Clawback or Claw Your Way Out: Why Private Pay Is a Decision You Won't Regret Making
I closed my group practice because of clawbacks. Not because I wanted to. Because the math stopped working and the system was never designed to protect me. Here is what I learned and what I want every therapist still on insurance panels to understand.
I closed my group practice because of clawbacks. That is the short version.
The longer version is that I built something, staffed it, saw clients, submitted claims, got paid, and then watched insurance companies come back and take that money. Not once. More than once. And by the time I understood the full picture of what I was dealing with, the math on keeping that practice open no longer worked. I had to downsize. I had to make hard decisions. And eventually I made the decision that private pay was not optional for me. It was survival.
I have since talked to hundreds of therapists across the country who have versions of the same story. And what I keep hearing is that most of them did not see it coming either.
So let me be direct about what clawbacks actually are and what they can actually do to a practice.
What Is a Clawback?
A clawback happens when an insurance company demands repayment of money they already paid you for sessions you already completed. Not future sessions. Past ones. Work you did, notes you wrote, clients you helped. Money you already spent paying your rent, your staff, your software, yourself.
The reasons vary. Sometimes it is a billing code dispute. Sometimes it is a documentation issue, a missing signature, an incorrect timestamp. Sometimes the insurance company made the error in the first place and still comes after you for the money. Sometimes a client's coverage changed and you had no way of knowing, and now you owe back every session you were paid for under the wrong plan.
None of that matters in the moment when the letter arrives. The letter just says you owe them money.
How Bad Can It Get?
Bad enough to close a practice.
A provider in Washington state had her firm taken apart by a single insurer over billing code disputes and documentation issues, including clawbacks for small clerical errors like a missing signature or an incorrectly written timestamp. Instead of allowing corrections, the insurer demanded all the money back. She estimates the firm lost approximately $1.5 million. She had to take out loans to pay her staff. She eventually closed. At the end, it was just her.
A community mental health center in Massachusetts received a single clawback demand for over $137,000.
A therapist in Georgia was blindsided by a demand covering six months of sessions with one client, issued a full year after the fact, because the insurer had paid out of the wrong plan. She had no way of knowing which plan was primary. She got the letter anyway.
In 2024, Optum began seeking repayment from clinical social workers across the country who had been paid at 100% of the Medicare physician fee schedule when the correct rate was 75%. That was the insurer's error. Therapists still got the recoupment letters. Solo practitioners reported being on the verge of closing because of the financial burden.
One therapist received a $189,000 repayment demand after an insurer requested two years of notes and deemed the documentation inadequate, without having reviewed a single note first.
These are not edge cases pulled from message boards. These are documented and reported.
There Is No Clock Working in Your Favor
Here is the part that does not get talked about enough.
You have billing deadlines. Usually 60 to 90 days after a session to submit your claim. Miss that window and the claim is denied, full stop.
Insurance companies do not have the same deadline to come after you.
States have different laws governing how far back an insurer can pursue recoupment from a provider, ranging anywhere from six months to a couple of years. But some states have no laws limiting clawbacks at all. And when it comes to Medicare, the lookback period for errors and recoupment can extend as far as six years, and state law would not apply, meaning your state insurance commissioner would not have the power to help you.
You are held to a strict timeline. They are not.
That asymmetry is not an accident. It is a structural feature of the system.
This Is Not a Billing Problem
I want to be careful here because I know some people will read this and think the answer is better documentation or better billing practices. And yes, clean notes matter and accurate coding matters. But the therapists I mentioned above were not sloppy. They were practicing in good faith inside a system designed without meaningful protections for providers.
One Georgia therapist described it this way: imagine it is payday and you are expecting your check to look a certain amount, and then your boss comes in and says you are not getting paid this week because they are unhappy with the job you did two years ago. And when she called the insurer to sort it out, she was sent in circles for hours of unpaid time trying to get answers from people who had no authority to give them.
