I’m not an expert when it comes to working with health insurance, not by a stretch. But as Executive Director, I do work a lot with billing and I know there’s a lot of confusion and frustration on the patient side of things when they are trying to figure out which providers “take” their insurance. I wanted to give a very top-level sketch of how medical health insurance works and dispel some myths.
- There are cash practices and there are insurance-based practices. Some providers, such as mental health practitioners and homebirth midwives, run cash based practices. Their reasons for this can be varied and nuanced. Some times it may be by choice. Some times it’s because…
- Providers have to apply to get a contract with a health insurance company. Large health care clinics and hospitals have contracts in place that apply to their providers on staff. However, small, independent clinics and solo providers have to apply to get contracts with each insurer. Some insurers are very easy to contract with as a provider. Some insurers are next to impossible to contract with and their members end up having limited access to various types of providers. While the insurers will say that only working with larger organizations means that there’s reduced fraud (fair enough) and economies of scale, but I have a slightly different view. This often results in only suppressing innovation and hurts small business owners and entrepreneurs by penalizing providers who see a need to work independently or to create a new practice to better serve their community.
- Some times providers opt NOT to have a contract with an insurer if the reimbursement rates are really low compared to other providers.
- Oh! And not just anyone can get contracted. As a Childbirth Educator, I can’t get my own contract. As a doula, I can’t get my own contract.
The decision to “take” insurance has to start with a provider taking the initiative to apply for credentialing and/or contracting. I hear a lot of people make blanket statements about reimbursement rates being universally low, but that’s not always true. Some insurance companies can end up having really amazing reimbursement rates for some procedures. Some have lower rates, yes. It really, really depends on the procedure and the rates that the insurer has set, which is why it’s so perplexing to watch providers and businesses choosing to run cash-only practices without doing any actual due diligence on the economics of contracting with insurance.
But again, the other side of the coin for providers/ organizations is that insurers can be easy to work with (I can name a couple) and some can be REALLY awful (I can easily name a couple here too) to work with. When insurers tightly restrict who they will contract with, you do end up with legitimate rationing of health care. Mental health providers who work with kids under the age of 8 are staggeringly difficult to find, but if you ask the insurers, they refuse to add new providers to their networks because they have plenty. Yeah….not so much.
The subject is really a lot more nuanced than I can even explain here. But hopefully it sheds some light on that ever-looming question of “Do you take insurance?”