A guide to out-of-network benefits
Does insurance cover therapy in California?
The most common reason people stall out on starting therapy is not the fee. It is the phrase “out-of-network,” which most people read as “I pay all of it.” Frequently you do not. This page walks through how it works.
The short answer
Most California PPO plans reimburse part of what you pay an out-of-network therapist. You pay your therapist directly, they give you an itemized receipt called a superbill, and you submit it to your insurer for partial reimbursement, typically 4 to 8 weeks later. Reimbursement is a percentage of the insurer’s own allowed amount for your area, not of your therapist’s fee, which is why the same $250 session can be reimbursed $160 for one person and $40 for another. HMO and EPO plans generally do not reimburse out-of-network care at all outside emergencies.
In-network vs out-of-network
Why almost every experienced therapist here is out-of-network.
In-network means your therapist has contracted with your insurance company and accepts a negotiated rate. Out-of-network means they have not.
If you have wondered why so many experienced clinicians in Carlsbad, Encinitas, and the rest of North County do not take insurance, the answer is not greed, though we understand why it may look that way from the outside.
Insurance panels reimburse well below private-pay rates in this market. They pay on delays of thirty to ninety days. They require a diagnosis from the first session, which means a person who is grieving a parent or trying to decide whether to leave a marriage has to be labeled with a disorder to receive care. They can request clinical records. They can decide how many sessions are medically necessary, which is a determination made by someone who has never met you.
A lot of clinicians look at that arrangement and conclude it degrades the work. So they operate outside it and give you the paperwork to seek reimbursement yourself. That is the trade: you take on the administrative burden and the cash-flow risk, and you get a clinician who is not making treatment decisions with a utilization reviewer in the room.
Superbills
What a superbill is, precisely.
A superbill is an itemized receipt containing everything your insurance company needs to process an out-of-network claim. It is not a bill you owe. You have already paid. It is documentation that the service happened.
- Your name and date of birth
- Dates of each session
- The CPT code for each session, which describes what service was provided
- An ICD-10 diagnosis code
- The therapist’s full name, license type and number, NPI number, and practice tax ID
- The fee charged and confirmation that you paid it
The CPT codes you will see on a therapy superbill
| Code | What it covers |
|---|---|
| 90791 | Diagnostic intake evaluation (usually the first session) |
| 90832 | Psychotherapy, approximately 30 minutes |
| 90834 | Psychotherapy, approximately 45 minutes |
| 90837 | Psychotherapy, 60 minutes or more |
| 90847 | Family or couples therapy with the patient present |
Most standard 45-minute sessions are billed as 90834. Telehealth sessions use the same codes with a modifier appended. Our own superbill practice is described on the cost and insurance page.
The number that matters
Reimbursement is based on their number, not your therapist’s.
Your insurer does not reimburse a percentage of what your therapist charges. It reimburses a percentage of what it has unilaterally decided the service is worth in your zip code. That figure is called the allowed amount, or the usual-and-customary rate.
Suppose your plan says it covers 70 percent of out-of-network outpatient mental health after your deductible. You see a psychologist in Carlsbad for $250. You might reasonably expect $175 back.
If your insurer has set the allowed amount for CPT 90837 in your area at $220, you get 70 percent of $220, which is $154. That is a fine outcome. If they have set it at $110, which is not unusual, you get $77. Same plan language, same session, same fee, radically different result.
Insurers are not required to publish these figures prominently, and the customer service representative on the phone may not volunteer them. You have to ask, specifically, by code.
Before your first session
The four questions to ask your insurer.
Call the member services number on the back of your card. Say you want to verify out-of-network outpatient behavioral health benefits. Write down the answers along with the date and the representative’s name. This call takes about ten minutes and it is the highest-value ten minutes in the entire process.
-
Do I have out-of-network benefits for outpatient mental health?
If the answer is no, stop here. You have an HMO or EPO and reimbursement is not available. Your options are an in-network provider or private pay.
-
What is my out-of-network deductible, and how much have I met this year?
You typically pay the full fee until this is satisfied. A $3,000 unmet deductible in July changes your plan for the rest of the year.
-
After the deductible, what percentage do you reimburse?
For out-of-network outpatient mental health, this is commonly 50 to 80 percent. Note that the percentage is applied to the insurer’s allowed amount, not to your therapist’s fee.
-
What is your allowed amount for CPT code 90837 in my zip code?
This is the question almost nobody asks and the only one that tells you your actual reimbursement. Two more worth adding if you have the patience: is there a session limit or pre-authorization requirement, and is there an annual out-of-network out-of-pocket maximum.
Filing
How to actually submit a claim.
The process is tedious rather than difficult.
-
Collect your superbills
Monthly batching is easier than session by session, and it protects you from the timely filing deadline.
-
Log in to your insurer’s member portal
Find the out-of-network claim submission section. Most major carriers now allow direct upload. If yours does not, download the paper claim form and mail it.
-
Complete the member claim form
You will need your policy number, the provider’s NPI and tax ID (both are on the superbill), and the total amount paid.
-
Upload the superbill and submit
Keep a copy of everything you send, along with the date you sent it.
-
Expect four to eight weeks
Reimbursement arrives by check or direct deposit.
-
Read the Explanation of Benefits when it comes
The EOB shows the allowed amount, what was applied to your deductible, and what was paid. If something looks wrong, the EOB tells you why.