This is a structural problem. And private pay is one of the only real protections against it.
When your income is not routed through a third-party payer, there is no mechanism for retroactive recoupment. The session happened. You were paid. It is done. You can build a budget around that. You can plan. You can breathe.
That is not a luxury. That is what a sustainable practice requires.
Where Do You Go From Here?
If you are still on insurance panels, I am not telling you to quit tomorrow. I know the financial reality of making that transition is real and it takes time. I have spent years helping therapists navigate exactly that process.
But I am saying this. Every therapist on an insurance panel right now is carrying financial risk they may not fully see. And the moment a clawback letter arrives is not the moment to start thinking about your exit strategy. That moment is now.
Private pay is not a dream. It is a decision. And for a lot of us, it is the only decision that makes a practice actually survivable.
References
NPR / ProPublica — Washington state practice closure, Anna DiNoto
https://www.npr.org/transcripts/nx-s1-5028551
Commonwealth Beacon — Massachusetts $137,000 clawback demand
https://commonwealthbeacon.org/health-care/clawbacks-threaten-mental-health-services/
Georgia Public Broadcasting — Georgia therapist Tracy Hooper, March 2025
https://www.gpb.org/news/2025/03/04/so-called-insurance-clawbacks-are-driving-georgia-mental-health-therapists-private
ClearHealthCosts — 2024 Optum Medicare clawback wave
https://clearhealthcosts.com/blog/2024/04/medicare-clawbacks-strike-therapists-nationwide/
Navigating the Insurance Maze — $189,000 demand, Medicare six-year lookback
https://theinsurancemaze.com/clawbacks/
DJ Burr, LMHC, LPC, Founder, Private Pay Practitioners
www.privatepaypractitioners.com
The Myths That Are Keeping You on Insurance Panels Longer Than You Need To Be
If you have been thinking about going private pay -- or you are already there but still second-guessing yourself -- chances are it is not a lack of information holding you back. It is a story. Probably more than one.
I have been working with private pay practitioners long enough to know that the barrier is rarely practical. It is almost always psychological. So let us name the myths out loud, because that is usually the first step to letting them go.
MYTH: No one will pay my full rate.
Someone is paying another therapist in your city full rate right now. The question is not whether clients will pay -- it is whether your messaging is clear enough to attract the ones who will.
One client leaving is not data. It is a data point.
MYTH: I'll lose all my clients if I leave insurance.
You may lose some. But aligned clients often stay, and new ones find you faster than you expect when your messaging finally speaks to the right person.
Feeling like you cannot afford to lose anyone is about scarcity, not strategy. Those are two different conversations.
MYTH: Private pay is only for elite practices.
Private pay means you have a direct, transparent relationship with your clients. That is not elitist. That is sustainable. The broken system is the one paying you $60 for a 53-minute session and calling it adequate.
MYTH: I need to be fully booked before I make the move.
You need a plan, not a full caseload. Waiting until you are fully booked to transition is like waiting until you are out of debt to start saving. The conditions will never feel perfect.
How many times have you said just a few more months?
MYTH: My clients need me too much for me to raise my rates.
That is not a pricing problem. That is a boundary problem wrapped in a clinical relationship. Your clients' financial planning is not your clinical responsibility.
MYTH: I have to accept every client who reaches out.
You are allowed to have a niche. You are allowed to say you are not the right fit. Saying yes to the wrong client means saying no to the right one.
MYTH: Going private pay means I don't care about access to mental health care.
A burned-out, underpaid therapist is not serving anyone well. You can be financially stable and mission-driven. They are not mutually exclusive.
If any of these hit close to home, you are not alone. This is exactly the work we do inside Private Pay Practitioners -- in the Facebook group, on the podcast, and inside our Patreon community every single month.
