Two numbers from the American Psychological Association’s 2024 Practitioner Pulse Survey explain most of this decision, and they are usually quoted separately.
The first is the one that gets attention: about a third of psychologists accept no insurance at all. The second rarely makes the headline: more than half reported having no openings for new patients.
Read together, they say something the first number alone does not. Clinicians are not declining insurance only because the rates are poor. They are declining it because the thing insurance provides — a referral stream — is a solution to a problem they do not have.
That is the frame for this decision. Insurance buys you volume at a discount. It is worth it if you need volume.
What the discount actually is
Heard’s Financial State of Private Practice Report put the average private-pay rate for individual therapy at $159 a session against an average insurance reimbursement of $111 — roughly thirty percent less. Its following edition found the gap holding steady at twenty-five to thirty-five percent.
Independent data points the same direction with a narrower gap. A study in Health Affairs Scholar examined more than 175,000 private-practice therapists and found that clinicians who did not take insurance charged around $156 a session against roughly $141 for those who did.
The two figures measure different things — one compares what a therapist collects from a payer against what she charges privately, the other compares list prices between two groups of clinicians — which is why the gap looks different. Both establish the same fact: private pay collects more per session, and the difference is large enough to matter.
Reimbursement is also why clinicians leave. Among APA respondents who declined insurance, eighty-two percent cited insufficient rates, sixty-two percent cited administrative burden, and fifty-two percent cited doubt about being paid reliably at all.
The number nobody models
Here is the part that turns a modest gap into a bad trade for some practices.
Some of your current private-pay clients already carry insurance. They pay your full fee because you are out of network and their benefits do not help them. The day you join a panel, that same client — same session, same slot, same work — pays your contracted rate instead.
No new client arrived. Your revenue on that hour just fell by thirty percent.
If half your caseload switches, you have to replace that revenue with genuinely new clients before joining a panel adds a dollar. And here is where the capacity number matters again: on a full caseload, there is nowhere to put those new clients. The switching happens, the replacement does not, and collections fall while the paperwork rises.
For a therapist at eighty sessions a month with room for twenty more, break-even at a forty percent switching rate can exceed the open capacity entirely. Enrolling cannot pay for itself without seeing more clients than the week has hours for.
The middle path most therapists skip
Out-of-network is not the same as cash-only, and it is frequently the right answer.
You stay off panels. You collect your full fee at the session. You generate a superbill, and the client submits it against their out-of-network benefits and gets reimbursed directly by their insurer. You never file a claim, never wait on a payer, never have a claim denied, and never accept a contracted rate.
What you do give the client is access to their own benefits, which is often the specific objection that was costing you the referral.
This matters more in mental health than almost anywhere else in medicine. RTI International found that commercially insured patients go out of network for behavioral health care several times more often than for medical care — the pattern is established and clients are used to it. Many are already prepared to pay up front and seek reimbursement, if the paperwork is handled for them.
If your reason for considering panels is “clients keep asking about insurance,” try superbills first. It answers the objection without the rate cut.
When joining a panel is usually right
- You are building a caseload. Early practice, a new location, a new specialty, or a new associate. Panels solve the cold-start problem better than anything else available, and the rate discount is worth paying while you have empty hours.
- Your referral pipeline is thin or concentrated. If most of your clients come from one source, that is a single point of failure. Panel membership diversifies it.
- Your niche is underserved and covered. Some specialties have real payer demand and short in-network waitlists — substance use, eating disorders, child and adolescent work in many markets. Where the plan cannot fill its own network, your leverage on rates is better than the averages suggest.
- You want to serve clients who cannot pay privately. This is a legitimate reason and it is not a financial one. Say so plainly to yourself, budget for it, and do not expect the spreadsheet to justify it.
When to stay private pay
- You have no openings. Over half of APA respondents reported exactly this. If you are full, panels cannot help you, and the discount applies to your whole caseload.
- Your clients would largely switch. High-switching, low-capacity is the worst combination in this decision, and it is common in established practices.
- Your model is not session-based. Intensives, group programs, coaching-adjacent work, and longer formats often reimburse badly or not at all, and forcing them into billable codes distorts the clinical work.
- Clinical autonomy is load-bearing for you. Medical necessity review, session limits, treatment plan documentation, and utilization management are real constraints on how you practice, not just paperwork. Some clinicians find that trade unacceptable at any rate, and that is a coherent position.
If you join: bill it yourself, or outsource?
At solo scale most clinicians start billing themselves and it works, because the volume is low and the payer set is small. That is a reasonable place to begin.
It stops working at two specific points. The first is when a second clinician joins — payer count and credentialing overhead scale faster than session count. The second is when you notice you are not following up on anything. Unworked denials do not announce themselves; they show up as revenue that quietly never arrived, and by the time you look, timely filing has closed the window.
Whichever way you go, what predicts your outcome is not who does the billing but whether denials get worked. Mental health claims carry a high administrative denial rate driven by expired authorizations, parity-disguised utilization review, and time-based coding errors — problems of process, not of care delivered. A slightly higher fee attached to someone who works every denial beats a lower fee attached to a queue nobody watches.
In-house or outsourced billing: the number that actually decides it →
Before you decide
- Credentialing takes months. Commercial panel enrollment commonly runs ninety to a hundred and eighty days, and behavioral health telehealth credentialing across multiple states can run longer. Start before you have decided, not after.
- Join one panel first. Pick the plan your prospective clients ask about most. Run it for two quarters. Measure how many sessions it actually filled and what you netted per session after denials — then decide about the rest with real numbers.
- Ask your current clients. How many carry insurance they cannot currently use? That is your switching exposure, and it is knowable rather than guessable.
- Run it against your own numbers. The enrollment calculator takes your session volume, your private-pay rate, your capacity, and local contracted rates, and shows what joining a panel would do to your collections — including the clients who would switch. It also shows the break-even: how many genuinely new clients you would need before it adds a dollar.
Sources: American Psychological Association, 2024 Practitioner Pulse Survey (n=853); Heard, Financial State of Private Practice Report, 2025 and 2026 editions; Health Affairs Scholar, September 2024 analysis of private-practice therapist insurance participation and fees; RTI International, April 2024, on out-of-network utilization in behavioral health; published commercial payer credentialing timelines, 2026. Contracted rates vary substantially by payer, state, license type, and plan.