Bethlehem Counseling Associates - Mental Health Insurance Glosary of Terms

Understanding Your Mental Health Insurance

Mental Health Insurance Glossary of Terms

Annual/Lifetime Cap:

The maximum amount of money your insurance company will pay for certain mental health services over a calendar year or a lifetime. This “cap” may be stated as a number of counseling sessions or a dollar amount. For example, many HMO plans set a cap of 20 counseling sessions per year.

Choice of Counselor:

The most common way to choose a counselor is through the advice and recommendation of respected friends, family, and colleagues. Unfortunately, with PPO and HMO plans, the recommended counselor may not be “in-network” and you may not be able to work with the counselor that was your “first choice.” The problem of designated “in-network providers” has a great effect on your ability to select the counselor you desire.

Confidentiality:

One of the greatest concerns in submitting for insurance reimbursement is the issue of confidentiality. Although HIPPA regulations (Privacy of Records) have brought major reform to this area, it is still a strong concern. When a diagnosis or treatment plan is submitted to your insurance company, there is no way to know who has access to this data and if this data is placed in centralized data banks. An example of the problems in this area is the situation where a former client applies for life insurance or disability insurance and is forced to sign a release of information so that the prospective insurer can gain access to their counseling records. The issue of confidentiality has not adequately been regulated in the insurance industry.

Co-Pay:

When a PPO or HMO plan requires the client or responsible party to pay a certain dollar amount of the providers fee, the amount paid by the client or responsible party is labeled as the co-pay.

Deductible:

The deductible is a fixed amount that the client or responsible party must pay before the insurer will reimburse the client, responsible party, or provider. Deductibles vary significantly from plan to plan and can range between $200 to $1,000 per calendar year.

Determining a Treatment Plan:

In HMO plans, a case worker at the insurance company will have the final authority to determine the number of sessions you are allowed and the ability to continue services with your counselor. It is a problem to have someone outside the client-counselor relationship determine the quality of care. If you use HMO insurance plans, it is critical to be aware of the importance of the insurance reviewer in determining your treatment plan.

In-Network Providers:

PPO and HMO plans contract with certain providers to be designated as “in-network providers.” Counselors may be selected to join a network because they accept low fees, because they have a particular specialty, or because they applied to the network when it was being created. It cannot be assumed that a provider of service is in-network or out-of-network simply because of their quality of care standards.

Primary Care Physicians (PCP):

In most HMO plans you must contact your PCP to receive permission to obtain mental health services. The PCP can provide you with a list of counselors who are in-network.

Precertification:

In most HMO plans, the insurance company or the PCP must precertify mental health services before you can go to the first counseling session. In most cases, reimbursement will be denied if services are not precertified.

Premium:

The premium is the fee charged by insurance companies to purchase their insurance coverage. Premiums are often shared between employers and employees with the amount of the employee share having increased over the past decade.

Responsible Party:

This term refers to the person responsible for payment when a client receives counseling services. Although the most common case is the situation where the client is the responsible party, there may be other situations. For example, if a child is the client, the parents may be the responsible party.

Reasonable/Allowable Fee:

This is a set fee established by the insurance plan as the maximum allowable charge for the client or responsible party reimbursement for a certain service. The term is used in determining reimbursement in the indemnity insurance plans. This reasonable/allowable fee does not limit the amount the provider can charge for the service. It only affects the level of reimbursement.