Third-party services now exist that will file out-of-network claims on your behalf and in some cases front the reimbursement, so you only pay your effective cost at the time of session. They take a percentage. Whether that is worth it depends on how much you hate paperwork.
When a claim is denied
Denials are common and frequently reversible.
- Missing or invalid information. A wrong NPI, a missing diagnosis code, an unsigned form. Fix and resubmit.
- "Not medically necessary." The insurer is questioning whether treatment is warranted. Your therapist can provide a letter of medical necessity describing symptoms, functional impairment, and treatment plan. This overturns a meaningful share of denials.
- Filed outside the timely filing window. Most plans require submission within 90 to 365 days of service. Miss it and the claim is dead. This is the main argument for batching monthly instead of saving a year’s worth.
You have a right to appeal any denial. California also has an Independent Medical Review process through the Department of Managed Health Care for the plans it regulates, which lets an outside reviewer overturn a denial. Insurers know most people give up after the first no. A surprising number of appeals succeed.
The question underneath
Some people could use their benefits and choose not to.
Using insurance requires a diagnosis, and that diagnosis becomes a permanent part of a medical record. For the overwhelming majority of people this has no practical consequence whatsoever, and we do not want to feed anxiety about it. But it matters for a small number of situations: certain security clearances, some professional licensing contexts, and specific kinds of individual life and disability underwriting.
More often, what people are actually weighing is subtler than any of that. They are deciding whether they want the fact of having gone to therapy to exist as a record somewhere. That is not paranoia. It is a real preference about privacy, and it is a legitimate reason to pay privately even when you could be reimbursed.
If that is your situation, it is a normal and common choice. And if cost then becomes the barrier, the options in our guide to what therapy costs are worth reading, particularly the sections on group therapy and sliding scales.
Frequently asked
Common questions about insurance and therapy.
Does insurance cover therapy?
Most California health plans cover mental health treatment in some form, because state and federal parity laws require mental health benefits to be comparable to medical benefits. What varies enormously is whether your plan covers a therapist who is out-of-network. PPO plans usually include out-of-network outpatient behavioral health benefits that reimburse a percentage after a deductible. HMO and EPO plans generally cover in-network providers only, except in emergencies.
What is a superbill for therapy?
A superbill is an itemized receipt your therapist gives you so you can seek reimbursement from your insurer for out-of-network care. It includes the dates of service, the CPT procedure code for each session, an ICD-10 diagnosis code, the therapist’s name, license number, NPI, and tax ID, and the amount you paid. You submit it to your insurance company yourself, usually through their member portal, and reimbursement typically arrives 4 to 8 weeks later.
How much will insurance reimburse for out-of-network therapy?
Reimbursement is calculated from your insurer’s allowed amount, not from what your therapist charges. The insurer sets a usual-and-customary rate for your geographic area and reimburses a percentage of that figure after your out-of-network deductible is met, commonly 50 to 80 percent. This is why two people seeing the same therapist at the same fee can receive very different reimbursements. Ask your insurer specifically for the allowed amount for CPT code 90837 in your zip code.
What CPT codes are used for therapy?
The common outpatient psychotherapy codes are 90791 for a diagnostic intake evaluation, 90832 for roughly 30 minutes of psychotherapy, 90834 for roughly 45 minutes, 90837 for 60 minutes or more, and 90847 for family or couples therapy with the patient present. Most standard 45-minute sessions are billed as 90834. Telehealth sessions use the same codes with a modifier.
Is couples therapy covered by insurance?
Often not, and the reason is structural rather than arbitrary. Insurance reimburses treatment of a diagnosed mental health condition in an identified patient, and relationship distress by itself is not a billable diagnosis. Couples work can sometimes be billed as 90847 when one partner carries a qualifying diagnosis and the couples work is part of treating it, but many clinicians will not bill this way because it misrepresents the treatment. Assume couples therapy is a private-pay expense and treat reimbursement as a bonus.
Why do so many good therapists not take insurance?
Insurance panels typically reimburse well below private-pay rates, pay on delays of 30 to 90 days, and require a mental health diagnosis in the client’s permanent record from the first session. They can also request clinical records and limit the number of sessions they consider medically necessary. Many experienced clinicians conclude that the administrative burden and the clinical constraints are not worth it, so they work out-of-network and provide superbills instead.
Does using insurance for therapy create a permanent record?
Yes. Billing insurance requires a diagnosis, and that diagnosis becomes part of your medical record. For most people this is unremarkable and has no practical consequence. It is worth thinking about if you hold or expect to seek a security clearance, certain professional licenses, or specific types of individual life and disability insurance underwriting. Paying privately avoids creating that record, which is one reason some people choose it even when they could use benefits.
Does Coastal Therapy Group take insurance?
We are private pay and out-of-network with all plans, and we provide superbills you can submit for reimbursement. Our full insurance policy, our fees in actual numbers, and our Good Faith Estimate practice are all on our cost and insurance page.
Reid Kessler, PsyD (he/him) is a licensed psychologist (PSY29855) and the founder of Coastal Therapy Group, which he started in 2018 and has grown to four offices across North County San Diego and Pasadena. He sees clients at the Encinitas and Vista offices and online throughout California, and serves as Training Director for the practice’s postdoctoral fellowship program.
We are happy to talk through the cost side first.
A free 15-minute call with a therapist, before you commit to anything. Carlsbad, Encinitas, Vista, Pasadena, or online across California.