Using Demand Analysis to Examine Private Practice Mental Health Providers’ Decision to Accept Health Insurance

Less than half of insured Americans can access mental health care due to a variety of barriers, including low provider participation in insurance networks. Providers report insufficient reimbursement rates and administrative burdens as reasons they do not accept insurance. We examined the importance of these barriers and the extent to which reimbursement rates would need to increase for private practice providers to accept insurance. Private practice mental health providers (i.e., psychologists, marriage and family therapists, mental health counselors, and social workers) completed an online survey containing two behavioral economic tasks. In the Criteria Ranking Task, providers (n = 326) ranked barriers that most deterred them from accepting insurance, reporting insufficient reimbursement rates as the most important, followed by administrative burdens. In the Hypothetical Demand Task, providers indicated the likelihood of accepting Medicare at various reimbursement rate increases with and without hypothetical administrative assistance. Participants indicated they would accept insurance following 83% rate increases (P_max = $188.97) for doctoral providers (n = 188) and 118% rate increases (P_max = $168.51) for master’s-level providers (n = 112). If provided administrative assistance, participants indicated they would accept insurance following 100% rate increases (P_max = $206.28) for doctoral providers and 169% rate increases (P_max = $207.90) for master’s-level providers. Results support existing research findings that insufficient reimbursement rates and administrative burdens are the primary barriers to mental health providers accepting insurance. Policy efforts to increase access to mental healthcare must consider the incentives and burdens that impact providers and their decision to accept insurance.