Private Pay 1: Growing an Insurance-Based Practice is Not Easier -- And You Won't Make as Much Money (2024)

Perry: Hi everyone and welcome to episode 1 of the therapist experience mini- series on becoming a private pay private practice. In this min-series, we’re doing something really extraordinary. We’re interviewing industry experts on their experience guidance and advice on transitioning to a fully cash-based practice. To listen to the previous episodes of this series, please head on over to brightervision.com/privatepay/. It’s going to be a full mini-series with a number of episodes and lots of great guests and advice on transitioning to a full private -pay private practice. Today’s expert is Eddie Reece. You might be familiar with Eddie from previous Therapist Experience Episodes, specifically Session 9 and Session 39. And today, Eddie’s going to be sharing his guidance on the benefits of being a cash-based private practice, and why you should strongly consider moving off insurance panels entirely. It’s going to be a really fantastic introduction to what it’s like to be in a private pay private practice sort of philosophical overview and then a deep into what actually it entails and so here is episode 1 of the therapist experience mini-series on becoming a private pay private practice. Hey Eddie, how are you today, sir?

Eddie: Hi Perry, I’m doing as fantastic as usual anytime I’m talking to you.

Perry: It’s always so much fun. We have such a great time chatting together here and I’m just so glad, I think he used the analogy last of time two jazz musicians going back and forth. I think it’s such a great analogy and I’m so excited to have you here as the first guest on this mini-series, so yeah, thank so much for being here today.

Eddie: You’re welcome Perry. This is the highlight of my day.

Perry: So Eddie, for folks who aren’t familiar with you and if you’re not familiar, you definitely should be. Head on over to brightervison.com/session9/ or session 39 to learn more about Eddie. But for folks who haven’t heard your episode or previous advice, can you give us a little overview of you and your background?

Eddie: Yeah, sure. I’ve been in this business for close to 30 years now. I’ve been private pay since day 1 and there was a brief moment when I was on an insurance panel and we can talk about that a little bit later but I think it’s the only way to go and that’s what I would like for us to cover today is kind of my philosophy of why I think it’s the only way to go and feel so strongly about that.

Perry: So, yeah, why is that? Let’s dive right into the meet of things.

Eddie: Okay. What I tell some of my clients that I consult with or if I do workshops about practice building and we get on this topic, I ask them, “Did they really sit in school and dream of being a therapist and dream of all the paperwork there is to do with filing insurance and then all of the aggravating phone calls that they had to make to finally get paid and did they really sit there and dream of one day making maybe 20$-25$ dollars an hour when you figure all the time and effort that you put into it, is that really what they want?” And I hadn’t had anybody go that’s exactly what I dreamed of, Eddie, oh my gosh, you nailed it. It’s a dream of people will come to my practice, they’ll write me a check and their credit card, give me cash and we’ll be done and so that’s the only way I ever envisioned it and I could not understand in the least why the people who suggested I could get on insurance panels; why that made any sense at all.

Perry: So that’s the dream that people really have if they are going to go into private practice to actually have people come and write them a check or hand them a credit card or give them cash, why is it that such a few private practices are cash -based?

Eddie: Well, there is certainly a number of reasons but the main thing that I focus on with folks when I’m working with them is to help them overcome their fear of doing that. It’s simply a matter of being afraid. Folks tell me, “I don’t believe that people will come and pay me, I don’t believe that If I’m not taking insurance out, I’ll actually get any clients”, and that’s the thing that I hear and so it’s to help them really overcome their fear so that they can envision it and can picture it and this is a huge soap box for me because it’s one of those many areas that I’m out on the extreme with this so it’s a lot of for me to work with folks like that and help them achieve what they really want to achieve I think. I don’t know of anybody who is even working in this business that is on insurance panels that says this absolutely my choice. If I had a choice between this and private pay, I’d choose insurance. I really cannot envision anybody saying that.

Perry: There’s certainly not as many but you know there’s a lot of challenges, just like there’s challenges with being on insurance panels. There’s challenges with being private pay, what are some of the challenges in your mind of being a cash-based private practice?

