Whether you’re just starting your behavioral health practice or reevaluating your reimbursement processes, choosing between private pay and insurance is critical. The decision will impact your financial operations and the accessibility of your services.
With that in mind, let’s explore these behavioral health medical billing business models for ABA therapy and how to choose the right one for your practice.
Private Pay vs. Health Insurance Reimbursement
What is private pay, and how does it differ from an in-network insurance payment model? A full private pay behavioral health practice is one that has decided not to panel with any health insurance providers. The client is 100% responsible for their session fee, which can be paid upfront or through a practice payment plan.
On the other hand, practices considered “in-network” providers are those that accept insurance payments for their ABA services. Even if a practice accepts insurance, that does not mean they accept all insurance plans.
So, which model would be the best practice for your ABA therapy company?
What Are The Benefits of Private Pay?
Operating as a private pay or “cash-only” practice means clients are responsible for payment directly out-of-pocket. There are many benefits to this billing model, including:
You Can Set Your Own Fees
Private pay practices have the freedom and financial autonomy to set their own fees. They determine their worth based on experience, expertise, and market demand and are not restricted by insurance company fees. This could benefit an ABA therapy practice that offers a range of specializations.
Simplified Billing Processes
There is no need to navigate the complexities of the health insurance landscape as a private pay practice. There’s less paperwork and no claims to file, and you’re less likely to need auxiliary staff. This simplification boosts billing practices, allowing for more client care and focus on services.
No Delay in Payment
Private pay makes it easier to understand and balance your finances. There’s no waiting around for insurance claims, with the potential for rejection or denial. Payment is settled immediately or via a pre-approved payment plan, which gives a much simpler overview of what is going on with the practice’s finances.
Why Do Practices Choose Insurance Reimbursement?
Of course, many ABA therapy service providers choose to become “in-network” behavioral health specialists. This model also comes with a host of benefits for any practice, including:
Accessibility and Expanded Client Base
Choosing to accept health insurance opens the door to a broader clientele. It increases accessibility to mental health services for those obstructed by the barrier of high out-of-pocket costs. Your client base is expanded, reaching a diverse and inclusive population range.
Financial Stability
The increased client base will provide a steady stream of clients, which ensures a consistent income flow for the practice. It’s ideal for companies that want to minimize risk and prefer a more predictable income.
Reputation and Trust
Those seeking ABA therapy services could be more likely to view an in-network practice as credible and trustworthy. Clients can feel more secure knowing that insurance providers recognize and accept the practice.
Considerations For Insurance and Private Pay
Despite the plethora of benefits both of these medical billing business models offer, some factors might make them less suitable for your practice. Let’s take a look.
Private Pay
These are some of the essential considerations to scrutinize before becoming a private pay practice:
- Smaller client base
- Limited access for vulnerable communities
- Creating pre-approved payment plans
- You must build your own referral network
- It doesn’t bring the trust associated with in-network providers
- Less financial stability
Insurance
These are some of the factors that you need to keep in mind when considering insurance reimbursement:
- Tedious and time-consuming credentialing process
- Requires staff with knowledge of insurance billing codes, authorizations, and claim submissions
- Rejections/denials impact the timeliness of payment
- The insurance companies determine your payment rate
- Need the software and systems in place to manage claims
What’s Best For Your Practice?
Ultimately, the decision to become an in-network practice or operate solely via private pay can be determined by a few key factors:
The Demographic You Aim To Serve
Your target audience will determine whether you accept insurance. If you aim to serve a community that is more likely to have insurance and less likely to afford out-of-pocket payments, accepting insurance will enhance accessibility and broaden your audience. However, if you are based in a community and are interested in individuals who can afford an upfront payment, private pay will serve you better.
Financial Goals
Determine whether autonomy and flexibility are more important than stability and a large client base. If you want greater control over your fees, opt for private pay. If the latter is more appealing to your business, go with insurance.
Staff Capacity
Your capacity to handle administrative tasks will impact your payment process. Private pay is best for a small practice with limited administrative resources. You’ll need significant infrastructure to handle insurance-related administration.
The Values and Approach of Your Practice
What does your practice value? What are your goals? Do you value the direct and personal connection with clients that you get from a cash-only client base? Or, is making ABA therapy accessible to the wider community your mission? This will help steer you in the right direction.
Outsource to Missing Piece for Adaptability and Flexibility
At the end of the day, there is no one-size-fits-all approach. However, you can remain adaptable and agile by outsourcing to a professional medical billing services company. At Missing Piece, our experts take care of all the medical billing and insurance administration for you so that you can focus on delivering quality care to your clients, no matter what kind of medical payment process you use.
Contact us to learn more about our valuable medical billing services and how we can help you.