What’s the difference between in-network and out-of-network benefits for therapy? And what’s a superbill?

The insurance system in the United States can be incredibly complicated and difficult to navigate—even for those experienced in working with health insurance. Every year during open enrollment, I would be filled with dread. I knew it was important to look at my benefits options carefully and make good choices, but I simply didn’t understand all the insurance lingo. Thankfully, I am very fortunate to have an incredibly smart and insurance-savvy mom. In my first years after graduate school, she helped me understand how to compare my benefits plans. My years of learning from my mom during open enrollment, paired with my work as a therapist and as a benefits trainer, have given me a much deeper understanding of how insurance works.

Insurance Lingo 101: In-Network vs. Out-Of-Network

First, I want to talk about the difference between providers that are “in-network” and those that are “out-of-network”. Providers who are considered “in-network” have a contract with your insurance company. This means that they have accepted the rate and requirements your insurance company offered them to provide services to their insurance members. This can apply to individual providers, like therapists in private practice, or large medical facilities like hospitals or medical clinics.

“Out-of-Network” means the provider or facility is not contracted with your insurance company. For example, if you were a member of Fake Insurance Company of America (FICA) and your therapist was not contracted with them, they would be considered “out-of-network.”

Some insurance plans won’t let you see any non-emergency providers that are not “in-network” with them, or it requires going through a special process to request pre-authorized exception, which the insurance company may, or may not, grant. Typically, these types of plans are called Health Maintenance Organizations (HMOs) or Exclusive Provider Organizations (EPOs) and they expect their members to see their in-network providers, except in a medical emergency (like a visit to an ER).

The type of plan that typically offers “out-of-network” benefits is called a Preferred Provider Organization (PPO) or a Point of Service (POS) plan, however, you may pay more out of pocket than if you saw one of their in-network providers. There are often separate and higher deductibles, higher co-insurance (the percentage you must pay at the time of a service) and/or copays (the set dollar amount you must pay at the time of service), and higher out-of-pocket maximums (the maximum amount a member or family has to pay in a plan year after their deductible has been met) for out-of-network providers.

Many insurance companies have cost-estimator tools on their website where you can check whether a provider is in-network and what you’d owe. You can also find your out-of-network benefits in your plan’s member booklet, or by calling your insurance company directly. When you call, ask specifically about your out-of-network therapy benefits, and have the CPT code ready for the service you’re asking about—90837 for a 53-minute individual session, or 90791 for your initial intake.

An Insurance Example: How Out-Of-Network Reimbursement Actually Works

Let’s say Fake Insurance Company of America (FICA) is a PPO plan and it offers out-of-network mental health benefits to their members and Jill Savvy has this insurance. Jill wants to see a therapist her friend recommended, but the therapist isn’t on her insurance panel. Jill calls her insurance company to find out about her out-of-network benefits for therapy and is told the following:

FICA will cover 70% of mental health services after Jill has met her deductible for out-of-network benefits ($500), which means Jill will be responsible for 30% after she meets her deductible. She hasn’t paid anything for services toward her out-of-network deductible so far this year, which means she would have to spend $500 on therapy before her 30% co-insurance kicks in. The therapist she wants to see charges $250 per session (90837), but her insurance company will only reimburse $195 for 90837. This means only $195 per session gets counted toward Jill’s out-of-network deductible, and once met, Jill will have to pay $58.50 (30% of the amount allowed by her insurance company) plus $55 (the difference in the therapist’s rate of $250 minus $195, which is the rate the insurance allows). Her maximum out-of-pocket per year for out-of-network benefits is $4,000. If she meets $4,000 in out-of-network expenses from any out-of-network services, not just therapy, during the plan year, she will no longer have to pay the $58.50 portion of her therapy fee.

Jill will need to pay her therapy bill at the time of service and request what is called a “superbill” from her therapist. Jill will then take the superbill, which has the provider information, date of service, CPT code, and appropriate diagnoses, and submit it to her insurance company. Jill will then wait to be reimbursed $58.50 from her insurance company (after she has met her deductible) for each session she submits a claim for.

If she saw an in-network provider, her deductible is $250, but she doesn’t have to meet her deductible before her benefits pay for therapy. She would pay $10 per session and her health insurance would cover the rest. In this case, her therapist would bill the insurance company directly and Jill would only be responsible for paying her copay at the time of service. 

In either scenario, it’s important to know that sometimes insurance companies request more information from the provider, such as copies of treatment records (like session progress notes). In the out-of-network scenario, Jill would have to provide her written consent for her therapist to provide that information, and she could choose to decline to provide consent. This will likely result in Jill not being reimbursed for her therapy sessions. That kind of request is a real possibility, but not a given. In my experience submitting my own out-of-network claims as a therapy client, I don’t recall ever being asked for anything beyond the information in the superbill. Insurance companies typically have less control over services with an out-of-network provider; however, they can choose not to reimburse for services if they feel they don’t meet their criteria.

For the in-network scenario, billing insurance directly and being contracted with the insurance typically means the insurance has access to the client’s files without the provider having to request the client’s permission separately. Insurance companies can deny claims, saying the treatment doesn’t match the diagnosis (“not medically necessary” is a common phrase). When using in-network benefits, this might mean the insurance company refuses to pay the provider or doesn’t allow the member to have additional sessions. The insurance company typically has more say over services with an in-network provider.

You might come across companies like Thrizer or Mentaya, who offer to submit your out-of-network claims to your insurance on your behalf for a percentage of the bill or reimbursement. While you can certainly use those third parties if you like (yet another person with some access to your diagnosis codes and services utilized), with a little patience you can do it yourself. It can’t be that complicated if a company is charging a small percentage to do it on your behalf, and you get to keep the entire reimbursement instead of handing over a percentage of it to a third party.

Pros and Cons of Out-Of-Network vs. In-Network Therapy

Pros of Out-Of-Network

• More control over who has access to your records (potentially greater confidentiality)
• You and your provider can decide the best course of treatment for you
• Not limited to only therapists who take your insurance
• If you have already met your out-of-network deductible and/or out-of-network out-of-pocket maximum, it might be a more economical choice
• Might be able to find a therapist to see you more quickly
• Your therapist may be able to offer you a sliding scale (adjusted rate)

Cons of Out-Of-Network

• Insurance reimbursement can be frustrating or slow
• Insurance can still deny your claims or request more information
• It may cost more per session than an in-network provider

Pros of In-Network

• Typically costs less
• Provider bills insurance directly

Cons of In-Network

• Therapists in-network may not have immediate availability to see you
• You may not have as wide an array of choices for a therapist
• If you haven’t met your in-network deductible or out-of-pocket maximum yet, you may still have to pay a large fee per session until you meet your deductible
• Insurance has more influence over course of treatment
• Insurance may request or audit your treatment records
• Insurance may deny “medical necessity” for services
• Your therapist can’t easily offer you a sliding scale (adjusted rate) if they are on your insurance panel

If you’re wondering why I don’t bill insurance directly, or want to hear my case for choosing a private pay therapist, I wrote about that here: “Why I’m a private pay therapist and how that might benefit you.” And if you’d like to talk about whether therapy with me is right for you, schedule a free consultation.