Katherine Streeter

State of Health Sponsored by

Become a KQED sponsor

When San Francisco resident Natalie Dunnege needed a therapist, she couldn’t find one who took her insurance.

“When I would call them they wouldn’t return my phone calls or they wouldn’t be accepting patients,” she says.

Insurance companies say there’s a shortage of therapists.

But it’s not that simple. Especially in urban areas, there are lots of therapists. They just don’t want to work with the insurance companies.

Take Michael Klein, a psychologist practicing in San Francisco for more than 20 years. He considers it his spiritual calling to help people calm their social anxiety and to help couples stop fighting and build trust.

“With the right kind of support, they blossom,” he says.

Klein doesn’t accept insurance — and he’s far from alone. Nearly half of therapists in California don’t take insurance, according to a recent survey from the California Association of Marriage and Family Therapists. The same is true of psychiatrists. There are two reasons why, Klein says.

“One, because the reimbursement rates don’t provide a living wage,” Klein says. “You can’t own a home and drive a car and survive on what in-network providers pay you.”

Most insurance companies pay therapists in their networks between $60 and $80 per session. In the Bay Area and Los Angeles, therapists say the market rate for therapy is more like $150 or $200 a session.

“The second thing is the paperwork. For an hour of psychotherapy you spend a half hour of paperwork. So, I got into this field because I don’t like paper work,” Klein says with a laugh.

On that first point — money — insurance companies acknowledge that they may have to raise their rates to attract more therapists, particularly in rural areas. But they also say it’s on therapists to compromise.

“I think it’s unrealistic to expect either the state of California taxpayers or for health plans to just pay providers whatever they ask to be paid,” says Charles Bacchi, CEO of the California Association of Health Plans, a trade group for the insurance industry.

“That’s not sustainable,” he continues. “So you’re either in the system, and you want to be part of our health care system. Or you want to do concierge service outside of it and just pretend our health care system doesn’t exist. That’s your choice as a provider. Our job is to find providers that are willing to be part of the solution and willing to provide coverage to those of low and moderate income.”

That’s exactly how San Francisco psychologist Jonathan Horowitz feels. He wants to take insurance. But he’s hit roadblock after roadblock. He sent out 10 applications to insurance companies and got nowhere.

“I might knock on Cigna’s door and say, ‘Hey are you guys accepting any new therapists in 94105?’” he says. “And they might say, ‘No we’re not doing that. We’re totally full.’”

Six different companies told Horowitz their networks were full.

So even though a patient like Natalie Dunnege might call seven therapists in her insurance network and not be able to get an appointment, insurance companies are telling new and willing therapists that there’s no demand for them.

“I definitely think it’s to control costs,” Horowitz says. “That’s very clear.”

He tried for a year, and one company finally said yes. Sort of. Horowitz never got a formal notice saying his clinic was admitted to the network.

“It was just like, ‘Oh wait, it looks like we’re suddenly getting a couple referrals from them. I wonder if we’re in their directory,’” he explains.

They were. Sort of. The clinic was listed in the directory. But the therapists who work at the clinic weren’t approved yet, meaning there was no one who was allowed to see the clients calling the clinic.

So Horowitz tried to call the insurance company to clear things up. He tried many, many times. Here’s what happened during his latest attempt to navigate the automated phone system:

Insurance company automated attendant: First I’ll need your provider identification number. If you need a moment, say, hold on.

Horowitz: Hold on.

Sound familiar? Turns out therapists get the automated run around as much as patients do. Horowitz persevered.

Insurance company: Okay, please say or enter your pin.

Horowitz: My pin? Is this my pin? (He enters a few numbers).

Insurance company: I’m sorry I couldn’t find an account using the info you gave me. Do you already belong to the network?

Horowitz: I think so?

Insurance company: Sorry, yes or no.

Horowitz: Um, I don’t know … yes?

Insurance company: Alright. And have you already requested a credentialing application?

Horowitz: Yes.

Insurance company: Sorry could you repeat that.

