The Therapy Business Podcast

Negotiating Insurance Reimbursement Rates

• Craig Dacy • Episode 40

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Therapists often hit a ceiling with insurance reimbursements, unaware they can proactively request rate increases to boost their income without adding more clients. We explore a step-by-step process for negotiating higher rates with insurance providers, including specific strategies to showcase your professional value and expertise.

• No insurance company will voluntarily offer you a rate increase—you must be proactive
• Call your provider first to learn their specific process for requesting increases
• Create a formal letter highlighting new credentials, specializations, and increased value
• Include specific financial challenges like inflation's impact on your practice costs
• Request specific amounts ($20 more per session or 10-15% increase) for each CPT code
• Make rate increase requests part of your regular business rhythm (every 6-12 months)
• Persistence is key—if rejected, try again every few months as circumstances change

Head to www.therapybusinesspod.com to learn how our team can help organize your practice finances and support your growth.

Reimbursement Letter Template

Other sources:

Simple Practice Blog by BARBARA GRISWOLD, LMFT

Meet with one of our coaches



*Intro/outro song credit:
King Around Here by Alex Grohl

Speaker 1:

If you accept insurance for your therapy, you know firsthand how frustrating it is when rates don't increase. Your reimbursements kind of get stuck and you hit the ceiling and, no matter what you do, it just feels like you're capped out on how much you can earn. Well, too often we find that therapists are not actually seeking out rate increases and in fact, many don't even realize that it's something they can do. Today, I'm going to walk you through how to ask your insurance providers for rate increases so that you can start making more from them. My name is Craig and I'm the owner of Daisy Financial Coaching. Our team is on a mission to make your therapy practice permanently profitable. If you own a solo or group practice, we're here to help you build a business that creates more time, makes more money and serves more people. This is the Therapy Business Podcast.

Speaker 1:

I remember years ago we were with an auto insurance company a really popular one, and we've been with them for a really long time and we just noticed that the cost of our insurance was just getting higher and higher, and I was, like you know, it's been a while since we've shopped quotes, and so we did. I shopped some quotes and I ended up finding a provider who was going to give us the same level of coverage for almost half the monthly fee. And so we signed up with them and we went to cancel the old one. And of course, I get a call from someone with that insurance company and they're going hey, we saw that you're canceling, can you tell us why? And I told them it's because it just got too expensive, and they go well. Actually it turns out we found out that there is a discount for you because you're in the state of Texas, and so we can drop your rate in half. And I was like, why didn't you call and tell me this, or why was this not something you reached out to do on my behalf? So because of that, I ended up leaving.

Speaker 1:

Now, the reason I share this story is because I want to reiterate and just highlight the fact that no one is going to call you and offer you a rate increase and we're thinking about you getting more money, reimbursements from providing your therapy practices. Most likely they're not going to reach out to you and say, hey, we're going to start paying you more for doing your service. Sometimes they will. Sometimes they will go ahead and do that, but not as frequently and likely not as much as we would like. That's what I learned from this insurance company myself was they weren't going to call me. I would have kept paying them too much forever probably, before they finally, until I would have realized that now I would have had to ask for a reduced rate.

Speaker 1:

So, as I'm walking you through this process, really the key here is being proactive. Most of the practices we work with don't even know that they can ask for a rate increase, that they can reach out to insurance companies, and this is something we recommend doing, probably a couple times per year, depending on your success rate. So I would say annually, reach out to the ones. If they've given you raises, reach out again in a year and try again. It does not hurt to ask. That is kind of the theme for today is it doesn't hurt to ask? The worst they can say is no and you stay at the current rate that you're getting reimbursed. But if you are taking multiple insurance companies, the likelihood that at least one or two of them will give you the increase that you ask for is pretty good, and so I highly recommend doing this Now. If they say no, putting it into your system and rhythm of every three to six months. Maybe you're trying again. You're asking again because it may just depend on who you speak to.

Speaker 1:

There's a lot of different factors, so let's dig into. How do we go about getting this rate reimbursement increase from your insurance providers. So, first of all, what we want to do is probably call and reach out and talk to somebody on the phone first. Each insurance provider is going to have somewhat of a different process, so I'm a big fan of talking to someone and letting them know hey, I'm looking to get a reimbursement increase, a rate increase. What's that process look like? Who do I need to talk to? Where do I need to submit something formally in writing? Get to know them. What is their process for increasing rates for their providers? Now, most of the time probably all of them at least, or most likely, if not most of them are going to require you to submit it in writing.