Eddie: I think that you’re hitting on fear #1 is that I won’t be able to market my practice in a way to have people show up and pay me , that’s the thing that most get hung upon. They don’t know how to market and gosh, we’ve talked about this at length and the other two podcast we did. They don’t know how. They aren’t taught how , school doesn’t teach them how and so it’s easier if you’re presented with well, here’s how to get on insurance panels, that’s simple enough, you fill out the applications [ 06:14 inaudible], here’s how you market your practice and it’s going to take a lot of time and money to do that. It seems simpler at the outset to go with insurance panels, to get your practice going but what I tell people is in the not too long run, you’ll see that it’s not simpler and you’ll get locked into something that chances are , you’re going to regret and you won’t make as much money as the people in private pay.

Perry: That’s certainly seems to be case but why is that? Let’s sort of dive into why is it that you-I mean, people can make a living with insurance panels….

Eddie: Oh yeah, yeah…

Perry: But, it certainly seems a lot more challenging in terms of the actual math of making it work?

Eddie: Right, that’s exactly why, I picture it and I’ve done this with clients, have them actually logged the amount of hours they spend. Not only with an insurance clients but also when all the administrative things you have fill out and then take those hours and simply divide by the fee they’re getting and now, insurance panels pay less than they did when I started in this back in the late 80s or late 90s, so pays gone down. Another way to think of this is so you really wanna work for someone which is an insurance company that is continually gonna pay you less, cause you work more and more; not appreciate you, not care about you and not work in the best interest of your corner. Is that the kind of employer you want?

Perry: And that’s really what it is. It becomes an employer.

Eddie: Correct.

Perry: They dictate your pay. They dictate how many clients you need to see to make it since they say, you’re only getting paid for this and for this type of session.

Eddie: Right.

Perry: So, it definitely makes things a lot more challenging plus you have deal with all the paperwork and all the overhead and the expenses related to that.

Eddie: Correct, and I’m those visionary type people, entrepreneurial type people as we talked about before , and the last thing that I want to do is anything administrative.

Perry: So Eddie, you went into private pay in the late 80s, is that correct?

Eddie: Yeah, I actually started my practice 88, 89 as part of becoming a therapist. At that time, you could actually work and have your supervision and all that in a place where you made money. In Georgia, it very different now, you actually have to be employed by someone else after you get out of school, but, I started my practice quite by accident really and that’s another interesting story one day, but, it started pretty easily for me and again, I’m that natural entrepreneur, so the things that I naturally had to do to build a business of any kind were very natural to me and they’re not natural at all to majority of psychotherapist.

Perry: It requires a completely different skill-set but there’s skills that can be acquired. There’s skills that can be learned and there’s skills that you can be good at.

Eddie: Right. Not only skills that you can acquire and learn but skills that you can pay somebody else to do.

Perry: So what are some of those skills?

Eddie: Well, Brighter Vision, I’m not going to go through the learning curve to build my website the way you guys build it. I try that in the beginning and it’s a real pain so you find ou what you like to do, what you can do, what would work. You do those things yourself if you can and if you can’t, you form it and you pay for it.

Perry: So Eddie, you mention that you were on an insurance panel briefly.

Eddie: Right.

Perry: What made you get off that and I guess, why did one in the first place and what was the straw that broke the camel’s back and forced you and pushed off it?

Eddie: Well, this is one of my favorite stories to tell them about how infuriating insurances can be. I had a fellow come up to me and say a really want to be in therapy, therapy with you and I absolutely want to use my insurance and he basically talked me into it because it was very easy at the time, he talked to his insurance company and they by having me sign my name, that’s all I had to do on a piece of paper. They made me an adhoc provider so I got to skip the paperwork of filling out information and things like that. So, the first and the only time I filled out insurance forms and I submitted them to the insurance company and there’s one form that you use and I’ve used that I photocopied it and I sent the exact same form there every week for this fellow and probably every third week I get a letter from them saying that we cannot pay your claim for such and such reason. It was always something bizarre because again, I’m sending the exact same form in that I got paid on last week but this they’re not gonna pay me and then one day I got a letter with the form in it and the letter said, dear Mr. Reese in-close, this is form you submitted on such and such for such and such and we can’t pay this because we can’t read your name and address.

Perry: Oh My Gosh, that’s so absurd.

