When you see a psychiatrist, you probably expect the evaluation to be about one thing: understanding what is happening to you and determining what, if anything, should be done about it. But there is another part of psychiatric care that patients may not see.
That is the role that health insurance can play in psychiatric diagnosis and treatment.
For many patients, insurance is simply a way to pay for medical care. But psychiatric care has a complicated relationship with insurance because reimbursement, documentation, and diagnosis are closely connected.
And that matters.
Psychiatry Has Had a Longstanding Parity Problem
For many years, mental healthcare has been treated differently from other areas of medicine by the American healthcare system. Federal mental-health parity laws now require many health plans to apply comparable financial requirements and treatment limitations to mental-health and medical/surgical benefits. Even so, patients and clinicians continue to encounter requirements involving authorization, medical necessity, networks, reimbursement, and other restrictions.
There is another issue that deserves attention: the role of diagnosis.
Consider what happens in other areas of medicine.
If a patient sees his or her PCP, and no problem is found, the PCP gets paid. If blood tests are done, and they’re normal, the doctor gets paid. If a woman has a yearly exam with Pap smear, and it’s normal, the doctor/gynecologist gets paid. If a patient has an X-ray, and it’s normal, the radiologist gets paid. If an appendix is removed, and it turns out not to be inflamed (there is no appendicitis), the surgeon gets paid.
If a dermatologist does a biopsy, and it’s normal, the dermatologist gets paid. If a child has a yearly school exam, and the child is well (they’re called well child exams), the pediatrician gets paid. But if someone sees a psychiatrist, and expects to use medical insurance, the psychiatrist only gets paid if a diagnosis, of certain types, is made. So psychiatrists who expect to bill a patient’s insurance are forced to make diagnoses, even if there is no diagnosis.
The Problem With Psychiatric Diagnosis
When psychiatric services are submitted to insurance, diagnosis and documentation are generally part of the billing process. The diagnosis helps establish what condition is being treated and why the service is being billed.
That creates an important question:
What happens when a patient needs psychiatric evaluation or care, but the clinician does not believe that a particular psychiatric diagnosis accurately describes the patient? This is where, in my experience, the relationship between psychiatric diagnosis and insurance reimbursement becomes concerning.
Insurance requirements can create incentives around diagnosis that patients may never see.
A patient may leave a psychiatric appointment with a diagnostic label and assume that the psychiatrist arrived at that diagnosis simply because it was the most accurate description of the patient’s condition.
But the relationship between diagnosis and insurance is more complicated than that.
In my professional experience, I have seen circumstances in which psychiatric diagnoses do not adequately describe the person sitting in front of the psychiatrist. I believe patients should understand that a diagnostic label appearing in their medical record does not necessarily tell the whole story of what a psychiatrist believes is happening.
That does not mean that every psychiatric diagnosis is wrong, or that every psychiatrist allows insurance considerations to influence clinical decisions. It means that patients should understand that insurance reimbursement and clinical judgment are not always completely separate issues.
A Diagnosis Is Not the Same Thing as Understanding a Person
I also believe patients sometimes place too much importance on the diagnostic label itself.
A diagnosis can be very useful to a psychiatrist or other treating professional. It can help organize clinical thinking and guide treatment. But that does not necessarily mean that the diagnosis is the most important thing for the patient to know.
Psychiatric symptoms are complicated. The same symptom can have many possible explanations, and a person’s circumstances, history, relationships, physical health, experiences, and environment can all matter. A diagnostic word may summarize part of that picture, but it does not necessarily explain the person.
For that reason, I rarely consider it useful to give a patient a diagnostic label simply because a label exists. I am more interested in understanding what the patient is actually experiencing and determining what may help. There are circumstances in which knowing a diagnosis can help a patient understand the need for treatment or become more committed to addressing a problem. But the diagnosis itself should not become a substitute for understanding the person.
Insurance Can Also Affect Treatment
The influence of insurance does not necessarily stop with diagnosis.
Insurance plans can affect which medications are covered, whether prior authorization is required, whether a patient must try another treatment first, which providers are considered in-network, and what services the plan will reimburse.
As a result, there can sometimes be a difference between what a psychiatrist considers clinically appropriate and what an insurance plan readily covers.
That difference can matter.
If a treatment is changed because of insurance requirements, the patient may understandably assume that the new treatment was chosen solely because the psychiatrist believed it was the best choice. Patients may not always know what considerations entered into that decision.
Why I Do Not Accept Insurance
These concerns are among the reasons I do not accept insurance. I have chosen to keep my fee low so that I can remain accessible to patients without making insurance reimbursement part of the clinical relationship.
For me, this allows the focus to remain where I believe it belongs: on the patient. I want to be able to evaluate the person in front of me, consider the circumstances surrounding that person, and determine what I believe is appropriate without making an insurance company’s reimbursement requirements part of that decision.
This does not mean that insurance is inherently bad or that every insurance-covered psychiatric treatment is inappropriate. It means that I believe there is value in keeping the clinical relationship as independent as possible from the financial requirements of an insurance system.
What Should Patients Ask?
If you receive a psychiatric diagnosis, you have every right to understand why it was given.
You can ask:
- What led you to this diagnosis?
- What symptoms or circumstances support it?
- Were other explanations considered?
- What purpose does this diagnosis serve in my treatment?
- What treatment are you recommending, and why?
- Are there other reasonable treatment options?
- Did insurance requirements influence any part of my evaluation?
- Did insurance requirements influence my diagnosis?
- Did insurance requirements influence the treatment being recommended?
- Are there insurance requirements that affect what treatments are available to me?
You can also ask your insurance company what your plan covers and what requirements apply.
Most importantly, remember that a diagnosis is a clinical tool, not a complete description of who you are.
And insurance coverage is not the same thing as clinical judgment.
The two can overlap, and patients deserve to understand when they do.
The Goal Is Appropriate Care
Psychiatric care should begin with the person, not with a billing code. The goal should be to understand what the patient is experiencing, consider the possible explanations, and determine what approach is appropriate.
Insurance can be an important resource for patients. But patients should also understand that the requirements of an insurance system can become part of the environment in which psychiatric diagnoses and treatments are made.
That is why I believe patients should ask questions, understand their options, and remember that the most important issue is not simply “What is my diagnosis?”
It is:
“Do we understand what is happening to me, and are we addressing it appropriately?”
