Insurance vs. Private-Pay? | Individual Matters

How to Pay for Learning Assessments?

To use insurance or to private-pay? That is the question, right? Perhaps you’ve already decided to go forward with a psychoeducational (or learning) assessment for your child or yourself. Or maybe you’re still busy comparing services, costs, and trying to determine whether and how to pay for the assessment. No doubt you’ve spent a lot of time researching options. You understandably want to find the best possible assessment service – but also at the most reasonable cost!

Somewhere during your research, you’ve probably wondered whether to pay for the psychoeducational assessment with insurance or private-pay (i.e., paying with cash, check, or credit card). What are the advantages of each payment option? And which is right for you and your family?

Both options – insurance and private-pay – have their advantages:

Insurance

Can reduce the cost burden. Depending on your insurance plan, as well as the type of assessments and diagnosis, insurance companies may pay for some or all of the costs of testing for “medical” conditions (usually these refer to mental health or neuropsychological issues that are deemed “medically necessary”).
Discounts are typically available for going through “in-network” providers.
Other discounts may be available when you use “out-of-network” providers.

Private-Pay

Insurance does not pay for “learning” or “educational” assessments. Insurance policies do not typically cover “learning” or “educational” assessments such as testing for learning disabilities. In general, insurance does not pay for psychoeducational assessments of academic achievement, cognitive (IQ) testing, or personality and temperament inventories. However, as discussed above, your health insurance might cover assessments of certain “medical” conditions. For example, depending on your insurance policy, you might be reimbursed for assessment of mental health issues or, in some cases, ADHD. Your policy might also pay for certain types of neuropsychological testing that your physician believes to be a “medical necessity.”
In order for insurance to pay, you must be diagnosed. This is important to consider before you decide to utilize insurance. Since health insurance is part of the medical model, you (or your child) must be diagnosed with a mental health condition if you utilize insurance. This stipulation is important to understand up front, since any subsequent diagnosis will become part of your permanent medical record – possibly affecting your future insurance coverage, school options, employment, etc.
Your privacy is protected. When you pay privately, you share an agreement with your psychologist – and no one else. With the exception of special cases (e.g., issuance of a court order, or in situations where someone’s life or safety is threatened), your records will never be released without your written authorization. Cash sessions are entirely confidential. Conversely, insurance companies can and do audit psychologists – meaning your (or your child’s) records must be made available to the insurance company and, quite possibly, various other “third party entities” (such as government agencies). Even if your psychologist is not audited, he/she is still required to submit certain information about you to your insurance company (see below).
Only you and your psychologist determine scope of care. When you pay privately, your psychologist will work with you to formulate goals and intervention based upon your unique circumstances. These plans can be modified, continued, or concluded based on the decisions you make together – in confidence. On the other hand, insurance companies require psychologists to submit client treatment plans – which their claims departments will then decide to approve or deny. When you choose to utilize insurance, the type of assessment, results and diagnoses, and recommended treatment must be submitted to your insurance company. Their claims department will then determine whether the outcomes and recommendations of your sessions fit the insurance company’s decision-making matrix.
You have more options. When you pay privately for an assessment, your psychologist can utilize any assessment tools that he/she believes will be most helpful and appropriate for yielding a clear and comprehensive profile. He/she is not constrained by what your insurance company will or will not pay for.
No hidden costs. Private-pay typically involves “flat fee” rates. For example, if an assessment is advertised as $800, then that’s the final cost. All agreed upon services will be provided for that price. There are no “extra” or “hidden” costs. You will not receive any “surprise” follow-up bills.
Often less expensive than insurance. In the long run, the cost of a psychoeducational assessment may end up being less when you private-pay. One reason is “deductibles.” Insurance companies typically require you to pay a certain amount before they will cover additional costs. If this amount (i.e., your deductible) is greater than the cost of the evaluation, your insurance policy will not pay. Keep in mind that, just because you have received an initial quote for reimbursement, this does guarantee you will actually be reimbursed (as mentioned above, claims may still be denied). Furthermore, since insurance companies direct scope of care, they may agree to cover only a limited-scope assessment. And in all cases, the insurance company will require a diagnosis. But what if no diagnosis is warranted? And what if further testing is appropriate? When all is said and done, you may be left with more questions than answers, and the total cost of the assessment process will increase substantially.
You pick your provider. Perhaps most importantly, when you pay privately you are able to choose your provider based on “best fit” for you (and your child).

What should you do?

There is no single, best, “right” way to pay for a psychoeducational assessment. Both insurance and private-pay have their advantages. Here are a few final suggestions to consider:

If you have insurance coverage, check your particular plan by calling the customer service number on your card. Ask the representative about the benefits of using in-network and out-of-network providers, as well as to explain exactly what is (and is not) covered by your plan.
If you have a Health Savings Plan, you may be able to use these funds to pay for psychoeducational assessment. Check with your HSA provider.
If you can afford to do so, use cash or check to pay for psychoeducational assessment. This ensures the highest levels of privacy and comprehensive service options.
If you need to use insurance, get a quote from your company, pay privately first, and then seek reimbursement. Your psychologist can issue you a detailed invoice with insurance billing codes. However, keep in mind that, if you do utilize insurance, your psychologist will still be required to issue a diagnosis (and then submit it to the insurance company). But with this option, you can at least have greater freedom in your choice of psychologists.
If you still have questions or are uncertain about the options, call and ask your psychologist. They love helping individuals and families – and they will be more than happy to provide information or answer any questions you have!

– Dr. Katen