Therapists Talk 
Shrink Rap 


    Michael E. Holtby, LCSW, BCD


My Recovery from Managed Health Care

This article was originally printed in the Colorado Psychological Association Bulletin (Vol. IX, No. 1), January 1998, p. 7 & 13; and reprinted in the Colorado Social Worker, March/April, 1998, p.5, and in March 1998 for Janet Pipal's use in her training materials in her workshop, "Private Practice Sanity".

The first of March of 1996, when I was close to leaving (managed health care) M.H.C., but still ambivalent, I attended Janet Pipal's workshop, Private Practice Sanity. It was a great reinforcement, and I highly recommend it. I adopted several of her suggestions in my own recovery from a managed health care practice. It also lead to a supportive network of others who have gone before me.

To my surprise, it wasn't easy to leave M.H.C.! Many require ninety days notice, and others require that you continue on a contract basis with any clients currently seeing you. The result was I didn't finish up the last of my managed health contract cases until nine months after I initially gave notice. And they couldn't keep it straight. Bureaucracy bungled my claims worse than ever. I was denied claims because I was no longer a network provider, but required under the contract to continue. When claims were paid the benefit was often less, and I had to spend additional administrative time holding them to their end of the bargain.

I made a number of changes in the way in which I did my practice:

1. The client is my only boss.

Uncomfortable with the split loyalties required by M.H.C., I now have a policy that any case conference is audio taped for the client, and any report is reviewed by the client prior to being submitted.

2. A cash practice with lower fees.

When I left M.H.C. I had $16,000 in outstanding billings. I went to a cash practice which no longer served as a lender of unsecured loans. Now, with few exceptions, I am paid in full at the time of service, and group members pay for a month at a time -- at the first of each month. I don't have particularly well-to-do clients, so to minimize the hardship on them I reduced my fees to $65 per individual or couples session, and $150 for 4-5 week month of two hour group sessions. I also began accepting Visa and MasterCard. Even though they don't tell their consumers this is an option open to them, many managed health care companies will pay a portion of my fees, as an out-of-network provider.

When clients say that if they see someone on their insurance plan they only have to pay $10, I encourage them to do so with the caveat that when it doesn't work out, or they run out of sessions they can come back and see me. I believe it is the difference between going to a fast food restaurant and gourmet cooking. I may cost more, but they see me as long as they like. They are in charge. They don't have concerns about confidentiality. They are also choosing me on the basis of my specialization, and my experience. And finally, the client is basing decisions on personal rapport and a therapeutic relationship. All these things are viewed by M.H.C. as counter to their interests. Inexperienced therapists cost less and are less hassle. To them providers are small, interchangeable cogs in their wheel. They are technicians, not professionals rewarded for their education and expertise.

3. I minimized the paperwork.

When I went to a cash practice I did away with most of my billing. I now bill less than half a dozen clients each month. The rest have a zero balance. I also designed a form with two carbons that serves as a receipt and has all the necessary information to attach to a HCFA form (which the client prepares and sends in). It takes me just a few minutes to fill out the form while the client is writing his check.

4. All my client time is billable.

Now when I do reports or letters for clients I charge my normal rate for my time...all my time. When I worked under managed health care they specifically disallowed these expenditures. But due to their requirements, my administrative time was increasing exponentially. I still do reports for clients, but just as when you work with an attorney, I get some compensation.


I would advise therapists considering going it without managed health care to consider the following in a formula for success:

1. Number of years in practice:

I have been in private practice in Denver for twenty years. I have a very broad professional network, referral sources, and satisfied clients who return after months or even years. If I was only a year or two into it, I believe it would be a much harder road.

2. Using marketing skills:

Many therapists I know have what I would call a private private practice, in that they don't get their name out there wide enough and often enough. If you rely on a bunch of provider lists with M.H.C. possibly you can get away with that. However, with out that crutch marketing is the key to survive. Consider in addition to lunches with colleagues and allied professionals, some of the following: brochures, mailings, a newsletter, a Web sight, advertizing, and voluntary community involvement that helps get you known.

3. You need a specialization.

Since I began my private practice I have worked primarily with gay men, and since the beginning of the epidemic HIV/AIDS has been a specialty area of mine. This is vital, I believe, for the out-of-network provider. Why should someone come to you in the first place? You need to have some area in which you are set apart by your expertise and specialized knowledge.

4. Consider doing groups.

My groups have kept me financially afloat. I do two HIV groups, and two for gay men. They tend to be full or have one or two openings. Groups cost clients a monthly equivalent of just over two individual sessions, and are thereby financially appealing.

In addition, I have found groups very clinically viable, and have used them for a number of years. It is rare, how-ever that clients come in initially asking for a group. Most group members first saw me individually.


My fears of going out of business have not materialized. My income was actually more last year than the year before, although this was in part due to an aggressive collections drive to recoup as much of that $16,000 M.H.C. had yet to pay.

I do have less referrals now, and my individual caseload is smaller. However, I'm not working a lot of overtime and have time to devote to other interests -- such as writing.

I have no regrets. As I tell clients, decisions cannot be fear-based. Risks keep us vital and free of imprisonment in lives of quiet desperation!


Read my original article about leaving the preferred provider lists: "I Quit!"

Take a look at the current client contract I use: Fees & Policies

National Coalition of Mental Health Professionals & Consumers, Inc.



Last messed with November 15, 2001

Copyright(c) 2001 Michael E. Holtby, LCSW. All rights reserved.