Eddie: This is probably twenty years ago and I still tell the story and I can’t help but laugh. The absurdity of it is – and I laugh, I mean as aggravated, I have gotten with them in the past, I laugh, I say this is… This is hysterical and so I immediately called them, oh yeah, we can’t pay you because we can’t read your name and address and I said, I got one question for you, how’d you know where to mail it? And the fellow did nothing but read his script, he kept saying, we can’t pay you because we can’t read your name and address , you have re-submit and within the minutes, I was trying to crawl through the telephone to strangle the fellow.

Perry: Could you imagine you telling your cable company you weren’t going to pay that bill or your water company, I’m gonna pay this bill because I can’t read that number, it doesn’t make sense to me.

Eddie: I can’t read what company this is from.

Perry: It’s like give me a break and that was twenty years ago and things have only gotten worse and you can see it because more and more therapist are moving off insurance panels and are making that transition to be private pay and our whole goal with this mini-series is to help you in that transition. Eddie and I are chatting right now, giving you that, hopefully that kick in the butt to get to you keep listening to the rest of these and understand the benefits of moving to cash- based and there’s just so many benefits and it can be liberating to finally do that but you know there’s so many people who want to get off insurance panels but are hesitant to switch for various reasons. What is it that you say to them? If someone is listening to day, I want to be off insurance panels. I want to stop being a contractor for united healthcare, what is it- but I’m hesitant to do that, what can you tell that audience member right now to help them move off those insurance panels?

Eddie: What I’d tell them is we have to first of all get rid of the fantasy you have about getting off insurance panels because it’s getting in your way, because of when we thinking of making any changes in our life ; what we generally picture is not a step by step gradual process to eventually accomplishing a goal. That never happens so if somebody, you know this is the first of the year, somebody says,” by gosh, I’m going to exercise regularly”, they picture exercising regularly as three to four to five to seven hours a week for couple hours a day, well, that’s a fantasy and even that’s what you wanted to accomplish or you’re not going to do that starting this week so if one of my clients for instance say, that’s what I wanna do, I say okay, let’s do this , pull out your calendar and mark down when you wanna do that and don’t pick more than three times in the next seven days . Pick the time and day that you want to do it and all I want you to do to get what I call a check mark is you exercise today. You got the check is that I want you to at the time you’re supposed to show , change your clothes into your workout clothes and at that point you’re done. You don’t have to do another thing and you get a check mark and I want you check it off and see if you can hit 100 % percent this week of three times this week. Now if wanna go and do something little , go do that but don’t do a whole lot, let’s just see if you can get 3 check marks in a week and most of a time they can’t because they imagine that I have to do all of this now, I have to do it immediately. I have to do it perfectly and permanently.

Perry: So what are these check marks for becoming a cash-based private practice?

Eddie: Pick one of insurance panels. Give them a call and say, “Hi, send me the paperwork to come of your panel and the fun will begin.

Perry: Would you recommend them to a therapist who might be on three different insurance panels to sort of start easing off them. Find perhaps which of your clients, what’s the most popular insurance panel and would recommend calling the least popular one then and starting working your way off those.

Eddie: Either the least popular or even if they send you the most clients, the one that’s give the most headache, which place would you like to walk in and start slapping people first. Pick that one and call them and say I want to get off. Don’t say, “I’m thinking about you know that’ll I’d like to sort of get off because they’re not going to okay, great, here’s what to do. It took me a concerted effort to get off that panel and for months, I would get a client who would call me and say my insurance company recommended you and it wasn’t even the same insurance company. I later found out that these guys do talk to each other and they say, “here’s somebody you could probably get,” they actually have the time – I don’t know if they do this anymore , I haven’t gotten these calls in a long time but they would take the therapist in this case “me” name and number, they’ll give it to their client and the client would show up thinking that I’m on the panel and the reason, I think they do that is because what would probably happen to a therapist who didn’t have their kind of ideas right on what they’re gonna do and what they’re not gonna do; they will go here’s my chance to get a new client, all I have to do is fill out these forms but once you’re in it’s sort of hotel California , you can check but you can never leave.

Perry: You have to be able to say “no” to that client and say, “No, I do not take insurance, I’m not on that insurance panel.”

Eddie: Correct.

