Home » Pro » Private Practice » 4 Steps to Breaking Up with Managed Care

Private Practice
with Julie Hanks, MSW, LCSW, BCD

4 Steps to Breaking Up with Managed Care

go your own way!

Breaking Up is Hard to Do

We’ve talked a lot recently about the benefits of switching from using a managed care system to a private pay model. It benefits your clients, it benefits you, and overall it just benefits your practice (click here for a post detailing the math and financial advantage of a self-pay model)! But how exactly do you do it? It’s quite a change, so it can be difficult to know where to start. Here are 4 strategies to help you make the transition:

 1) Resign in Waves       

Instead of trying to go cold turkey by leaving your panels at once, pick one or two to begin. I suggest choosing the companies that cause you the most headaches, give you unreasonable hoops to jump through, are infamous for not paying on time, and have the lowest reimbursement rates (most therapists I’ve consulted have no problem identifying which ones these are). Make the transition by weaning off of managed care panels one at a time.

While you are doing this, you need to be ramping up your REST “marketing” process. This will help you attract full-fee clients. Do them simultaneously to secure future business for your practice.

2) Review Your Contract   

Carefully and meticulously read the details of your contract with the insurance companies. What is the length of time required before resignation? You don’t want to get hit with fees or have your transition timeline thrown off because you didn’t quite understand your contractual obligations, so do your research and give yourself plenty of time.

3) Write An Official Resignation Letter    

After you’ve determined the timetable you have, sit down and write your letter to officially resign from the insurance panel(s) you’ve chosen. Be clear, concise, and professional. No need to go into detail about your reasons for ending your business with a certain company. Firmly express your decision to resign. Also, it’s a good idea to follow up to ensure that your letter was received.  

4) Prepare Your Clients

And finally, perhaps the most important step to take in making the transition to a private pay model is to let your clients know. Give them plenty of notice (three months minimum), and present them with a considerate and professional letter that clearly states the upcoming changes. Also, offer them options. If they are close to completing treatment, work with them to finish their sessions before you resign from that particular panel. If your clients desire to stay with you and will be transitioning to paying out of pocket, begin to decrease the length or frequency of their sessions if needs be. It’s amazing how some people can turn on the motivation when they have to! You also can educate your clients and encourage them to explore out-of-network benefits. Or you might prepare to transfer clients to a trusted colleague.

When I made the change, my clients were exceptionally understanding. I believe part of this was that I informed them in a confident and considerate way, and I was open to feedback and helping clients process their emotions about it. I was also able to use this experience as a way to model self-care and making difficult decisions. Overall, this was remarkably successful, and the majority of my clients stayed with me!

timthumbClick here for access to the full webinar of all the ins and outs of Breaking Up With Managed Care.

Get practice tips and blog updates in your inbox. Sign up for the Private Practice Toolbox Newsletter here.

Join my Private Practice Toolbox Facebook group and connect with 2800 therapists around the globe in 2 simple steps: 1) Click request to join the group and 2) Fill out this brief questionnaire before you’ll be added to the group.


4 Steps to Breaking Up with Managed Care

Dr. Julie Hanks, LCSW

Licensed therapist turned business consultant Dr. Julie Hanks, LCSW has over 20 years in the mental health field & 12 years in private practice as owner of Hanks consults with therapists all over the world to build a fulfilling and profitable therapy business and attract cash-pay clients through technology and social media. Follow Julie on Twitter & Facebook.


No comments yet... View Comments / Leave a Comment

APA Reference
Hanks, D. (2015). 4 Steps to Breaking Up with Managed Care. Psych Central. Retrieved on February 22, 2020, from


Scientifically Reviewed
Last updated: 27 Jan 2015
Last reviewed: By John M. Grohol, Psy.D. on 27 Jan 2015
Published on All rights reserved.