When you are ready to go deeper, here are three ways to do that:
The Crash Course is a live 3.5-hour session where we work through the real mechanics of building a private pay practice. Early bird pricing ends April 18. Register here: https://luma.com/io4va0y1
One-on-one coaching is available if you want to work through this specifically to your practice, your numbers, and your next move. 50 minutes for $300 or 90 minutes for $400. Book here: https://www.privatepaypractitioners.com
Patreon is where the ongoing support, monthly resources, and community live. If you want to stop doing this alone, that is the place. Join us: patreon.com/privatepay
You built a career worth protecting. Private pay is how you protect it.
DJ Burr, LMHC, LPC
Founder, Private Pay Practitioners
When to Raise Your Rates (And How to Tell Clients)
You need to raise your rates. You’ve probably known this for a while.
Maybe you calculated your sustainable rate and realized you’re charging $30 less than you need to. Maybe your expenses went up, and your income didn’t. Maybe you’ve gained experience and training, yet you’re still charging what you did when you were a new therapist.
Whatever the reason, you’re here. Let’s talk about how to actually do it.
When to raise your rates.
There’s no perfect time. But here are signs it’s overdue: You calculated your sustainable rate, and it’s higher than your current rate. You haven’t raised rates in over a year. You resent your work or your clients (often a sign you’re undercharging). You’re fully booked with a waitlist. Your expenses have increased. You’ve completed significant additional training.
If any of these apply, it’s time.
How much to raise.
If you’re significantly undercharging, consider a larger increase for new clients and a smaller, gradual increase for existing clients.
If you’re doing an annual adjustment, 3-5% is reasonable and expected.
There’s no rule that says you have to raise everyone’s rate at the same time or by the same amount. New clients pay your new rate. Existing clients can transition over time.
Telling existing clients.
Give advance notice. 4-8 weeks is standard. This is a courtesy and also good clinical practice - it gives time to process if money is a loaded topic for them.
Be direct. Don’t over-explain or apologize. You’re running a business and rates increase.
Here’s a simple script:
“I wanted to let you know that my rate will be increasing to $[amount] starting [date]. I’m giving you [X weeks] notice so you have time to plan. If you have any questions or concerns, we can absolutely talk about it.”
Then stop. Let them respond.
What if they can’t afford it?
Some clients will say the new rate doesn’t work for them. That’s okay. You have options:
Honor the relationship: “I understand. I can keep you at the current rate for [X more months] to give you time to transition.”
Reduce frequency: “Would it work to meet every other week instead of weekly?”
Refer out: “I want to make sure you get the support you need. Would it be helpful if I gave you some referrals to therapists with lower rates?”
What you don’t have to do: keep everyone at your old rate forever because you feel guilty.
The mindset piece.
Raising your rate will bring up stuff. Guilt. Fear of rejection. Worry about what clients will think.
Notice it. Feel it. Do it anyway.
Your rate isn’t about being greedy. It’s about sustainability. You can’t help anyone if you burn out because you’re not making enough to live.
Therapists who charge sustainable rates stay in the field longer. That’s good for everyone.
The rate calculator shows you exactly what you need to charge. Try it free: https://privatepaypractitioners.com/rate-calc
Marketing Your Private Pay Therapy Practice: Strategies That Actually Work
When you leave insurance panels, you lose the built-in client pipeline. No more being one of twelve names on someone's "in-network providers" list. No more guaranteed traffic from insurance directories.
Now you have to answer a question most therapists were never trained to answer: How do I get clients to find me AND pay my full rate?
The good news: it's absolutely possible. Thousands of therapists run thriving private pay practices. The not-so-good news: most marketing advice out there is either too generic ("just be authentic!") or too overwhelming ("you need a podcast, a YouTube channel, a TikTok presence, and a weekly newsletter").
Here's what actually works for private pay therapists—practical strategies you can implement without becoming a full-time content creator.
Start with the Foundation: Your Online Presence
Before you market anywhere, make sure people can find you and understand what you do.