Speaker 1:

Sometimes, if you get someone on the phone, you might be able to start that conversation. They might be able to ask you some questions, things that you would include in the formal letter that you're going to send in. But at least getting to talk to a human being and figure out what does this process look like? What does the timeline look like? What can I expect? What kind of information would help me get this increase? Again, the more specific we can get to each provider, the better. So look into who is the relationship person, who is the person that you could talk to with Cigna or with Aetna, or with Blue Cross, blue Shield, where you can ask these questions.

Speaker 1:

Then we're going to need to prep a letter and when you talk to this person, ask where do I send this request to? Where would I send a letter of increase to? And so get that information from them, whether it's email, whether it's hard copy, snail mail, find out where to send it Now in your letter. There is a fantastic template that I found on therathinkcom. I'm going to link it in the show notes because, on this blog post they created, it encourages you to just copy paste and tweak it to your needs, and so, instead of reinventing the wheel, I always think it's best to take advantage of those things. So I will link this blog post where you can snag some of this copy paste templated letter. But I'm gonna guide you through some of the key elements of what is important to have in one of these rate increase letters.

Speaker 1:

So, first of all, we wanna go through who you are and why you're asking for this increase. Usually, what we wanna highlight is what are your credentials Like? What is it about you that is making you valuable? There's a good chance. Maybe you've added some different tools to your toolkit since you started working with this insurance provider. Have you gotten any new certifications? Have you gone through any new continuing education trainings? Is there anything that you have done to enhance your craft or make you more valuable since you last Asked for a rate increase or since you started working with that insurance provider? Highlight these things. What credentials have you added? What acronyms have you added to the back of your name? What are the key elements, the key things about you that might make it seem worthwhile to give you a rate increase? How long has it been since you've asked for a rate increase? You've even gotten one.

Speaker 1:

I think it's important to highlight this. When's the last time you received a bump from them? If ever, maybe you've been with them for five years and you've never gotten a pay bump from them. How long have you been with them in general? So highlighting that I've been a you know, a partner of yours since this time. So the more longevity we have. If you've been with them, if you're getting a ton of business from them, if you're serving a lot of their clientele, then that's a relationship that they're going to likely want to nurture, be more likely to nurture. So highlighting those relationships. We've been together for X number of years.

Speaker 1:

I haven't had a rate increase in this timeframe, really honing in on those pieces, but I'm a big believer in highlighting your value. Why are you more valuable now? Why do you deserve a rate increase? Is there any specialty areas that maybe you serve in that not every therapist does? There's a ton. There's a long list of different things you can serve in that might be valuable to them. But you know ADHD, trauma, ptsd, maybe you work with adolescents or kids, so things like that, if you do that, already highlight those things again. Maybe they don't know that you do serve these areas. Maybe you've added some in. Maybe you've hired team members who have specialties that you don't. So all of these elements that we can add in and really help our case, showing the value that we have. So to recap that, any new certifications or continuing education courses that maybe you've completed, how long has it been since you've received a rate increase? How long have you been working with this insurance provider? And then, any specialty areas that you specialize in that you're an authority in that you can highlight, to show these are key ways that we can better serve your customers who are coming to us for therapy.

Speaker 1:

So, highlighting this, this is just an opportunity for you to showcase you and why you deserve a pay raise. This is just like if you were to step into a boss's office. You're working a nine to five and you're going to step into your boss's office and ask for a pay raise. You're not just going to go in there and say I want more money just because I want more money because I've been here for a while. Yeah, I mean, you've been here for a while. That's helpful to know, but why are you more valuable now than what you were when we gave you this pay structure? How are you providing more value to them now? This is a great area to showcase that.