Perry: And then what do you say?

Eddie: Well, I’ve got and I’d be more than happy to do this for the listeners of this podcast, if you wanna email me , I will send the little blurb that I have written out that explains your options and your options are self-pay , come-in pay me, and nobody knows anything about it. You can come in and use your outer network benefits because anybody who’s on private pay , they can give a client a insurance form that takes a couple minutes to fill out and then you copy it every time and you hand that to the client. The client handles it. That’s client called out outer network benefits and then- this is a key point, I’m glad that thinking about, the next option is not to use your insurance. The next option is to find a low-cost clinic. Find the place that you can afford and the find the therapist in that clinic who’s had a mountains of their own psychotherapy and go there. You don’t have to use your insurance and spell this out to every perspective client that calls me, I don’t let them get off the phone without giving them that little spiel.

Perry: So Eddie, you’ve been doing this a while, what trend do you see in the industry in terms of insurance panels versus not insurance and where do you see things going?

Eddie: Well, the first topic that comes to mind is to simply look at your health insurance and where that’s going and I don’t want to hear from anybody from the political side but it’s just the fact that here in Georgia, I’m one of the folks that really been hard by what’s going on with insurance and that I have the money to pay an insurance company. I’m willing to give it to them and the only choices from the affordable care act in Georgia is HMOs and I’d rather go uninsured than be with an HMO. I don’t want someone telling me , come see this doctor, I’m gonna pick my doctor, I’m apart of a concierge so I’m not gonna change that so just look at your own involvement and ask yourself ,”are these the people I want to be employer?” I don’t of anybody right now, who go, “oh yeah, they say these guys are great.”

Perry: What are some of the things that they should be aware of before they transition into being a cash-based private practice?

Eddie: That you go learn all the things that you and the folks and this podcast series have been talking about. You got to learn to run the business of being a therapist when it had nothing to do with the skill set of being a therapist. You gotta get out there and learn to market, you gotta learn how to sell, you’ve gotta learn how to close that sale. You gotta learn all those things that you don’t know how to do.

Perry: And thing to remember also, is that if you’ve been in private practice of you are on insurance panels, you still need to be cultivating those skills.

Eddie: Sure, because and this is apart of my philosophical band. It’s those very skills that I think make a great therapist. You can be a good therapist without knowing how to close the sale but you’re not gonna be a great therapist because closing a sale is persuasion and therapy is nothing but persuasion and all the stuff that I read from time to time that just irks me to no end about how we don’t guide our clients or we don’t tell them what to do, that’s just bull. We absolutely as therapist have a way of living our life that we think is the best way to live our lives and that I think I should live my life which I don’t always do. I think it’s the best way so why would I tell you any other way to live your life other than the best way. Now, your way maybe look different from mine in terms of what you do day to day but the template for the under ten innings score would be exactly the same and every therapist has that and every therapist does their best to settle that to their clients and so I just say “go ahead and know that’s what you’re doing and do a darn good job of it.

Perry: Love it. So to our audience listening today, hopefully right now, you’re getting inspired or already have been inspired to begin moving off insurance panels. Obviously, this is not gonna be for everybody but the purpose of this min-series is to guide in the process, provide with our road map and give realistic expectations of what it looks like. In this episode today, Eddie is just diving and giving us a great philosophical overview of what it looks like so I have a question for you Eddie, how does your business change when you go off insurance panels? It might seem like a pretty well dumb kind of question but for people listening today, let’s drill down, and let’s show them, this is how your business is going to change and the x and o once you move off insurance panels.

Eddie: Well, instead of spending your time administratively dealing with insurance panels; you should be spending your time marketing, be spending your time finding, acquiring your clients and so that’s the biggest change and I think that the two we were talking earlier about why folks don’t get off panels? Because it is too easy to just let the clients call and you don’t have to do anything quote and quote. You have to do a lot. I think you have sell your soul in my humble opinion but it’s a lot easier than what I do day to day to acquire new clients, right, that’s for sure so that’s the biggest difference is how you spend your time. You’re gonna be spending your time building your practice rather than try to make your employers happy.

Perry: That was a really great line there Eddie. So, for people who might like administration paper work, perhaps a cash-based practice is not for you.

