Is it Ethical to be an Out-of-Network Therapist?

Key Takeaways

• No national organizations or state licensing boards require you to accept insurance.
• Most codes of ethics recommend doing pro bono work, but it’s not a requirement.
• Running a private pay practice can help clients by putting accessibility and affordability in your hands.

Running an out-of-network practice can increase revenue, give you more professional freedom, and even help to prevent burnout. But is it ethical?

Refusing to accept insurance does not violate the ethics codes of any national professional organizations for therapists, counselors, social workers, or psychologists. And it does not violate the ethics codes of any state licensing boards.

Some ethical codes do include recommendations for making therapy more affordable, however. The specific language for each organization is included below.

In the end, the decision to accept insurance is yours alone to make. It will be guided by your personal beliefs and goals. The final section of this article includes some points to consider when weighing the pros and cons of running an out-of-network practice.
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Does running an out-of-network therapy practice violate ethics guidelines?

No national professional organizations for mental health workers require you to accept insurance. Their ethics codes are focused on competency and conduct:

• Competency is your capacity to work in a clinical setting and provide your clients with a suitable level of care.
• Conduct is your behavior as a clinician, which must promote the rights, dignity, and wellbeing of your clients.

Outside of competency and conduct, they do not dictate how you run your business. It’s outside the purview of these ethics codes to determine precisely how much you charge or whether you accept insurance.

Here’s a closer look at the ethics codes for four major organizations:

• The American Psychological Association (APA)
• The American Counseling Association (ACA)
• The National Association of Social Workers (NASW)
• The American Association for Marriage and Family Therapy (AAMFT)
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APA ethics and private pay practice

The APA’s Ethical Principles of Psychologists and Code of Conduct does not mention affordable fees, sliding scale, or insurance participation anywhere in its enforceable standards.

It does recommend as one of its General Principles that “Psychologists strive to contribute a portion of their professional time for little or no compensation or personal advantage.”

This General Principle is aspirational, not enforceable. Meaning, it encourages you to do pro bono work for the good of society. Whether you do so, and to what extent, is your own choice.

The one enforceable section of the Code of Conduct regarding fees is “Standard 6.04: Fees and Financial Arrangements.” It says:

(a) As early as is feasible in a professional or scientific relationship, psychologists and recipients of psychological services reach an agreement specifying compensation and billing arrangements. 
(b) Psychologists' fee practices are consistent with law. 
(c) Psychologists do not misrepresent their fees. 
(d) If limitations to services can be anticipated because of limitations in financing, this is discussed with the recipient of services as early as is feasible.

None of these points require you to accept insurance or even set affordable fees. Line (d) specifies that if financial limitations will prevent a client from accessing therapy, you should discuss it with them. But you’re not required to change your fees or billing in order to make your services more affordable.
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ACA ethics and private pay practice

The ACA Code of Ethics does not require you to accept insurance or set affordable fees.

In the introduction of Section C, it recommends that counselors provide pro bono publico services for the good of society: “Counselors are encouraged to contribute to society by devoting a portion of their professional activity to services for which there is little or no financial return (pro bono publico)."

Note that counselors are encouraged, and not required, to do this work.

The only enforceable part of the code regarding fees, “Standard A.10.c Establishing Fees,” says:

In establishing fees for professional counseling services, counselors consider the financial status of clients and locality. If a counselor's usual fees create undue hardship for the client, the counselor may adjust fees, when legally permissible, or assist the client in locating comparable, affordable services.

Counselors may adjust their fees, at their own discretion, to help clients faced with financial hardship. It’s a recommendation, not a duty. And the Code does not require you to accept insurance.
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NASW ethics and private pay practice

The NASW Code of Ethics addresses affordability in two places—once aspirationally, and once as a requirement.

In the Ethical Principles section, "Social workers are encouraged to volunteer some portion of their professional skills with no expectation of significant financial return (pro bono service)."

As with the ethical codes of the APA and ACA, pro bono service is a recommendation, not a duty.

