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, some HMO plans set a cap of 20 counseling sessions per year, while other insurance plans offer unlimited counseling sessions.

Choice of Counselor
The most common way to choose a counselor is through the advice and recommendation of respected friends, family, and colleagues.  The BCA website is designed to introduce you to each Clinician, so you may make an informed request for a specific counselor.  It happens occasionally that the Clinician you wish to see may not be taking on new clients at the time of your call.  Our knowledgeable Administrative staff will be happy to provide you with alternative options that will fit your needs.

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 an insurance 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.  If a co-pay is due, it is collected at each session during the check-in process.

The deductible is a fixed amount that the client or responsible party must pay out of their own pocket before the insurer will reimburse the provider.  Deductibles vary significantly from plan to plan and can range between $200 to $6,000 per calendar year.   

In-Network Providers
Insurance companies 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 and were accepted into the network.  It cannot be assumed that a provider of service is in-network or out-of-network simply because of their quality of care standards.

Some insurance plans require a Mental Health Professional or your Primary Care Physician to get pre-certification before they can provide certain types of treatment.  For example, various psychological and neuro-psychological testing often requires pre-certification.  In most cases, reimbursement will be denied if services are not pre-certified.

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 their own 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.