Medical Necessity, Insurance and Private Pay

Why we are a private pay center

American Culture

Health Care SymbolAmericans are accustomed to paying for medical treatment and services with their insurance.  If they get sick or injured and need to see a doctor, they simply make an appointment with their physician, show up, receive treatment and sign out with the expectation their medical insurance will pay for the cost of their treatment.

It’s how the medical system or model works.  People carry medical insurance so that when they get sick or injured and need to be seen by a doctor, the cost is covered by the insurance company.  What people don’t always consider is that the insurance company is driven by a medical treatment model.  More specifically, the principle of “medical necessity.”

What is Medical Necessity?

Medical necessity is the standard by which the insurance company decides if the services you receive meet the criteria for a specific illness or medical condition.  In other words, to be reimbursed by an insurance company for treatment, the physician you see must provide the insurance company with a medical diagnosis that satisfies their criteria and justifies payment.Doctor

Without that medical diagnosis, the principle of medical necessity will not be satisfied and payment will not be satisfied.

Medical Necessity and Psychiatric Diagnosis

Because medical necessity is typically defined as the need for a service to be reasonable and necessary for the diagnosis or treatment of a disease, condition, illness, injury or defect…claims that are submitted for insurance reimbursement must clearly identify a specific medical condition, illness, and/or diagnosis.

In the mental health field that means providing a diagnostic code from the Diagnostic and Statistical Manual of Mental Disorder (DSM-5).  In short, for a person to use their medical insurance for mental health benefits and reimbursement they must meet the criteria for some type of mental or psychiatric disorder and that disorder must be the focus of treatment.

Protected Health Information

It also means that the treating professional must demonstrate medical necessity at the time of service by providing the insurance company with the person’s Protected Health Information (PHI), initial assessment, treatment plan, progress notes, etc.

Permanent Medical Records 

This information then becomes a part of the person’s permanent medical recored.

This can be an especially relevant subject for individuals who are concerned about the future implications of having some type of psychiatric diagnosis attached to their medical record.

Impact on Career & Insurance

For individuals who work as an Attorney, Pilot, Emergency Responder, are in the Military or simply want to keep their counseling issues private, the presence of a psychiatric diagnosis can be especially troublesome.  As it can be for individuals seeking to purchase some type of life or personal protection insurance.

Relationship Counseling

As a Marriage and Family therapist, my primary focus is on helping people develop relational harmony in their familial, work, congregational and community systems. Relational counseling or therapy, however, is generally not covered by insurance companies because such services are not considered medically necessary.

This means that couples, families, individuals, partners, parents, and organizations who want to expand and further develop some facet of their relational self are not considered medically appropriate for medical treatment and medical reimbursement.

Marriage and Family Therapy


Safe and Secure

As a private practice therapist, who does not transmit PHI electronically to an outside third-party entity, I am not obligated or required to release any client information to an outside third party.

This means that I will never release your Protected Health Information (PHI) without your written permission and a client-directed reason to do so.

Limits to Confidentiality

While there are limits to confidentiality, as outlined by Indiana Statue in cases where a person is deemed to be a danger to either themselves or others or reports active child or elder abuse, being able to assure our client’s a safe, secure, non-pathologizing, collaborative and spiritually sensitive therapy session is a primary reason we chose to not panel with insurance companies.

No Worries

It also means you do not have to worry that some type of mental health issues, illness or diagnosis is going to be released or distributed to any third party entity.

At Chrysalis Connections Counseling and Family Relationship Center, your private therapy sessions remain private and confidential.

Choosing a Private Pay Therapist

Choosing to work with a private pay therapists is an individual decision.  For some people paying for therapeutic services via their insurance company seems appropriate because they feel it is a good value and they don’t want to miss out on the “benefits” of using their insurance.

A good number of people, however, recognize and embrace the therapeutic process as an investment of time and money that provides long-term relational, emotional, behavioral and spiritual health benefits.

Choosing a Private Pay Therapist

Seeing a private therapist might not be the best choice for everyone.

But, if you are a person who recognizes the value of investing in personal development, believes their therapeutic work should be not only confidential but private and self-directed, if you want the freedom to choose the therapist you see, the number of sessions you want and believe therapeutic work shouldn’t automatically include a psychiatric diagnosis…Chrysalis Connections Counseling and Family Leadership Center just might be the perfect place for you to begin your journey to a more authentic, happy and harmonious life.

Discover the freedom of private, client directed therapy!

Get started today by calling the counseling center at: