Out-of-Network Therapy Explained: How Reimbursement Actually Works

If you’ve found a therapist you’d really like to work with, only to see the words “out-of-network,” you may assume that means your insurance won’t cover therapy at all.

Fortunately, that isn’t always the case.

Many health insurance plans include out-of-network mental health benefits, which may allow you to see a therapist who doesn’t participate directly with your insurance and still receive reimbursement for a portion of your therapy costs.

The confusing part? Figuring out exactly what your insurance company will pay.

Between deductibles, coinsurance, allowed amounts, superbills, and claims, understanding out-of-network therapy can sometimes feel like learning another language.

Here’s what out-of-network therapy actually means, how reimbursement typically works, and what to ask your insurance company before getting started.

What Does Out-of-Network Therapy Mean?

Health insurance companies contract with certain healthcare providers to create a network.

An in-network therapist has a contract with your insurance company and agrees to follow its negotiated rates and billing requirements.

An out-of-network therapist does not have that contract.

When you see an out-of-network therapist, you will typically pay the therapist directly for your sessions. If your insurance plan includes out-of-network benefits, you can then submit the therapy services to your insurance company and potentially receive reimbursement.

So, an important distinction is:

Out-of-network does not necessarily mean that therapy is not covered by insurance.

It means that your therapist isn't contracted directly with your insurance company and that payment and reimbursement work differently.

How Does Out-of-Network Therapy Reimbursement Work?

Although every insurance plan is different, out-of-network therapy reimbursement generally works like this:

1. You attend your therapy session.

2. You pay your therapist's fee directly.

3. A claim is submitted to your insurance company. This may involve submitting a superbill yourself or using a service that assists with out-of-network claims.

4. Your insurance processes the claim according to your specific out-of-network benefits.

5. If the service is eligible for reimbursement, your insurance company reimburses you directly.

This is different from many in-network arrangements, where you may pay only a copay or coinsurance amount and your therapist bills your insurance company for the remainder.

With traditional out-of-network therapy, you should generally expect to pay the therapist's full fee at the time of service and receive any applicable reimbursement afterward.

What Is an Out-of-Network Deductible?

Before calculating what therapy might actually cost you, you'll want to find out whether your plan has an out-of-network deductible.

A deductible is the amount you are responsible for paying toward eligible healthcare expenses before your insurance begins contributing according to your plan's benefits.

Your out-of-network deductible may also be completely separate from your in-network deductible.

For example, imagine that your insurance plan has:

• A $1,000 out-of-network deductible

• 70% coverage after the deductible is met

You may need to accumulate $1,000 in eligible out-of-network expenses before your insurance begins reimbursing you.

Once you've met the deductible, your plan may begin covering a percentage of eligible costs.

However, there is another important piece of the equation: the allowed amount.

Does 70% Out-of-Network Coverage Mean Insurance Pays 70% of My Therapy Fee?

Not necessarily.

This is probably one of the biggest misconceptions about out-of-network therapy reimbursement.

Imagine that your therapist charges $175 per session and your insurance representative tells you that your plan covers 70% of out-of-network therapy after your deductible.

It would be easy to calculate:

$175 × 70% = $122.50 reimbursed

But that may not be how your insurance company calculates your benefit.

Insurance companies may establish an allowed amount (sometimes described using terms such as eligible, recognized, reasonable, or usual-and-customary amounts) for a particular healthcare service.

If your therapist charges $175 but your insurance company determines that its allowed amount for that service is $150, your benefits may be calculated using the $150 allowed amount rather than the $175 you actually paid.

Your exact reimbursement depends on the terms of your individual plan.

This is why asking your insurance company, “What percentage do you reimburse for out-of-network therapy?” doesn't always give you enough information to estimate your actual cost.

What Is a Superbill for Therapy?

A superbill is a detailed document that contains information your insurance company may need to process an out-of-network claim.

A therapy superbill typically includes information such as:

• The therapist's name and professional information

• The therapist's National Provider Identifier (NPI)

• Dates of service

• The type of therapy service provided

• The amount charged

• Relevant procedure (CPT) codes

• A diagnosis code when required for insurance reimbursement

A superbill is not the same thing as reimbursement. It provides the documentation needed for your insurance company to process the claim.

Depending on the practice, you may receive superbills to submit yourself, or the practice may use a service that helps clients submit out-of-network claims electronically.

How Do I Check My Out-of-Network Mental Health Benefits?

Before starting therapy, call the member services number on the back of your insurance card and ask specifically about your:

“Outpatient, out-of-network mental health or behavioral health benefits.”

Try not to stop at simply asking whether you “have out-of-network benefits.”

Instead, ask:

• Does my plan cover out-of-network outpatient psychotherapy?

• What is my individual out-of-network deductible?

• How much of that deductible have I already met this year?

• Is there also a family deductible?

• What is my coinsurance after the deductible is met?

• How do you determine the allowed amount for an out-of-network psychotherapy session?

