Deductibles may be the most confusing, annoying, and disruptive part of working with any client who seeks reimbursement from their insurance. So even if you have never signed a contract with an insurance plan, this is stuff EVERY therapist should know.

What's a deductible? This is the amount that a client with insurance has to pay out-of-pocket before the plan pays a dime.

Do all plans have deductibles? Thankfully, no. This is more common if a client sees an out-of-network therapist (one who has NOT signed a contract with the health plan), but many plans have a deductible for all providers.

What's changed? In the olden days, deductibles were usually $100, maybe $250 at the most. But lately I have seen clients with $1,000, $3,000, even $8,000 deductibles. This coverage is great if you get hit by a bus, but not so great if you have a mental or physical illness.

Why the increase? Health plans are not making the huge profits they used to enjoy, so have developed this way to shift the high cost of health care to their members. Coupled with ever-increasing premiums and larger co-payments (often $30 or $40), therapy is becoming much more expensive for clients with insurance.

Why is this so important? Let's look at an example. You are a contracted provider with the client's health plan, which pays you $60 per session. Your client pays her $20 co-payment at each session. At the end of the month, you submit a claim. When the Explanation of Benefits (EOB) arrives six weeks later, you get no payment because the client has a deductible of $600. Now ten weeks into treatment, you turn to your client to pay the $400 balance (remember she paid $20 at each session). At the very least your client may be ticked off. Even worse, your client may not be able to pay you, and may drop out of treatment. Worse yet, your client may have already ended treatment at the ninth session, making it harder to collect.

What if my client pays in full when she comes? Let's say she submits the bill to her insurance plan, and finds out when the claim is processed that the plan won't reimburse her because of the deductible. She may have counted on this reimbursement when choosing to see you. So, she might be annoyed that you didn't give her this important information ahead of time, and if she isn't going to be reimbursed, she may be unable to continue treatment.

There's more. Let's return to the example above. As a preferred provider, the plan will only count your $60 contracted rate toward the deductible — you cannot charge more for any session you have with this client. If your client has a $600 deductible, the plan will not start paying until the 11th session.

Let's say you are NOT a contracted provider with the plan. In our example, you charge $125, but the plan caps its reimbursement at $80 per session for an out-of-network provider. Due to your client's $600 deductible and this $80 cap, she will not be reimbursed at all until the seventh session. Starting at the eighth session, her plan won't reimburse her for $20 of each session (this is her co-payment, the client's portion of the bill) AND won't reimburse the $45 difference between the $125 she paid you and the plan's $80 cap. Final tally? Of the $125 she paid you for the session, she will not be reimbursed for $65 of her payment, or more than half.

Just to make this more annoying, some plans have a separate mental health deductible, which may be split between you and any psychiatrist or other therapist (e.g., a couples therapist) the client is seeing. This means the client's visits to medical doctors may not reduce her mental health deductible.

One final complication: The deductible usually starts again at the beginning of the calendar year. This means when your client uses up her deductible, the whole out-of-pocket dance will start again in January.

My advice? Remember that even if you've never signed a contract with an insurance plan, this deductible stuff applies to your clients, too. This is one reason I STRONGLY advise ALL therapists to check coverage after the first session. In fact, I often get insurance information on the first phone call, telling my client that I want to be sure there are no surprises down the line. After this call, I'll be able to inform my client of any reimbursement for the first session(s). Then my client can decide if she can afford treatment — and I won't be stuck trying to collect for an unpaid session.

Barbara Griswold is the author of Navigating the Insurance Maze: The Therapist's Complete Guide to Working with Insurance — And Whether You Should (www.navigatingtheinsurancemaze.com). In addition to her private practice in San Jose and serving on the CAMFT Ethics Committee, she publishes a monthly insurance e-mail newsletter, and provides consultations to therapists with insurance questions.