In this episode of the Sit and Stay blog and podcast, we’re breaking down one of the most important (but often overlooked) factors in running a sustainable mental health practice: your payer mix.

It might sound like a dry accounting term, but understanding your payer mix could be the difference between burnout and balance, between surviving and scaling.

Why Your Payer Mix Matters in Private Practice

Your payer mix refers to the breakdown of where your practice’s revenue comes from, whether that’s different insurance companies, out-of-network billing, private pay clients, or sliding scale discounts. It matters because not all payers reimburse at the same rate for the same service.

As Tom explains in the episode, if your practice relies too heavily on low-paying insurers like Medicaid, it could threaten your clinic’s financial stability.

“If 80% of your patients were Medicaid, there’s no way you could actually run a business successfully or pay yourself.”

That’s why even mission-driven clinics often cap the number of patients they accept from certain plans. Not to turn people away, but to preserve their ability to keep seeing anyone at all. High-paying plans can subsidize care for underfunded populations, enabling growth, hiring, and sustainability.

When to Cap Low-Paying Insurance Plans

So when does it make sense to cap an insurance plan?

If a plan consistently pays far less than others and puts your business at risk, limiting your intake is often necessary. But it’s not about maximizing revenue. It’s about staying open. As Tom puts it:

“We take more of the better-paying plans so we can afford to take some of the lower-paying ones.”

The key to fairness here is transparency. If you’re at capacity for a certain insurance, it’s okay to explain that the plan reimburses at a much lower rate. In some cases, you can even encourage the patient to speak with their HR department or insurer about better mental health coverage. As long as you're honest and mission-aligned, you're not being unethical. You're being responsible.

Balancing High Reimbursement with Equity and Access

Some providers may consider leaning heavily into high-paying insurers. And that’s not a bad instinct, especially when you’re growing or trying to support a team.

But there are trade-offs. Focusing only on the best-paying plans can reduce access for underserved communities and make you vulnerable if one of those plans suddenly changes its policies.

The better approach? Strategic balance:

Use higher-paying plans to support low-reimbursing care
Cap (but don’t cut) plans that pay poorly
Be transparent with patients about coverage
Advocate for systemic changes to reimbursement policy

“We’re not taking better-paying plans to give ourselves bonuses. We’re doing it so we can keep helping more kids.”

Should You Accept a Wide Range of Insurance Plans?

Casting a wide net by taking multiple insurance plans can help reduce short-term risk and keep your schedules full, especially for intensive programs or new hires.

“The worst-paying patient is the one you’re not seeing.”

However, too many plans can lead to admin overload and limit your ability to negotiate better rates.

Tom recommends:

Joining poor-paying plans only when they dominate your local market
Considering using single case agreements instead of signing long-term contracts
Tracking each plan’s performance using dollar per RVU or similar metrics

Casting a wide net is useful, but only when paired with careful tracking and a clear long-term strategy.

How to Re-Evaluate Insurance Contracts Over Time

Insurance contracts aren’t “set it and forget it.” Your reimbursement landscape will change—and your payer mix should too.

Tom suggests reviewing plans regularly to determine whether they:

Support your financial goals
Fill schedules consistently
Offer room for rate negotiation

If a plan isn’t working, you have options:

Pause new intakes while keeping the contract active
Terminate the contract and pursue single case agreements
Push for higher rates during yearly re-negotiations

“You don’t need to accept every plan forever.”

And in many cases, you shouldn’t.

Mental Health Business Moment of the Week

In this week’s business moment, Tom shared a frustrating experience navigating local zoning regulations after expanding his clinic into a new office suite.

Despite the building being filled with therapy practices and the previous tenant also using the space for therapy, the city denied a business license because the prior occupant hadn’t officially registered it as such. As a result, Tom now has to go through a six-month zoning process just to legally use the space for the same purpose it’s already been serving.

It’s a reminder that local bureaucracy can create unexpected barriers to growth, even for well-established practices, and that licensing and zoning issues are just as critical to consider as financial ones when expanding your business.

Final Thoughts on Building a Sustainable Payer Mix

Managing your payer mix is not just a billing decision. In fact, it’s a core part of running an ethical, sustainable, and mission-driven practice.

Whether you’re capping certain plans, negotiating new ones, or deciding how wide your net should be, the goal is to create a payer mix that supports both your values and your viability. It’s okay to say no. In fact, sometimes, it’s the only way to keep saying yes.

Have a question or topic you’d like us to explore? Contact us at sitandstay@ripsytech.com.

And don’t forget to subscribe to the Sit and Stay Podcast for more insights on running a thriving mental health practice.

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How to Manage Your Payer Mix as a Mental Health Provider