• Do I need prior authorization or a referral for outpatient therapy?

• Are telehealth sessions eligible for out-of-network reimbursement?

• How do I submit claims?

• Is there a deadline for submitting out-of-network claims?

• Is there a limit on the number of therapy sessions my plan will cover?

If possible, you can also provide the specific CPT code your therapist expects to use and ask your insurance company for an estimated allowed amount or reimbursement for that service.

Remember that an insurance company's quote of benefits is generally not a guarantee of payment. The actual amount is determined when the claim is processed.

What If My Insurance Doesn't Have Out-of-Network Benefits?

Not every insurance plan provides out-of-network coverage.

Some plans may only cover services from in-network providers except under specific circumstances. If your plan does not include out-of-network mental health benefits, you can still choose to see an out-of-network therapist, but you may be responsible for the full cost of treatment.

In that situation, therapy would essentially function as self-pay therapy.

Depending on your eligibility and plan rules, you may also be able to use HSA or FSA funds for qualifying mental health expenses.

Why Would Someone Choose an Out-of-Network Therapist?

Using an in-network therapist can make therapy significantly more affordable, and for many people, that is an important part of choosing a provider.

However, insurance participation is only one factor to consider.

People sometimes choose an out-of-network therapist because they are looking for:

• Specialized experience treating a particular concern

• A specific evidence-based therapy approach

• Greater provider availability

• Appointment times that fit their schedule

• A therapist who works with a particular age group or population

• A stronger therapeutic fit

This can be especially relevant when seeking specialized therapy for concerns such as OCD, eating disorders, body image concerns, anxiety, ADHD, trauma, emetophobia, or body-focused repetitive behaviors (BFRBs).

Ultimately, choosing a therapist involves balancing clinical fit, expertise, accessibility, and affordability.

Understanding your out-of-network benefits gives you more information to make that decision.

Out-of-Network Therapy at Temperance Psychotherapy

Temperance Psychotherapy is an out-of-network private practice. We do not participate directly with commercial insurance plans, and clients are responsible for the cost of sessions.

However, if your insurance plan includes out-of-network mental health benefits, you may be eligible to receive reimbursement for a portion of your therapy costs.

Temperance Psychotherapy can provide appropriate documentation for out-of-network reimbursement, and we also offer options designed to make navigating out-of-network benefits and claims easier for clients.

Because insurance plans vary significantly, reimbursement can never be guaranteed, and we recommend contacting your insurance company directly to verify your individual benefits.

If you've found a therapist who seems like a great fit but initially dismissed them because they're out-of-network, it may be worth checking your benefits before ruling them out.

You might have more coverage—and more options—than you realized.

Frequently Asked Questions About Out-of-Network Therapy

• Does out-of-network mean insurance won't cover therapy?

  No. If your health insurance plan includes out-of-network mental health benefits, your insurance company may reimburse you for a portion of eligible therapy expenses. Some plans, however, do not include out-of-network coverage.

• How much does insurance reimburse for out-of-network therapy?

  It depends entirely on your insurance plan. Your reimbursement may be affected by your out-of-network deductible, coinsurance percentage, your insurance company's allowed amount for the service, and other plan requirements.

  For example, having “70% out-of-network coverage” does not necessarily mean your insurance company will reimburse 70% of your therapist's actual fee.

• Do I have to meet a deductible before getting reimbursed for therapy?

  Often, yes. Many plans require you to meet an out-of-network deductible before reimbursement begins. Your out-of-network deductible may be different from your in-network deductible, so it's important to verify both with your insurance company.

• What is a superbill for therapy?

  A superbill is a detailed document containing information your insurance company may require to process an out-of-network therapy claim, such as dates of service, fees, provider information, procedure codes, and diagnosis information.

• Do out-of-network therapists bill insurance?

  It depends on the therapist and practice. Some provide clients with superbills to submit independently, while others use services that assist with electronic out-of-network claim submission. With traditional out-of-network therapy, clients generally remain responsible for paying the therapist's fee regardless of whether or how much their insurance ultimately reimburses.

• Can I use my HSA or FSA to pay for out-of-network therapy?

  Mental health treatment may qualify as an eligible healthcare expense for HSA or FSA purposes. Because eligibility and documentation requirements can vary, check the rules of your specific plan.

• Is out-of-network therapy the same as self-pay therapy?

  Not exactly.

  With both arrangements, you may pay your therapist directly. However, if you have out-of-network insurance benefits, you may be able to submit eligible therapy expenses to your insurance company for partial reimbursement.

  If you don't have out-of-network benefits—or choose not to use your insurance—you're generally paying entirely out of pocket.

• How can I find out what I'll actually pay for out-of-network therapy?

  The best starting point is to contact your insurance company and ask about your outpatient out-of-network mental health benefits, deductible, coinsurance, and the allowed amount for the therapy service you'll be receiving.

  Your therapist can tell you their fee, but only your insurance company can determine how a claim will be processed under your specific plan.