“Standard 1.13(a): Payment for Services” is the NASW’s one enforceable standard for making treatment affordable:

When setting fees, social workers should ensure that the fees are fair, reasonable, and commensurate with the services performed. Consideration should be given to clients' ability to pay.

So, social workers have a genuine professional duty when setting fees to factor in clients’ ability to pay. But there is no requirement to use a sliding scale or accept insurance. 
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AAMFT ethics and private pay practice

Similarly to the APA, ACA, and NASW, the AAMFT Code of Ethics includes one aspirational and one enforceable standard regarding fees.

One section of the Preamble, “Commitment to Service, Advocacy, and Public Participation,” says:

Marriage and family therapists are defined by an enduring dedication to professional and ethical excellence, as well as the commitment to service, advocacy, and public participation. These commitments… promote equitable access to the mental healthcare marriage and family therapists provide. As systemic clinicians, marriage and family therapists embody these aspirations by participating in activities that contribute to a better community and society, including devoting a portion of their professional activity to services for which there is little or no financial return. 

This section is aspirational—not enforceable—and recommends AAMFT members do pro bono work.

On the other hand, “Standard 8.2: Disclosure of Financial Policies” is enforceable:

Prior to entering into the therapeutic or supervisory relationship, marriage and family therapists clearly disclose and explain to clients and supervisees in writing: (a) all financial arrangements and fees related to professional services, including charges for canceled or missed appointments; (b) the use of collection agencies or legal measures for nonpayment; and (c) the policy of obtaining payment from the client, to the extent allowed by law, if payment is denied by the third-party payor.

This standard is only concerned with transparency, not billing methods or rates. It does mention insurance in section (c), but not as a requirement to accept insurance. Instead, AAMFT members are to notify clients of payment collection policies in the event third-party payors (including insurance) deny claims.
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Licensing board ethics codes and private pay practice  

Most state licensing boards adopt their ethics codes from one of the organizations covered above—the APA, ACA, NASW, or AAMFT. As a result, these licensing boards do not require their members to accept insurance or set sliding fees. And they do not require members to set affordable rates beyond what is required by the relevant ethics code (eg. in the NASW’s Code).

Some licensing boards do include their own professional standards in addition to ethics codes from national organizations. And some—like Ohio and Minnesota—issue their own ethics codes. But a survey of licensing board ethics guidelines in all 50 states reveals that none of them require members to accept insurance.

The only fee- and insurance-related language included in licensing board ethics codes has to do with defrauding insurance or misrepresenting fees to clients.

For instance, the Ohio Administrative Code requires mental health workers to document fee arrangements in client records and to disclose fees before billing. It also prohibits them from billing for services not rendered.

As another example, the Illinois Administrative Code prohibits insurance fraud and fee-splitting. But it does not require mental health workers to accept insurance.

Is it morally wrong not to accept insurance?

Think of ethics as a code of conduct set by an outside organization. That includes your state licensing board for therapists.

And think of morals as your own personal, internal compass for determining between right and wrong. 

As a therapist, you are not ethically required to accept insurance. But morally—based on your own ideals, mission, or sense of obligation—it might be a different story. 

Many therapists who worry about the ethics of not accepting insurance are really worried about morality. They’re concerned that, by running a private pay practice, they would violate their own morals. 

Ultimately, the decision is up to you. But it’s worthwhile to look objectively at the myths about private pay practice, as well as the pros and cons of going out-of-network. 

You might also want to consider the ways running a private pay practice can actually help clients. And try to remember: Making therapy more accessible is not your burden alone to bear.
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How private pay therapy can help clients

Running an out-of-network practice means some clients who rely on insurance won’t be able to afford your services. But there are also positive points to running a private pay practice that can benefit clients.
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Private pay may be necessary for you to keep saving clients

If you can’t build a sustainable practice, you can’t keep practicing. And if you can’t keep practicing, you can’t continue to help clients.

