Though at any given time about a third to half of my private practice clients pay for counseling using a health savings account, I’m always surprised to find how many of my fellow clinicians don’t realize how super easy it is to accept health savings account payments and still receive their full fee.
If you are in this boat, I don’t blame you! When I first started in private practice I didn’t even know what a Health Savings Account was, let alone how to accept HSA payments. I assumed it would be super complicated. But it really isn’t! In this article, I walk you through two ways to accept Health Savings Accounts in private practice.
What are Health Savings Accounts?
Ya’ll, I think health savings accounts (HSAs) are the bomb.com. HSAs are savings accounts that allow individuals to set money aside tax-free that can be used exclusively for medical expenses not covered by insurance.
There’s a bit more information that goes into understanding who can have a Health Savings Account. If you’d like to understand HSAs a bit better, this video does a great job summing up everything you need to know about HSAs in about two and a half minutes:
Who can Accept Health Savings Accounts?
Health Savings Accounts can be spent on what’s referred to as “qualified medical expenses.” Qualified medical expenses include chiropractor bills, prescriptions, glasses, and yes, mental health care!
If you’re interested in knowing what expenses HSAs cover, you can view the full list of qualified medical expenses at the HSA center website. HSA accounts can cover quite a large number of possible expenses!
Most importantly for us therapists in private practice, therapy is most definitely covered by HSA accounts.
What does this mean??
This means that if you put in a little bit of work on the back end, your clients can pay for counseling with pre-taxed money. Score! This is the ultimate win-win situation: you can charge your full rate, but your client is essentially receiving counseling at a discount matching their tax rate. If they typically pay 30 percent of their income to taxes, they are effectively receiving counseling services for 30 percent off.
I was so amazed by this when I found out that I thought it was too good to be true. But it’s absolutely true! It’s fantastic!
Accept Health Savings Accounts in Private Practice
I know you might be thinking: sounds great, but how much work will I have to do? Is it like billing insurance?
…Not at all!
There are two ways to go about accepting health savings accounts in private practice. I’ve done both ways and both work equally well. You can either accept HSAs the old-fashioned way by supplying your client with a superbill, or do it the 21st-century way by swiping their HSA debit card through a credit card reader. I walk you through how to do both here.
Accept HSAs the Old-Fashioned way with a Superbill
This strategy works essentially the same way that out-of-network insurance coverage works: you see a client for a therapy session, they pay your full fee out of pocket directly to you, you offer them a detailed receipt called a superbill, and they submit that receipt to their HSA account to receive reimbursement.
If you’re not familiar with what a superbill is, it’s essentially a detailed receipt including your NPI number, tax ID number, your client’s name, date of birth, date of service, CPT code, and the amount your client has paid. You can learn more about superbills by reading this article by Continuum.
Most health savings accounts don’t require the same degree of detail that’s reflected in a superbill receipt, but I’ve come upon some snags where a few HSA providers really did expect all of this information. It’s best to fill out the detailed receipt the first time so you can avoid having to go back and forth adding more information to submit to HSAs later.
If a client is submitting a superbill for HSA reimbursement I don’t include their diagnosis code on the superbill receipt. HSAs don’t need a client’s diagnosis in order to provide reimbursement, so it’s best to avoid offering up such personal protected health information.
Once the superbill is in your client’s hands, the ball is in their court to submit to HSA for reimbursement and take care of the rest.
Accept HSAs the 21st-Century way Using a Credit Card Reader
Though the old-fashioned strategy totally works and is completely worth offering to your clients, there is a much better way to take payments from HSAs that is much easier to use for all parties.
Most clients with an HSA or FSA account receive a debit card affiliated with the account, or they’re able to request one. This card can only be charged by approved healthcare providers.
The good news is, therapists are approved providers! There is just a bit of work to do with your credit card service on the back end in order to show that you are indeed an approved provider.
I use Square. I’ve used Square for the last four years and I love it. If you use Square, you simply need to mark yourself in either the “medical services” category or the “medical practitioner” category when you first sign up for Square. At that point, you’ll automatically be approved to swipe those HSA cards through The Square app.
If you already set up your Square account and you selected a different category when you signed up, it’s not too late to fix it! Simply contact Square and they should be able to fix the issue within 24 hours.
I actually made this error when I first signed up with Square because I was a little confused what category I was supposed to mark myself as, and Square fixed it really quickly after I contacted them.
Of course, not every client has an affiliated magstripe card with their HSA account or they may simply prefer to receive a superbill, so it’s helpful to keep the superbill option available just in case your client prefers it.
A Note on Flexible Spending Accounts
Just as an FYI, although I’ve primarily spoken about health savings accounts in this article, pretty much everything about what I said also applies to Flex Spending Accounts (FSAs) as well.
Hopefully, this article has encouraged you to start accepting HSA payments if you haven’t been doing so already.
Until next time, from one therapist to another, I wish you well.