Your website needs three things:
Clarity about who you help. Not "I help adults with anxiety, depression, trauma, life transitions, relationship issues, and stress." Pick one or two things. Be specific. "I help high-achieving women who can't turn off their brains" is better than a laundry list.
Your rates (or at least a starting point). Private pay clients are already self-selecting for people willing to pay out-of-pocket. Don't make them hunt for pricing or wonder if they can afford you. Transparency builds trust.
A clear next step. What do you want them to do? Call? Email? Book a consultation? Make it obvious and easy.
Psychology Today still matters. Yes, it's oversaturated. Yes, the interface is clunky. But it's still where most therapy-seekers start their search. Optimize your profile: specific headline, clear specialty, personality in your writing, and mention that you're private pay (this filters out people looking only for insurance).
Google Business Profile is free and underutilized. Claim yours, add photos, keep your hours updated, and ask satisfied clients if they'd be willing to leave a review. Local SEO matters more than most therapists realize.
The Networking Strategy Most Therapists Overlook
Here's a truth that might sting: the fastest path to a full private pay caseload is usually other therapists.
Not competing with them. Collaborating with them.
Build referral relationships with:
Therapists who are full and need somewhere to send overflow
Therapists with different specialties (you do trauma, they do couples—you refer to each other)
Therapists who take insurance and have clients aging out or wanting to switch
Therapists in neighboring areas or different license types
How to actually do this:
Join local therapist Facebook groups or listservs
Attend consultation groups (paid or free)
Reach out directly: "I specialize in X and I'm building my referral network. Would you be open to a quick call to see if we'd be good referral partners?"
When you refer OUT, you become someone people want to refer TO
Don't forget adjacent professionals:
Psychiatrists and psychiatric nurse practitioners
Primary care physicians (especially those with patients who mention stress, anxiety, relationship issues)
Dietitians, especially those working with eating disorders or emotional eating
Executive coaches, life coaches, career counselors
Attorneys (family law, estate planning) who see clients in crisis
One solid referral relationship can be worth more than a year of social media posting.
Content Marketing (Without Losing Your Mind)
You don't need to be everywhere. You need to be somewhere, consistently.
Pick ONE platform and commit:
If you like writing: blog posts or LinkedIn articles
If you're comfortable on camera: short-form video (Instagram Reels, TikTok)
If you prefer conversation: a podcast or being a guest on others' podcasts
If you want searchability: YouTube (second largest search engine after Google)
What to create:
Answer the questions your ideal clients are already Googling
Share your perspective on common misconceptions
Educate without giving away the therapy (teach concepts, not interventions)
Show your personality—people choose therapists partly based on vibe
What not to do:
Try to be on every platform simultaneously
Post randomly whenever you remember
Create content for other therapists when you want to attract clients
Burn yourself out trying to go viral
Consistency beats volume. One valuable post per week for a year beats 30 posts in January followed by silence.
Paid Advertising: When It Makes Sense
Most private pay therapists don't need paid ads to build a full practice. But they can accelerate things if you have the budget and the right setup.
Google Ads work best when:
You have a specific niche (people search "EMDR therapist near me" not "good therapist")
Your website converts well (no point paying for traffic if your site doesn't turn visitors into consultations)
You're in a competitive market where organic ranking is tough
Psychology Today "Featured" listings are mixed—some therapists swear by them, others see no difference. Test it for a month and track whether your inquiries increase.
Social media ads are generally less effective for therapists because people don't typically scroll Instagram looking for a therapist. But they can work for building an email list or promoting a specific offering (workshop, group, etc.).
Before spending money on ads, make sure your foundational presence is solid. Paid traffic to a confusing website is wasted money.
The Long Game: Reputation and Word of Mouth
Ultimately, the best marketing is doing good work and having people talk about it.
Ways to accelerate word of mouth:
At the end of successful therapy, mention that you always appreciate referrals
Stay connected with former clients through occasional newsletters (with their consent)
Be easy to refer to—make sure colleagues know your specialty and have an easy way to send people your way
Show up in your community (not for marketing purposes, but because you're a person who exists outside your office)
Private pay practices often take 1-2 years to fill organically through reputation alone. Marketing strategies can shorten that timeline, but there's no substitute for being good at what you do and treating people well.