Sustainability applies both to finances and to your personal capacity to work.

Low reimbursement rates, denied claims, and extra administrative duties are some of the top reasons therapists decide to go out-of-network. These all put a drain on your business—reducing your revenue and eating up time—and, depending on the specifics of your practice, they can add up to death by a thousand cuts. For some therapists, going the private pay route is the only means of staying in business.

You also need to consider your own mental health. Burnout is real. Low compensation, overwork, and lack of control over how you practice therapy all contribute.

When you’re barely scraping by as a private practice therapist, struggling to make ends meet, burnout begins its slow creep. And if your clinical decisions are partly dictated by insurance companies, you may feel like your private practice is not entirely your own.

For many therapists, going out-of-network means higher income, more freedom, and the ability to stay in private practice longer. Ultimately, that benefits the clients who need your help.
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Private pay lets you treat clients insurance won’t help

In many cases, a client needs to be formally diagnosed with a mental health condition before their insurance will help cover the cost of therapy. And even if they do have a formal diagnosis, some clients seek treatment types that their insurance won’t cover.

As a private pay therapist, you can focus on helping those individuals. You’re not restricted by what insurance companies consider to be valid conditions or treatment types. It gives you the freedom to choose whom you treat, and how, and allows you to help provide clients the type of therapy they want and need.
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Private pay puts affordability in your hands

It’s typical for a contract with an insurance company to restrict your ability to offer sliding scale fees or pro bono sessions. Violating your contract can get you kicked off an insurance panel.

As a result, it’s the insurance company that decides what you’re allowed to do to make therapy more affordable for clients. And it’s the insurance company that sets the terms for how much individuals pay out-of-pocket in the form of deductibles and copays.

When you operate out-of-network, the power to make therapy affordable is in your hands. You can offer sliding scale rates on your own terms, and provide pro bono services at your discretion. And you can take extra steps, like using ThrizerPay, to make therapy more accessible to clients with out-of-network benefits.
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Remember, it’s not just about you

Beyond your choice whether or not to accept insurance, broader structural issues make therapy inaccessible to many individuals, including:

• The rising cost of living
• The limited scope of public support systems (including Medicare and Medicaid)
• The increasing cost of ACA Marketplace plans

Insurance companies themselves play a role. The cost of premiums, claims denials and clawbacks, and low reimbursement rates for practitioners all impact which clients are able to afford therapy and which practitioners are able to accept insurance.

For the most part, these factors are beyond your control. Which doesn’t mean that you shouldn’t take personal steps to try and make therapy more accessible to clients—only that you should aim to maintain a realistic perspective.

Trying to shoulder the burden yourself can leave you emotionally bogged down and professionally burnt out. It can lead to shame-driven, limiting beliefs about money that prevent you from building a sustainable practice and fairly compensating yourself. 

Focusing on the small ways you can help—like sliding scale fees and extra support for out-of-network benefits—helps to preserve time and energy that you can devote to advocating for broader structural change.
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Summary

• No national organizations for mental health workers require their members to accept insurance.
• Most state licensing boards adopt codes of ethics from national organizations.
• There are no state licensing boards that state in their codes of ethics that mental health workers are required to accept insurance.
• Private pay practice can help clients by giving you the freedom to set sliding scale fees, offer pro bono sessions, and provide treatment not covered by insurance.
• You can run an out-of-network practice while still advocating for structural changes that make therapy more accessible.

Still on the fence about private pay? Check out The Pros and Cons of Being an Out-of-Network Therapist. 

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‍‍‍‍This blog post is provided for informational purposes only and is not intended as legal, business, medical, or insurance advice. Laws relating to health insurance and coverage are complex, and their application can vary widely depending on individual circumstances and state laws. Similarly, decisions regarding mental health care should be made with the guidance of qualified health care providers. We strongly recommend consulting with a qualified attorney or legal advisor, insurance representative, and/or medical professional to discuss your specific situation and how the laws apply to you or your situation.