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Why Therapists Are Leaving Insurance Networks in 2026

CoralEHR Team

Why Therapists Are Leaving Insurance Networks in 2026

Introduction: A Sea-Change in Mental Health Practice

The mental health landscape continues to transform in 2026, with therapists leaving insurance networks at an accelerating pace. What began as a trickle has become a flood—clinicians are increasingly fed up with an insurance model that doesn't serve them or their clients. Thrizer's 2025 Mental Health Insurance and Marketing Report surveyed hundreds of clinicians and found that 34% cited financial reasons, 26% pointed to administrative burdens, 20% wanted more clinical autonomy, and 13% identified burnout as their primary motivation for going out of network¹.

Only eight percent of clinicians in Thrizer's survey were fully insurance-based, while 32% were entirely private pay and 60% used a hybrid model². Data from the American Psychological Association (APA) tells a similar story: around one-third of psychologists were not accepting insurance in 2024, and 82% of those who dropped out cited insufficient reimbursements, while 62% pointed to administrative hurdles³. Such statistics highlight a major shift toward private-pay therapy and cash-based practice models.

This article explains why more behavioral health therapists—psychologists, counselors, and licensed clinical social workers—are going out of network. We examine the four main drivers of the exodus, explore the impact on practices and clients, discuss the rise of out-of-network therapists, highlight the role of technology, and provide actionable tips for private practice therapists contemplating the move.

The Data Behind Therapists Leaving Insurance Networks

The trend toward private-pay isn't anecdotal. Multiple surveys show that participation in insurance networks is declining while private-pay and hybrid models are rising.

Survey Statistics: Thrizer's 2025 report found that 34% of therapists cited financial motives, 26% pointed to administrative burdens, 20% wanted more clinical autonomy, and 13% were motivated by burnout¹. Roughly 8% of respondents were fully insurance-based, 32% were completely private pay, and 60% operated hybrid practices². Another insight from the survey: average in-network reimbursement was only $112 per session, whereas clinicians' ideal private-pay rate ranged from $180–$200².

National Professional Surveys: The APA's 2024 Practitioner Pulse Survey reported that around one-third (34%) of psychologists were not accepting any form of health insurance³. For those leaving or avoiding insurance, 82% cited insufficient reimbursement, 62% cited administrative challenges such as pre-authorization and audits, and 52% cited payment delays and clawbacks³.

Regional Data: A New Hampshire survey showed that 27% of providers had left an insurance panel in the past five years, 26% planned to leave one or more panels soon, and 50% of marriage and family therapists planned to leave a network within the next one to two years⁴. Nearly 79% of therapists reported difficulty finding another provider to refer patients to⁴. This state-level data illustrates how the insurance exodus is affecting access to care.

These statistics make clear that the migration away from insurance is not a fringe movement but a systemic shift. In the sections that follow, we unpack the reasons behind this shift and its implications.

What's Changed: 2025 to 2026

Several significant developments in late 2025 and early 2026 have intensified the trend toward private-pay practice.

Mental Health Parity Enforcement Rollback

In May 2025, the Trump administration announced it would not enforce the Biden-era mental health parity regulations designed to make insurers cover mental health care on par with physical health services⁸. The 2024 rule had required private health plans to evaluate their provider networks, out-of-network payment rates, and utilization management processes to ensure parity between mental and physical healthcare. With enforcement now paused, advocates warn that insurance plans may return to imposing more utilization controls and restrictive networks⁸.

This regulatory uncertainty has pushed even more therapists toward private pay, where they don't have to worry about changing insurance requirements or parity enforcement gaps.

Updated Reimbursement Data

Heard's 2025 Financial State of Private Practice Report confirms the financial gap continues to widen: the average private-pay rate for individual therapy is now $159 per session, while the average insurance reimbursement sits at $111—a difference of 36%⁹. For PhD-level psychologists, the gap is even larger: those accepting insurance average $167.69 per session compared to $195.91 for those who don't⁹.

Meanwhile, Medicare reimbursement rates for mental health services decreased by approximately 14% in 2025, with time-based psychotherapy codes cut by about 3.4%⁹. While 2026 brings modest increases (the conversion factor rises to $33.59), rates still haven't recovered to pre-2025 levels.

Expanded Provider Options

One positive development: Licensed Marriage and Family Therapists (LMFTs) and Licensed Mental Health Counselors (LMHCs) can now bill Medicare independently at 75% of psychologist rates—a major workforce expansion that took effect in 2024 and continues through 2026⁹. This gives more clinicians a path to sustainable practice, though many still find the rates insufficient.

Insurance Acceptance Varies Dramatically by State

New research shows insurance acceptance varies substantially by location: North Dakota (90.5%), Nebraska (87.1%), and Illinois (86.3%) have the highest rates of therapists accepting insurance, while Washington D.C. (41.0%), Tennessee (51.5%), and California (55.4%) have the lowest⁹. These disparities reflect regional differences in reimbursement rates, cost of living, and market dynamics.

The Four Main Reasons Therapists Leave Insurance

1. Financial Stability: Low Reimbursements and Hidden Costs

Insurance participation often undermines financial stability. Thrizer's survey found that low reimbursement rates and the potential to earn more independently were the top reasons clinicians opted out¹. APA's data reinforces this point—82% of psychologists who left insurance said that inadequate reimbursement was the primary obstacle³. Many therapists spend hours completing claims, only to receive payments months later or face clawbacks.

In contrast, cash-based practice models often enjoy higher hourly earnings and more predictable cash flow. Heard's 2024 State of Private Practice Report found that 27% of therapists were cash-pay only, charging an average of $157 per session—significantly higher than the typical in-network reimbursement⁵. With private pay, there are no third-party billing fees or revenue lost to denied claims¹. That extra income can be reinvested in training, marketing, or a larger safety cushion.

