How to Smoothly Transition an Insurance Client to Private Pay

transitioning therapy practice to private pay

Recently I had a conversation with a friend of mine who complained that her therapist of several years decided to move away from taking insurance.

"I just don't know how I can afford her, but I really don't want to look for a new therapist." My friend said.

"Why don't you call your insurance company and ask what portion it will cover for a therapist out of network?" I asked.

To my surprise, my friend said that it didn't even occur to her to do that.

What surprised me even more, is that the clinician did not offer this information to her client whom she was seeing for several years. Here was a situation in which a long-term client relationship could potentially be lost. Ironically, this relationship would not be lost because of the business decision that the clinician made, which might be the right decision for her practice, but because of her poor communication.

As a clinician, you are trained to think in professional terms, and your business decisions are often a reflection of your professional thinking.

But your clients are not trained in your profession. They don't know what options are available for them when you make the decision to switch from insurance to private pay.

So if you decide that you want to keep a client you have developed a long-term relationship with, it is your duty to explain all the avenues they can take to keep seeing you.

It's true that many people have a high deductible for out of network services, in which case they need to be made aware of the benefits of becoming a private pay client.

But remember, most clients stay with a therapist because they like them and they don't want to look for someone else. Not everyone may be your ideal client, but if you want to keep her, regardless of the business decisions you will be making, you need to be more proactive in retaining her.

There is no guarantee that every one of your insurance clients will stay with you after your transition to private pay, but you will be able to keep a portion of your clientele if you develop a clear and simple communication process during that time.

  1. Spend time explaining all the payment options that are available to your client that would make it easier to afford your services. Just like you, your clients don't like dealing with insurance claims and they need to be armed with as much information as possible when they call their insurance.

  2. As I mentioned earlier, go over the benefits of paying you out-of-pocket. For example, most people don't know about the difference between disclosing their diagnosis to an insurance company and keeping therapy sessions private.

  3. Consider incorporating a sliding-scale option for your practice. You can determine ahead of time how many people you can offer it to and do it strategically. A loyal client will appreciate the gesture and will likely recommend you to someone else or remain with you longer.

  4. If your client decides that none of these reasons are convincing enough to pay out-of-pocket for therapy, make sure you talk to her about her next steps in finding a new therapist. It is not easy for a person to find the right therapist from an insurance database. Often it is a frustrating process that involves unanswered calls and a trial and error approach. If you can, recommend a colleague that takes insurance. It might seem that you are losing a client to your competition, but in essence, you create a good exiting experience for your client and opening a referral opportunity with your colleague. You are also leaving an open door for your client to return to your practice if she decides to pay out-of-pocket after all.


The extra time you spend with your client, trying to smoothly transition her from insurance to private pay, is an investment. Generally speaking, retaining an existing client is less expensive than finding a new one. Announcing the change in your practice billing without handholding your clients throughout this process is denying yourself the opportunity to work with a client who trusts you and looks forward to your sessions together.

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