What Doesn't Work
A few things to stop wasting energy on:
Trying to convince insurance clients to go private pay. It's possible, but it's an uphill battle. Focus on attracting people who are already willing to pay out-of-pocket.
Competing on price. Private pay clients aren't choosing you because you're cheap. They're choosing you because you're the right fit. Racing to the bottom helps no one.
Generic content. "5 tips for managing stress" is forgettable. Specific, opinionated, personality-driven content stands out.
Waiting until you feel ready. You'll never feel ready. Start marketing before you're full, not after you're desperate.
The Bottom Line
Marketing a private pay practice isn't about becoming a social media influencer or mastering sales psychology. It's about making it easy for the right people to find you and understand why you're the therapist for them.
Nail your online presence. Build referral relationships. Pick one content platform and show up consistently. Do good work. Give it time.
Private pay is absolutely sustainable. It just requires treating your practice like a business—which, whether we like it or not, it is.
Want more strategies for building a sustainable private pay practice? The Private Pay Practitioners Playbook is a comprehensive guide covering pricing, marketing, boundaries, and business foundations for therapists transitioning away from insurance.
How to Calculate Your Private Pay Rate (And Actually Charge It)
“What should I charge?” is the wrong question.
The right question is: “What do I need to charge to sustain my life and my practice?”
Most therapists pick a rate by looking around at what other therapists charge, picking something in the middle, and hoping it’s enough. That’s not a strategy. That’s a guess.
Your rate isn’t about your worth.
Let’s get this out of the way: I don’t believe in “charge what you’re worth.” You’re a human being - your worth isn’t quantifiable. And frankly, that framing keeps therapists stuck, because they tie their self-esteem to a dollar amount.
Your rate is about math. What does it cost to run your life and your business? That’s your starting point.
The actual calculation.
Here’s the simplified version:
Add up your monthly personal expenses (rent/mortgage, food, utilities, insurance, debt payments, everything)
Add up your monthly business expenses (EHR, liability insurance, subscriptions, continuing education, etc.)
Add those together
Multiply by 1.3 to account for taxes and self-employment costs
Divide by the number of sessions you want to see per month
That’s your minimum sustainable rate.
Notice I said “sessions you want to see” - not “sessions you could theoretically cram into your schedule.” If you want to see 20 clients a week and take actual vacations, calculate based on that.
Why therapists resist this.
When I walk therapists through this calculation, they often land on a number higher than what they’re currently charging. And then the panic sets in.
“No one will pay that.” “I’ll lose all my clients.” “That’s more than other therapists in my area charge.”
Here’s what I know: there are therapists in your area charging more than you, seeing full caseloads. The difference isn’t their credentials or their experience. It’s their confidence and their clarity.
The real barrier is internal.
Most pricing problems aren’t business problems - they’re money story problems. The messages you absorbed growing up about money, worth, and who gets to have nice things. The implicit lessons from grad school that therapists should sacrifice. The guilt about charging for help.
This is why I spend the first two weeks of my intensive coaching program on money mindset before we ever touch strategy. You can know what to charge and still not be able to do it if your internal wiring is fighting you.
What to do with your number.
Once you’ve calculated your sustainable rate:
Say it out loud. Ten times. Notice what comes up.
Practice stating it without apologizing, explaining, or immediately offering a discount.
If there’s a gap between your current rate and your sustainable rate, make a plan to close it.
Maybe that means raising your rate for new clients immediately. Maybe it means a gradual increase for existing clients. Maybe it means having some hard conversations. But you can’t build a sustainable practice on an unsustainable rate.
Ready to run your numbers? Use the Private Pay Rate Calculator - it factors in taxes, time off, and the expenses most therapists forget.