Eddie: It might not be. Our profession is very diverse. There are folks like myself that are on one end of the spectrum that believe psychotherapy is not a quick fix, believe that everybody can really benefit from therapy and good therapy. I don’t market or sell or practice what I call a cookie cutter kind of approach toward therapy that one size fits all so if you’re that kind of person which in my opinion be somebody not as entrepreneurial, somebody who really wants to follow the book and fill in the forms and you know not only just insurance forms but fill in the forms of how you run your business and the kind of clients you see and the way you treat them then no, that person is not an entrepreneurial type person.

Perry: And that’s perfectly fine. There’s absolutely nothing wrong with that. If you’re saying, you know, I just wanna not be in a big group practice. I want to sort of set my own hours and I want to take insurance because it’s very straight-forward way to run a practice and there’s absolutely nothing wrong with that but there are advantages to going cash-based. It’s harder at times but the rewards can greatly out way in many cases the rewards of only taking insurance.

Eddie: Yeah, I think that you’re absolutely right and again it comes back to helping therapist really overcome so they can believe exactly what you’re saying and it’s hard for folks to sell an intangible which what therapy is which is exactly what we’re talking about . It’s an intangible, moving off insurance panels and the private pay is an intangible. I can’t show you this thing, I can’t hand it to you. You can’t put it in your hands, you can’t take it for a test drive. You simply have to believe in it and selling therapy is exactly the same thing. I spent more time today than I usually do with a perspective client on the phone because it is of this very fact, she wants something tangible before he ever makes the first appointment and she been thinking about, talking about getting into therapy for several months now, seriously, working on it but she’s hasn’t made an appointment and so it’s selling that intangible. How do you that? And if you’re on an insurance panel. You don’t have sell an intangible. They’re gonna show up.

Perry: How do you do it?

Eddie: Well, it’s a matter of doing something that we all do anyway, we just don’t know it and we don’t call it what it is and I learn this form reading about studying and learning about Temple Grandin and autism. How’s that for a stretch? What Temple Grandin says is my mind works in pictures and only pictures, that’s why she could relate, if you know anything about her she could relate to cows, okay, because , cows are animals and animals think in pictures, they don’t think in words and I believe that we actually communicate in picture to people that no matter what words I’m saying pictures are running through your mind and if I can clearly communicate my picture to you so that you see my picture ,not your picture, then that I can sell you because you can see it but if you have your picture then again, I go back to this woman , I talked to earlier today as a perspective client, she has a picture in here mind of therapy and it’s that all of it is gonna be all figured out before I ever make a move so thinking a gain like I was saying earlier about switching to an insurance panel. The fantasy is I’m gonna go strictly private pay, I’ll do it now and I’ll do it all at the same time and it’ll all work great, nobody ever really says that but that’s the picture in your mind and you have to destroy that picture and put a different picture in there.

Perry: And what should that picture be?

Eddie: That picture is a slow, arduous step by step aggravating, tricky way of doing business. How do you want to do business? Do you want to own your own business and people who are 100% owned insurance panel think they actually have their owned business but they don’t. They’re working for the insurance company just like I’ve said a number of times so it’s actually putting a picture in your mind of this is my business which means I run it and I make the decisions. I sort of jokingly but very truthfully tell people that it’s no coincidence that I work for myself by myself at home because I never got over my authority issues , [inaudible 30:55 ] and I can’t have them all.

Perry: So, one point to touch on there, I do disagree with you. You can have a business and be an entrepreneur while being on insurance panels. Generally, however being a solo private practice on an insurance panels is not really as feasible. However, if your goal is build a thriving group practice, in that case, then insurance panels, might the answer for you. It’s definitely a possibility and it’s definitely something to keep in mind because you can be an entrepreneur and build a thriving private practice on insurance panels especially if you have other therapist working for your private practice, so that’s just one differentiation I wanted to make there in my own personal opinion.

