) corporation is a privately funded company that has received large investments from outside investors who expect a financial return. In the therapy industry, platforms like Headway and Alma are VC-backed, which means that they operate as businesses with profit obligations to investors, not just as billing middlemen they are often imagined to be. Unlike traditional insurance companies, VC platforms often act as intermediaries between therapists and insurers, setting their own contract terms, controlling credentialing, and taking a percentage of reimbursements. The result for clients is similar to insurance-based care. Your therapist's clinical decisions can be subject to oversight, your records can be requested, and the platform's financial interests shape how care is structured.
In practice, this means a few things for you as a client:
Your therapist has much less control over the financial piece than they would billing insurance directly. Rather than having the autonomy to check benefits for you, give you insight about progress toward your deductible, or to grant you a simple courtesy such as waiting until you get paid tomorrow to charge your copay, therapists working for VC-backed company hand all billing autonomy over the the company.
If there is an issue, there is often no customer service number to call. Many of the VC-companies avoid publishing a customer service phone number, even to therapists who work for them. If there is a billing or insurance coverage issue, you may have no choice but to try to resolve this through their chat functions or via email, with no ability to resolve the issue in real time.
Your records may be held by a tech company, with its own data infrastructure and privacy policies, not just your therapist or your insurer.
The role of AI in your sessions may be greater than you think. Therapy platforms are increasingly utilizing AI. They are required to obtain client consent for the use of AI in sessions, but clients often sign consents without fully reading through what they are agreeing to. It’s worth asking about the role of AI in your sessions, and thoroughly reading, and asking questions about, anything you sign.
If something goes wrong, your recourse is murkier than with a regulated insurance company.
This doesn’t mean you can’t receive good care through a platform. But the business model is not neutral, and you deserve to know this before you sign up.
How Is Private Pay Different?
A private-pay practice isn't a luxury service. It's a clinical choice.
When a therapist works outside the insurance system, they can set their own fees, control the size of their caseload, make treatment decisions without insurer oversight, and commit to working with clients for as long as the work genuinely requires. They can use evidence-based approaches, such as EMDR, that may require longer or more intensive treatment than an insurance company might approve. They can offer longer sessions without the threat of insurance denials or payment clawbacks. They can take your history seriously, move at your pace, and stay present in the work with you.
That autonomy is not incidental. It directly shapes the quality of care you receive.
A therapist who sets their own schedule and rate may also have more time to attend additional trainings, obtain their own consultation to promote growth, and truly become experts in their field. The additional time afforded private pay therapists who aren’t spending hours per week on extra documentation or chasing down insurance claims may also have the space to attend to their OWN self-care…so they can show up 100% for YOU. In the way that you deserve.
Many private-pay therapists also offer sliding scale fees or reduced session rates for clients who need them. If cost is a concern, it is always worth asking directly. You may find that your therapist is more flexible with their rate than their advertised rate suggests.
Exploring out-of-network benefits, and asking your private-pay therapist for a “SuperBill”
What is a SuperBill?
A SuperBill is an itemized receipt provided by your therapist. A SuperBill allows you to submit for reimbursement through your insurance company’s out-of-network benefits.
This means that even if your therapist doesn’t accept insurance directly, you may still be able to get back a portion of the cost, and many times it’s more than people expect.
While submitting for out-of-network reimbursement does carry some of the same risks as using in-network insurance directly (e.g. a diagnosis is required, and insurance companies can still request documentation from therapists to show that your care is “medically necessary” in the eyes of the insurance company) it allows you to retain more autonomy over your choice of provider, often opening more doors to providers who offer specialized services or treatments.
Your provider may even be able to help you check your out-of-network benefits for you or, in some cases, may help walk you through the process. It’s always worth asking the question.
What Does This Mean for Me?
Maybe after reading all of this, it’s still important to you to use your in-network insurance to cover the cost of therapy. That is 100% fine, and you will likely be able to find a qualified therapist within your insurance company’s network. That is a valid choice, and a choice made by many. But you do deserve to know what questions to ask, and transparency from your care providers. Whether you’re considering seeking care from an independent therapist, insurance-based therapist, or therapist through a VC platform, it's reasonable to ask:
What are my therapist’s qualifications? What experience do they have treating clients with similar symptoms to mine? Do they receive clinical supervision? What modalities (e.g. EMDR, CBT, etc.) do they use?
How is my care documented, what is shared, and with whom is it shared?
Am I receiving a formal diagnosis? If so, what is my diagnosis?
Is my therapist paneled directly with my insurance company, or is there a third party involved?
Does my therapist use AI? What is the role of AI in your practice, and in my sessions? How do you ensure that my privacy is protect?
Who do I contact if there is a billing issue? Can my therapist help me with this, or do I have to go through the platform for assistance?
Is there flexibility on fees? Do you offer a sliding scale or reduced fee rate?
You’ve spent enough of your life not being seen or heard. You deserve care that’s built for you, with a therapist who is truly present and attuned to your needs.
As a private pay therapist in New York and Florida, I offer attuned, conscientious therapy where you, not the insurance company or venture capital corporation, are able to direct your care. I offer SuperBills for insurance reimbursement, and also offer a tool to instantly check your out-of-network benefits in real time. I also offer a limited number of reduced fee slots to improve accessibility to care.
If you’d like to learn more about what it’s like to work with me, reach out today to schedule your free consultation call.
Are you a therapist interested in breaking free from insurance panels or VC-backed platforms to build your dream cash-pay practice? Reach out today to learn more about how I can help.
Susan Candiloro, LCSW-R, is an EMDRIA Certified Therapist and EMDRIA Approved Consultant offering virtual therapy in New York and Florida. Since opening her private practice in 2018, Susan has exited 2 VC-platforms and 6 insurance panels. With over 25 years of experience in the mental health field, she now runs a fully private pay practice outside of Albany, NY. In addition to helping other therapists built their dream private practices independent of insurance panels, Susan specializes in working with women navigating the lasting effects of relational and developmental trauma, including anxiety, perfectionism, and burnout, as well as women with late-diagnosed ADHD. Interested in working with Susan? Reach out here for business coaching & mentoring or here to inquire about becoming a therapy client.