Guide to Mental Health Insurance Co-Payments, Co-Insurance, and Deductibles

This guide hopes to exhaust your understanding of co-payments, co-insurance, and deductibles for mental health insurance claims in as few of words as possible.

Many of us may argue about the sexiness of understanding behavioral health copayment lingo, it does impact enormous amounts of people every day, both as patients and as providers.  This topic becomes less confusing when you think about it in terms of “what a client owes” and “to whom”.

If you don’t want to deal with understanding any of this, we provide a mental health insurance billing service at TheraThink to help.  This article will explain the differences between these terms but to find out the actual amounts that you are owed by the client, you’ll need to do your billing and EOB accounting.

What The Client Owes And To Who

Depending on the insurance plan of the mental health patient, that new patient will need to pay a recurring fee to their insurance company as will probably need to pay you a small sum in person to see you as a specialist.  The amounts of each are determined by their behavioral health insurance plan.

Most insurance plans have one of two possible options:

  • A copayment made up front at the time of the session OR
  • A deductible and coinsurance

To find out their benefits, you’ll need to contact their insurance plan on a call and ask.   We also help with this for free with our billing service.

Mental Health Insurance: Co-Payment

Usually, most patients will be charged a flat-rate per session called a co-payment.  Normally these will range from $10 to $30 USD per session.

To find out how to find a new patient’s copayment, you need to call the insurance company to find it.   For a script to do so, check out our article: how to never get denied mental health claims again.

Mental Health Insurance: Co-Insurance

30 percent signA plan that charges a patient in session via a relative amount to how much the session will be reimbursed for by the insurance company, is a plan utilizing “co-insurance”.

Let’s assume that you receive $100 for a normal individual 45 minute therapy session based on your contract with Insurance Co X.  In total, you, the provider, will be paid $100 from both the patient and the insurance company.

The patient’s plan has a 30% co-insurance rate, and they will pay $30 per session (.3 * 100).  The insurance company owes you the remaining 70% or $70 (.7 * 100).  Combined you receive $100.

So How Much Do I Charge In Session with Co-Insurance?

Because you might not know your exact reimbursement rate for each CPT code you use, you probably won’t know the exact contracted rate — the $100 from the above example.

We recommend being conservative about what you charge your clients in session, letting them know they have co-insurance (because you always verify their benefits), and settling up at the end of every payment cycle.

So with the above example: You actually assume you’ll be receiving $65 per session and you know the patient has a co-insurance of 30%.   You do the math (.3 * 65 = $19.50) and you then tell them it’s a $15 copayment and you will settle up the remaining $4.50 and change after you receive each EOB (video guide on how to read them and understand the copayment here).

Mental Health Insurance: Deductibles

The deductible of a mental health insurance policy is the amount that’s owed by the client, first, before the insurance company will start to share reimbursement (via copayment/coinsurance and the insurance company).  Hopefully you have “your deductible met,” meaning that there is no outstanding deductible amount to fulfill before the insurance company helps with reimbursement.

If there is an outstanding deductible, the patient will need to cover the cost of the services as per their EOB, directly to you, the provider.  So if “the patient has $1200 met on their $1500 deductible” that means that they will be paying for $300 worth of sessions with you out of pocket.  At a contracted rate of $100, that’s three sessions charged “out-of-pocket” to the patient directly.  Both your EOB and the patients EOB will reflect this information.

It does help to have an expert explain the jargon in plain English and with our EOB accounting and billing service at TheraThink, we make it easy to understand what’s going on with your claims.

Here’s a Great Example of an EOB with a Deductible and Co-Insurance Payments


With patients with outstanding deductibles, we recommend you always charge the contracted rate for that service code in person for your first session.  Depending on your feeling of confidence, you can choose to charge the full amount in person each session until their deductible is met or charge their copayment and then settle at the end of each payment period.

Most offices charge the copayment regardless of the deductible and then settle at the end of each pay period.  We encourage you to charge the full amount in person for the first session to ensure you collect that money if the patient decides not to work with you long-term.


I can’t figure out all this crap!  What the hell!

Yeah, so it can be confusing.  Here’s one simple trick you can always use!

==> Simple Trick: File your claims, then refer to the EOB, then charge the patient. <==

Oh, so if they have a $6.50 co-insurance / patient responsibility for each session and this EOB has 5 sessions, then I just multiply them up and charge them $32.50?


Yeah yeah but what if they have a deductible and it’s got $1000 left on it?

Read that EOB and look at the column where it says “deductible” or “co-insurance” or “co-payment”.  That’s the secret sauce that tells you exactly what you need to be charging the patient for each session!

Ah ha!  So I just look at the EOB and add up all the “patient responsibility” amounts and charge that to the patient?!  And if they have a deductible it’ll just say the amount they owe which will be the same as my contracted rate?

You got it!!! Woo!

Okay but really I just can’t handle this crap.

We run a billing service if you really need it!

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