Speaker 1:

Next, it's okay to mention some financial challenges, maybe, that you're facing, so I would rather focus heavily on the value piece, but I also think it's important to highlight the world we're in now. I mean, inflation has been nuts over the past few years While it's starting to settle back down. If you didn't receive a rate increase over the past few years when inflation was peaking, then you are likely hurting from that. So let's say inflation was increased by 5% but you didn't receive a bump in what your reimbursement rate is. That means you've lost 5% of your hourly rate because your costs have increased without your income increasing in relation to it. So we need to be really key on that. Honing on that. If you haven't received a rate reimbursement since before the pandemic, I highly recommend highlighting the pandemic, talking about the effects of the pandemic and the again the inflation rate afterward on you and your practice, and that you're getting paid the same amount you were before all that stuff happened, and so it's really key to hone in on some of those factors.

Speaker 1:

I wouldn't necessarily go into your financial woes, your financial troubles, but highlighting that your overhead is increasing. Therefore, we need our income to increase in what we are receiving per therapy session or per hourly session. So, getting into the effects, the financial challenges that maybe you're facing on that back end, why do we need this on that side of it? Okay, then we want to go into specifically asking for certain amounts. So in this letter we're going to go through and you're going to put the CPT codes of each area of focus that you do and what rate increase you're looking for. Now there's not necessarily a hard fast rule for what you should be asking for. I've seen a variety of different ones. Some are a percentage like. So maybe a 10% rate increase. I've seen some just say a good rule of thumb is $20. Ask for $20 more dollars per area of specialty you do so. I tend to err on the side of asking for more just because maybe they'll meet you in the middle. So let's just say you do a $20 rate, go through each of the things that you do, the different specialties you have, put the codes in and say we're requesting a rate increase of $20. So instead of being reimbursed a hundred, we want to be reimbursed $120 for this one. And then and moving down the list and putting specific amounts Again, if you prefer to do 10 to 15%, you can do that. But just highlighting specifically here's how much we would like to receive in return as a reimbursement.

Speaker 1:

Again, not guaranteed, kind of boils back to what I said at the beginning it never hurts to ask. It never hurts to ask for these things. So we've talked to someone on the phone. Then we're going to submit this letter and we're going to send it in to wherever they recommend putting it into. Again, I will link to a template so you can copy and paste. Get some really good wording in there. You can always go to your good old buddy chat GPT if you need help crafting one as well. But getting something really cohesive that's going to highlight all those areas that we just talked about.

Speaker 1:

Now, if you find that you're unsuccessful, if you get a lot of no's which is okay, you know, I mean, this is kind of like sales You're selling them on paying you more, so you're going to get some no's that's when I would try again. It doesn't hurt to continue to try. So every few months you already have the letter written up. This is also where, kind of going back to when you talk to that person, ask if there's anything that you could do to receive a rate increase. What are they looking for? What specific things would warrant them giving a rate increase, and they might tell you some things that you could turn around and maybe implement or look into to see is this worth doing to get that rate increase, but trying again every three to six months. Just put it in your calendar Once a year at least, sending out letters to everybody. Even if they've given you a rate increase within the last year Once again, it doesn't hurt to ask again a year later. The worst they say is no, and then you'll try again in a year. So making this part of your annual to semi-annual rhythm is going to be really, really important so that you can stay on top of it, so that you can continue to maximize what you're making.

Speaker 1:

Now. Of course, outside of this, if you find that you're just having no success, if you're getting minimal rate increases or you're getting a lot of no's maybe you only work with one or two insurance providers and both of them are just telling you to kick rocks right Then private pay is going to be your next best bet is trying to focus more on generating more private pay clients and balancing out the number of insurance clients you're taking versus the number of private pay clients. But here's what I recommend Try, go for it. If you haven't done it in a long time, lean into the things we just highlighted, draft up that letter and the beauty is in six months when you try it again, your letter is going to be drafted. So all you got to do is go in and tweak If you've added any new things, if you have any other points you want to hit on, and then you're good to go again.

Speaker 1:

So really, right now would be more of the upfront work. If you haven't done this before, get after it, shoot me an email. If you have some success, I would love to hear if you were able to take this, implement it and get a rate increase and start getting some more money back into your pocket for the amazing, valuable, life-changing work that you're doing for your clients. Thanks for joining us on the Therapy Business Podcast. Be sure to subscribe, leave a review and share it with a practice owner that you may know. If your practice needs help getting organized with its finances or just growing your practice, head to therapybusinesspodcom to learn how we can help.

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