These experiences did not bode well from Horowitz’ perspective.

“Honestly, I got a really bad feeling about it,” he says.

He figured, if this is what it’s like just finding out if he’s in the network, how’s it going to be when he has a problem with a claim and can’t get paid?

“I could just see that getting out of hand really quickly,” he says. “So at that point we just said, do we really even want to do this?”

Not just that. The reimbursement rate was even lower than he expected, and the billing was so complicated that he was going to have to hire someone to do it. He says he couldn’t afford that.

“We made the decision that we’re just going to cancel the contract and continue to go with cash,” he says.

Easier said than done. Horowitz hasn’t been able to get through to anyone on the phone to cancel the contract. In the meantime, prospective patients are finding his name on the directory and are calling for appointments. Horowitz says he just has to say no.

Frustrated You Can’t Find a Therapist? They’re Frustrated, Too 2 June,2016April Dembosky

  • Pooky

    Don’t complain about paperwork. Use Dragon Medical (I do), it saves a lot of time.

  • kathleen

    Sadly, this same phenomenon happens in my profession too. In addition to the run around with the actual insurance companies, many insurance companies that offer acupuncture do so through third party companies. These third party companies make sure acupuncturists are in good standing and are licensed…which is public record–so basically these companies are unnecessary. These companies are notoriously difficult to work with so many seasoned acupuncturists refuse to spend the hours required to do the paperwork involved to get the small reimbursement. It is simply not worth the cost or energy of bill submission. Needless to say these third party companies take a fee. The patients lose out and the profession loses out.

  • John Bucholtz

    This is not only a CA problem; it is also a national one. And its causes are due to flawed mental health policy. We did away with robust community mental health in this country, we have never fully invested in parity between physical health policy and mental health policy, and health insurers continue to find creative ways to deny reimbursement. And please, do not blame the Affordable Care Act for this problem. A conservative Congress thwarted attempts at progressive reforms under President Clinton and then weakened the bill that Speaker Pelosi and President Obama were finally able to ratify into law. All of us “little guys” out there, from consumers to providers, can only change policy if we remove the current policy obstructionists, those defenders of corporate interests from public office. Register to vote and then vote this November.

  • solodoctor

    Insurance companies talk about the need for therapists to ‘compromise’ but what have they done in this regard? Executive salaries are exorbitant. United Healthcare resigned from some states in protest over Obamacare. Their profits declined from $4.2 billion to $2.4 billion in the first quarter. Yes, that is BILLIONS in just one quarter! Many insurance companies have not raised reimbursement rates in 10 years. Even with low rates of inflation that is still a significant cut in pay for therapists.

    As long as the healthcare system in the USA is based on a for profit model these problems will continue.

  • Emu Sanders

    A lot of plans and a significant number of exchange plans are PPO. The logic of “in or out” is flawed as members with PPO can chose a provider out of network and still have a portion of the fee covered. I see this as the way things will go until Insurance Plans reimburse closer to market rate. The Ins. Industry should also consider that therapy is much cheaper than other treatments or hospitalization which may become more needed the longer that care is delayed.


April Dembosky

April Dembosky is the health reporter for The California Report and KQED News. She covers health policy and public health, and has reported extensively on the economics of health care, the roll-out of the Affordable Care Act in California, mental health and end-of-life issues.

Her work is regularly rebroadcast on NPR and has been recognized with awards from the Society for Professional Journalists (for sports reporting), and the Association of Health Care Journalists (for a story about pediatric hospice). Her hour-long radio documentary about home funerals won the Best New Artist award from the Third Coast International Audio Festival in 2009.

April occasionally moonlights on the arts beat, covering music and dance. Her story about the first symphony orchestra at Burning Man won the award for Best Use of Sound from the Public Radio News Directors Inc.

Before joining KQED in 2013, April covered technology and Silicon Valley for The Financial Times, and freelanced for Marketplace and The New York Times. She is a graduate of the University of California at Berkeley Graduate School of Journalism and Smith College.