Why Mental Health Providers Stop Taking Insurance
Insurance is supposed to make mental health care more accessible. But for many providers, accepting insurance means navigating a growing list of administrative barriers that can make care harder to provide.
These barriers are not always obvious to patients. They may show up as documentation requirements, confusing billing documents, delayed authorizations, or provider directories that look useful but do not lead to actual care.
None of these are just paperwork problems. Each one can affect whether patients receive treatment, whether providers continue accepting insurance, and whether families can trust that their coverage actually works when they need it.
Insurers Are Asking Psychiatrists to Explain Why Therapy Is Medically Necessary
One growing concern involves insurance requirements around psychiatry visits that include both medication management and psychotherapy.
For prescribers, it is common to bill an evaluation and management service along with a psychotherapy add-on code when therapy is provided during the same visit. The clinical note already needs to make clear that both services occurred and that the psychotherapy portion was distinct.
The problem is when insurers go a step further and require the medical record to support that both services were medically necessary.
That may sound reasonable at first. But in practice, it can mean psychiatrists are being asked to repeatedly justify why therapy was appropriate for a patient receiving mental health treatment.
Therapy is often part of gold-standard mental health care. For patients being treated for depression, anxiety, trauma, or other psychiatric conditions, therapy is not an unusual extra. It may be central to the treatment plan.
That is why this kind of requirement matters. If insurers make it more burdensome to document and bill for therapy, some prescribers may provide less therapy, stop billing for it, or decide that accepting insurance is no longer sustainable.
The administrative burden does not stay administrative for long. It can change the care patients receive.
Image: Unsplash
Confusing EOBs Can Put Providers and Patients at Odds
Another issue comes up when out-of-network providers try to help patients use their insurance benefits.
Many out-of-network practices give patients a superbill so they can submit claims to insurance themselves. But some providers go a step further and submit those claims electronically on the patient’s behalf. That can be helpful because many patients never submit superbills, even when they are entitled to reimbursement.
The problem is what happens when the Explanation of Benefits, or EOB, creates confusion.
In an out-of-network situation, the provider charges their fee, the insurer may reimburse part of the claim, and the patient is responsible for the remaining balance. But some providers have seen EOBs that make an out-of-network visit look more like an in-network claim, showing the patient a much smaller responsibility than what they actually owe.
That leaves the provider in a bad position.
The patient has a document from their insurance company suggesting they owe one amount. The provider then has to explain that the patient actually owes more because the provider is out of network and did not agree to the insurer’s allowed amount.
This turns a billing document into a trust problem. The patient is confused. The provider looks like the bad guy. And if the insurer acknowledges the issue but does not send a corrected EOB, the confusion remains.
For providers, the lesson may be: trying to help patients by submitting out-of-network claims can create more confusion than simply handing them a superbill.
For patients, the result is more uncertainty about what their insurance actually covers.
Image: Unsplash
Single Case Agreements and Ghost Networks Show the Gap Between Coverage and Access
The most serious version of this problem appears when patients need a single case agreement.
A single case agreement can allow a patient to keep seeing an out-of-network provider when there is a strong reason to do so, such as continuity of care or the lack of an appropriate in-network option.
This matters when a patient changes insurance after already making progress with a provider. Without a single case agreement, treatment can be interrupted even when the patient is doing well and wants to continue care.
But getting that agreement can become a fight.
RipsyTech CEO Tom Tarshis, MD, a child psychiatrist and longtime private practice owner, recently described an experience working with an insurance company on a single case agreement for a family whose coverage had changed. The patient had already been receiving care and making progress. The goal was to preserve continuity of care with the provider who knew the case.
Instead, the process dragged on.
The insurer pointed to a list of in-network providers. On paper, that may sound like access. But when the list was reviewed, many of the options were not realistic. Some were too far away. Some were not the right specialty. Some did not provide the needed type of care. Some were not actually available to see new patients (or pick up the phone).
That is the problem with ghost networks.
A ghost network is a provider directory that looks adequate but, in reality, is a list of providers that are unavailable, unreachable, or even newly out-of-network. The insurer can say there are providers available, while the patient still cannot find appropriate care.
This is especially damaging in mental health care. If a patient needs a child psychiatrist, a list of general providers is not enough. If the patient needs in-person care, a telehealth-only option is not enough. If the listed provider is not taking patients, that is not access.
In this case, the process took months. During that time, care was interrupted, and progress was at risk. Even after authorization was eventually granted, the agreement did not fully solve the issue because the number of approved visits was far lower than what the patient’s treatment required.
That is the heart of the problem: coverage on paper does not always mean care in real life.
Image: Unsplash
Conclusion
These insurance issues may look separate, but they point to the same larger problem.
Psychiatrists are being asked to justify standard therapy. Out-of-network EOBs can confuse patients about what they owe. Single case agreements can become prolonged battles, especially when insurers rely on ghost networks to claim that care is available.
For mental health providers, every added layer of friction makes insurance harder to accept. For patients, every delay or confusing document makes care harder to access.
That is why these problems matter. They are not just administrative headaches. They affect whether patients can continue treatment, whether providers can sustainably accept insurance, and whether mental health coverage actually works when people need it.
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