When you join an insurance panel, you sign a contract with that insurer to become an in-network provider. In exchange, you agree to accept the insurer’s negotiated rate for each session. Your contract with the insurance company does not allow you to bill the client for the difference between that rate and your standard fee.
For clients, this usually means lower out-of-pocket costs: smaller copays and deductibles than they’d pay for an out-of-network provider.
Getting paneled with insurance takes time. Credentialing, the process insurers use to verify your license, education, and malpractice history, has often taken 90 to 180 days. Illinois HB 1085 requires insurers to complete that process within 60 days, and once a contract is signed, reimbursement is retroactive to your application date, so you’re not absorbing months of in-network rates for free while you wait.
As Illinois HB 1085 brings the prospect of higher reimbursement rates for many commercially insured mental health services closer to fruition, I have started hearing a new question from private-pay practice owners:
Should I join insurance panels?
It’s an understandable question.
If insurance reimbursement increases significantly, it can be tempting to think:
“Maybe now is the time to get credentialed.”
For some practices, that may prove to be the right decision.
But before you begin the credentialing applications, I encourage you to pause and ask a different question:
What problem am I trying to solve?
The answer to that question may lead you in a very different direction.
Much of the conversation surrounding HB 1085 has focused on the new reimbursement floors. But reimbursement is only one part of owning an insurance-based practice.
Joining insurance panels also changes:
- how you spend your time,
- how you price your services,
- your administrative workload,
- your relationship with existing clients,
- your dependence on insurer policies,
- and ultimately the kind of practice you own.
Higher reimbursement doesn’t eliminate trade-offs
In fact, HB 1085 introduces several new operational responsibilities for participating practices, including requirements related to provider directories, credentialing timelines, and notification when clinicians stop accepting new patients. (I discuss these operational issues in more detail in my article, Illinois HB1085: Higher Reimbursement Is Coming, but Practices Must Plan to Benefit.)
Joining an insurance panel is not only a financial decision. It is a strategic business decision.
Understanding what is pulling you toward insurance
Sometimes the issue isn’t reimbursement at all.
Perhaps:
- referrals have slowed,
- your caseload isn’t as full as it once was,
- raising your fees feels uncomfortable,
- you’re worried about the economy,
- you want more predictable referrals,
- or you’re wondering whether private pay is becoming harder to sustain.
Those are legitimate concerns. But the solution any one of them may not require changing your business model.
Before joining insurance panels, ask yourself:
What problem am I hoping insurance will solve and what would I be giving up?
Private-pay practices are not easy to build.
They require clear positioning, strong referral relationships, and the confidence to charge fees that reflect the value of your work.
But they also provide something many practice owners deeply value:
- greater autonomy,
- simpler operations,
- fewer administrative burdens,
- flexibility in scheduling,
- greater control over fees,
- and less dependence on third-party payers.
Once you join insurance panels, some of those advantages begin to change.
So before asking: What could I gain?, it is equally important to ask: “What would I be giving up?”
Adding Up the Numbers
The strategic questions are the same for both solo and group private-pay practices. To keep the math simple, the following example uses a solo practice.
You:
- work 48 weeks each year,
- see an average of 22 clients per week,
- charge $195 per session,
- but average approximately $145 per session because you also offer some reduced-fee appointments.
Your annual revenue is approximately $153,120.
At first glance, reimbursement of approximately $177 per session under HB 1085 looks significantly better than your average fee of $145.
It is tempting to conclude: “Joining insurance will increase my income.“
But, of course, the reality is more complicated.
Example One: New Clients
Suppose six clients terminate during the year and are replaced by six new clients, keeping your practice full.
If three of those new clients have commercial insurance subject to HB 1085, those sessions may generate approximately $4,600 more revenue over the course of the year than three comparable private-pay clients paying your average fee.
That certainly gets your attention – but it isn’t the whole story.
Example Two: Existing Clients
Once you join an insurance panel and become an in-network provider, existing clients who carry that insurance may want to begin using their insurance benefits. (And contractually, if you are in-network with a client’s insurance, you must bill thru insurance and accept whatever rates your contract dictates. Clients cannot opt to pay out of pocket and if you are on their panel, you can not accept out of pocket payment instead of insurance.)
- Some of those clients may currently be paying your full fee of $195.
- Others may already be paying reduced fees.
- As a result, becoming paneled doesn’t simply add insured clients.
- It may also change how some of your existing clients pay for therapy.
- For some clients, reimbursement through insurance may actually produce more revenue than your current reduced fee.
- For others who are paying your full fee, insurance reimbursement may produce less.
The financial impact depends on your current fee structure, your client mix, and the insurance plans involved.
The point is, joining a panel changes the economics of your entire practice, not simply your new referrals.
What Happens If the Market Changes?
There is another possibility that receives much less attention. As HB 1085 raises reimbursement floors, it may also influence the broader psychotherapy market.
Private-pay therapists have always looked, at least indirectly, to insurance reimbursement as one reference point for determining fees.
As reimbursement rises, clients, referral sources, and therapists themselves may begin to view higher psychotherapy fees as more typical.
If that occurs, some private-pay practices may benefit without ever joining an insurance panel.
Instead of changing their business model, they may choose to:
- gradually increase fees,
- strengthen their niche positioning,
- improve their marketing,
- clarify their value proposition,
- and continue building a private-pay practice.
For some owners, that may ultimately prove to be the more profitable, and certainly the simpler, strategy.
Should you stay private pay?
Get the strategic self-assessment guide for private-pay therapy practice owners.
You Have More Than Two Choices
Many practice owners think the options are:
- Stay private pay.
- Join insurance.
But there are other possibilities.
You might:
- remain entirely private pay,
- join one carefully selected insurance panel,
- build a hybrid practice,
- increase your fees over time,
- strengthen your referral strategy,
- or narrow your niche to attract more ideal clients.
The right answer depends less on reimbursement rates than on the kind of practice you want to build.
Joining Insurance Panels Should be a Strategic Choice, Not a Financial Reflex
For some private-pay practices, joining insurance panels because of HB 1085 will absolutely make sense.
For others, it may create more complexity than benefit.
Before changing your business model, take time to understand:
- what problem you’re trying to solve,
- what you hope to gain,
- what you’ll be giving up,
- and whether there may be another path to achieving the same goal.
HB 1085 is creating new opportunities, but those opportunities look different for every practice.
Instead of starting at: “Should I join insurance panels?”
The better place to begin may be: “What kind of practice am I trying to build?”
The answer to that more holistic question will often make the insurance decision much clearer for you.
Looking Ahead
While HB 1085 may change reimbursement, it does not automatically determine the right business model for your practice.
Whether you remain private pay, join one insurance panel or many, or build a hybrid practice, the goal should be the same: to make an intentional decision that supports the practice—and the life—you are trying to build.
Get Support
If you’re wrestling with these questions, I offer strategic consulting to help practice owners evaluate the financial, operational, and long-term implications of these choices before making them.
I also offer an HB 1085 Decision Lab specifically designed to help you navigate this set of questions for your practice. The Lab meets in a small group of practice owners, typically 4 to 6 participants, over four structured sessions. Learn more and see if the HB 1085 Decision Lab is right for you.
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