How to Transition from Insurance to Private Pay
in Private Practice
I’ve heard from many of you that you have a full caseload consisting almost entirely of insurance-based clients and now you’re hoping to transition from insurance to a private pay practice. The problem is, now you’re having trouble finding clients willing to pay your full rate out of pocket.
If this is you, you don’t have to feel stuck accepting insurance forever! In this article, I share my top tips for attracting private pay clients when you’re looking to transition off of insurance panels.
I know some of you might be wondering why someone would want to transition out of accepting insurance if they have a full practice. I have an article all about why I have a cash-only therapy practice, so feel free to check that out first to hear all about the pros and cons of accepting insurance.
Assuming you’re already in the boat of wanting to transition off of insurance panels, the question then is how to find clients who are willing to pay your full fee out of pocket.
Strategy for transitioning from insurance to private pay
Essentially, the strategy here is similar to if you were to launch a private practice from scratch and you wanted to accept only cash-paying clients.
One strategy that differs from starting a practice from scratch is you have the option to choose how you transition off of insurance panels. Here are a few options for how to transition from insurance to private pay:
- Leave insurance panels cold turkey
- Transition off of one insurance panel at a time
- Wait until you have more private pay clients before leaving insurance panels.
The strategy you decide to use is completely up to you based on what fits best for you, your practice, and your clients.
Tips to transition from insurance to private pay
Make no mistake about it: shifting from an insurance-based to a private pay practice is very much like starting a private practice from scratch. The reason for this is it’s important to have a proper marketing strategy when you aren’t getting referrals from insurance panels directly anymore. You can learn all about how to do that in my free guide: Start a Private Practice in Counseling
However, here are two key tips that, with the right focus, will give you the success you need to fill your practice with cash-paying clients:
Step 1: Name your niche
I talk about this ALL the time! If you yet haven’t identified a niche, there’s a chance you will struggle to find clients willing to pay you out of pocket. The good news is, you probably already have a niche – even if you don’t know it yet – and it’s simply a matter of learning how to name it concisely for potential clients to understand it.
I’m going to spend a little longer on this tip in this article because I truly believe that if you can nail these two tips, you can expect to fill your practice with private pay clients.
Cons of not having a niche
If you market yourself as a “generalist,” potential clients will see your high rate and likely walk away. But if you are one of the only people in your area who specializes in a certain niche, people are likely willing to pay a much higher rate to see the top specialist for animal loss, or the only therapist in town who works with couples navigating a dual diagnosis, for example.
Benefits of having a niche
A concern I often hear is that people don’t want to niche down too much because they’re afraid they’ll end up working with just one type of client. The reality is, not all of your clients will fall directly within your specific niche. In time, your reputation will precede you and you’ll begin receiving referrals for all types of presenting issues.
If you haven’t yet identified your niche, focus on this step before diving into the next one. I have an article walking you through an exercise to help you identify your niche so feel free to check that out here:
Once you’ve nailed down your niche, be sure to be clear about it in your marketing materials – especially your website. Feel free to check out my article all about writing great website content:
Step 2: Develop a Marketing Strategy
Marketing strategy?? Yikes!
I hope I didn’t lose you at the word “marketing.” It’s not as complicated as you might think!
For most therapists who accept insurance, they are largely able to get away with skipping this step when they launch because insurance is like a built-in referral system. Now it’s time to buckle down on your marketing strategy in order to transition away from that referral source.
In other words, if you do everything the same and simply slap your cash rate on your website, it’s unlikely to be enough for most therapists to successfully make this transition.
Avoid this mistake when developing a marketing strategy
A mistake I often see therapists make with their marketing strategy is to try to utilize all the marketing mechanisms their peers use. This can be overwhelming and it’s also often rather ineffective.
Have you done this before? I sure have! Maybe you’re going to networking meetings, blogging weekly, positing videos, and keeping up an Instagram page, but you’re not getting any referrals. Often when we spread ourselves too thin we lose track of who we are and how we can meet clients’ needs.
Simplify your marketing strategy
Instead, once you’ve identified your niche, it’s important to consider your ideal client, what their pain points are, and find one or two strategies to help meet their needs.
Do you specialize in working with family members of individuals with a terminal diagnosis? Maybe consider offering free workshops for family members at a local hospice. Find a way to put yourself directly in front of your ideal client given your niche, and genuinely help them.
This is a tried and true strategy that is surprisingly effective. If you’d like help with developing a marketing strategy, check out my article: How to Get Counseling Clients | Marketing Your Private Practice
You can do this!
Whether you ditch insurance all at once or you slowly transition out, by implementing these tips you’ll find your ideal clients contacting you before you know it.
In addition to these tips, you may be surprised to find that once you leave insurance panels, some number of your existing clients will still choose to stick with you and pay your full rate out of pocket. There’s nothing worse than having to find another therapist! So if you’re doing good work and your clients can afford it, they’re likely to decide to continue working with you.
I hope you found these tips helpful as you consider transitioning from insurance to a private pay practice. And until next time, from one therapist to another: I wish you well!