Eddie: Well, you’re absolutely right, you nailed me and it shows how ferly extreme I am because I know a very successful therapist that are doing exactly what you’re doing. They have 8 to 10 to 20 therapist working for them and their full of insurance clients and they’re making a pretty good living. That to me would drive me crazy because again, I’m a solo practitioner. I’m a pure entrepreneur. I cannot, not only not have a boss, I couldn’t have employees either. It’s certainly opens it own can of worms, my mother-in-law own a group practice in Jacksonville, Florida and they take insurance and I think, like gosh, I think has like seven different therapists in practice and they have an IOP program the biggest struggles consistently is dealing with insurance panels, you know, they still have to market themselves, they’re still doing a number of good old business stuff that you have to do to build a thriving business but then they also deal with the administrative headache of insurance panels so everybody listening, it important to understand what your goals are as a business. If you’re goal is to be a solo practitioner, generally speaking, getting of those insurance panels and moving to a cash-based private practice will allow to have more freedom. There are going to be challenges but there are challenges with dealing with insurance companies as well but the freedom and the entrepreneurialism of it certainly can out-way any off the arduous elements of that journey and on a final note here, Eddie and I love what you said about Temple Grandin in there, we’re actually pretty familiar with Temple Grandin here at Brighter Vision because I know he’s going to be blushing when I say this, Andrew Etching who been our longest lead developer, he’s been with me since I had ten customers, one of them being you.

Eddie: He’d done a lot of my websites.

Perry: Andrew’s aunt is Temple Grandin.

Eddie: Wow, that’s amazing, I really am less than seven degrees separation.

Perry: It’s pretty wild.

Eddie: That’s fantastic. That’s awesome man. I would love to sit and chat with Andrew bout things he had to do with her because I just-she has taught me so much about being a therapist, being a human being, how life works. I mean it’s very much a central part of the philosophy, I’m sharing with you today because she really is that kind of person that is all on her own as anybody who’s that high on the spectrum is and then she’s a wealth of information, if the listener’s out there don’t know who we’re talking about, start with the HBO starting Claire Danes, that’s a great place to start and go from there.

Perry: Well Eddie, I think is a fantastic introduction. I hope everyone in our audience today is super excited for this mini-series because I know I am. I know Eddie is. It’s going to be alot of fun. We have some tremendous guests lined up so please be sure to stay tune for future episodes. We are releasing this episode along with episode two and episode three simultaneously so head on over to see this week’s show notes at brightervision.com/privatepay1/ and if you want to listen to episodes two and three of the private pay min-series, you can go to brightervision.com/privatepay2/ or privatepay3 and brightervision.com/privatepay/ will have the entire mini-series on becoming and transitioning to cash-based private practice. Eddie, any parting words for our audience today?

Eddie: No, not that I could think of, my goodness, you know, nothing that I could do in a few seconds. You get me and it’s hard to stop me but I sure am excited about this project and am so thankful to you guys for including me. I think it gonna be a terrific resource for everybody and I’m definitely excited to be apart of and I put on there but we never covered this yet. Anybody that’s listening, if they’d like a consultation with me, I consult with therapist all the time about all the things we’re talking about. I’m gonna do this for the first time, that’s how much I love brighter vision. I’m gonna discount my fee 50$ which I tell therapist to never do for any reason at all so that tells you that I don’t always live my life the way I say you should. Yeah, so save 50$ bucks for one consultation with me and let’s get there’s so much would love for therapist to be off panels and something that we might talk about one of these days, completely remove themselves from any kind of idea of a medical model. We don’t treat people, we care and it’s a very different thing than and insurance would pay for.

Perry: And Eddie, if people are very interested in taking up your generous offer, where can they do that?

Eddie: I’m all over Brighter Vision, I think and in several places but eddiereece.com is the quickest and easiest thing to remember. The other website name for my practice is the name of my practice is gettingalong.net and you can email me form either of those sites and shoot me an email, we’ll set up an appointment and I’ll be excited to work with you in any way I can to help you get away from these…. I won’t go too far but these businesses that don’t really care about you.

Perry: Well, Eddie, thank you so much and we’ll have links to Eddie’s website specific information about this deal and everything else at this week’s show notes at brightervision.com/privatepay/. Eddie, thank you so much for your time and your knowledge. We’re so excited to have you here and to all of audience listening, again, you can check out the entire mini-series on transitioning to a cash-based private practice at brightervision.com/privatepay/. Thanks again Eddie.

Eddie: You’re welcome Perry and thanks to everybody listening and I look forward to hearing from you.