2. Administrative Burden: Hours of Paperwork and Audits

Therapists spend staggering amounts of time on insurance paperwork. Thrizer's report noted that 26% of respondents left networks due to administrative burdens, including slow payments, complex billing, and the risk of clawbacks¹. The APA survey highlighted similar concerns: 62% of psychologists cited pre-authorization requirements and audits as major barriers³.

The New Hampshire bulletin paints an even bleaker picture. Clinicians report growing hours of unpaid administrative time to fix inaccurate benefit quotes, appeal claim denials, and navigate long reimbursement delays⁴. Insurance company provider service departments are understaffed and undertrained, leading to countless phone calls and resubmissions⁴. This administrative treadmill reduces time with clients and contributes to burnout. Therapists going out of network free themselves from these bureaucratic headaches, allowing them to focus on care.

3. Clinical Autonomy: Freedom to Practice According to Client Needs

Insurance contracts often dictate the length and frequency of sessions, restrict covered treatments, and require certain diagnoses to justify coverage. Thrizer's survey found that 20% of therapists left networks to prioritize clinical autonomy¹. Clinicians want to tailor treatment plans without worrying about session limits or required codes.

Private-pay therapy removes insurers from the therapeutic relationship. The Counseling Affect notes that private pay gives clients greater privacy and confidentiality, eliminating the need to share session notes with insurers⁶. Clients also gain freedom to choose their therapist and flexibility in treatment, since there are no externally imposed limits on the type or duration of therapy⁶. For clinicians, this means they can employ innovative modalities and spend extra time when clinically necessary without fear of reimbursement denial⁶. The result is higher-quality, individualized care.

4. Burnout Prevention: Sustainable Workloads

Long hours, high caseloads, and constant administrative pressure contribute to therapist burnout. Thrizer's survey found that 13% of therapists leaving insurance primarily due to burnout¹. The APA press release quotes psychologists who spend countless hours tracking down missed payments and lose thousands of dollars in audits that occur months or years after services are provided³. Such experiences erode morale and lead clinicians to question their career sustainability.

Private-pay models allow therapists to set caseload limits, schedule longer breaks, and prioritize self-care. Earning more per session means clinicians can maintain a reasonable workload while still covering expenses. Reduced paperwork and fewer audits free up time for rest and professional development. Ultimately, leaving insurance can be an act of self-preservation.

Impact on Therapy Practices

Client Accessibility and Affordability

One concern about out-of-network therapists is that services may become less accessible for clients. In New Hampshire, families are already stretching their budgets or foregoing treatment because of rising costs⁴. Surveys by state psychological associations found that 50% of marriage and family therapists planned to leave insurance panels, suggesting that network shortages will worsen⁴. Many clients struggle to find in-network providers with open slots, and the cost of paying out of pocket can be prohibitive.

Still, private-pay does not have to mean inaccessible. According to Heard's report, the average cash-pay session cost is $157⁵. Therapists can adopt sliding scales, shorter session formats, group therapy, or payment plans to make services more affordable⁵. Educating clients about out-of-network reimbursement is another way to help them recoup part of the fee⁵. With transparent communication and creative fee structures, private practice therapists can maintain a private-pay practice while still serving cost-conscious clients.

Benefits for Clinicians: Time and Flexibility

Going out of network offers tangible benefits for clinicians. Private-pay therapists spend less time on paperwork—no claims to file and no pre-authorization to chase⁵. They enjoy higher hourly earnings and greater control over their schedules, which allows them to set aside time for family, research, or professional growth. The Counseling Affect notes that private-pay therapy enables flexibility in treatment plans, including extended or more frequent sessions⁶. Clinicians can focus on quality rather than volume, fostering deeper therapeutic relationships.

Challenges: Marketing and Communicating Benefits

Leaving insurance also introduces challenges. Private-pay therapists must attract clients without the built-in referrals that insurance panels provide⁵. Building a steady caseload requires marketing, networking, and a strong online presence. Therapists also need to educate clients about out-of-network benefits and payment options. Many clients assume that private pay is unaffordable, but sliding scales, group therapy, and shorter sessions can make care accessible⁵. Transparent communication about costs and reimbursement helps build trust and reduces sticker shock.

The Rise of Private-Pay and Cash-Based Practice

Understanding Private-Pay in Behavioral Health

A private-pay therapy or cash-based practice is one where clients pay clinicians directly for services rather than having the therapist bill insurance on their behalf. Some private-pay practices provide superbills so clients can seek reimbursement from their insurers, while others work entirely outside the insurance system. Heard's survey data show that 27% of therapists were cash-pay only⁵ and 32% of clinicians in Thrizer's study were entirely private-pay². Another 60% maintained hybrid practices, combining private pay with select insurance contracts².

Case studies of cash-based practices reveal the appeal. Therapists who adopt private pay often report greater financial stability, more meaningful client work, and lower stress. Heard's report notes that cash-pay therapists typically charge $157 per session⁵—higher than many in-network rates. The same report highlights that 47% of clinicians believe insurance is not worth the effort².

Pros and Cons: Insurance vs Private-Pay

Aspect Insurance-Based Practice Private-Pay / Cash-Based Practice
Income Predictability Lower reimbursements; payments often delayed or clawed back³ Higher per-session rates; clients pay at time of service⁵
Administrative Workload Significant paperwork, pre-authorizations, audits¹,³ Minimal billing paperwork; no paneling; simpler finances⁵
Clinical Autonomy Session lengths and treatment modalities dictated by insurer¹ Full control over treatment plans and session structure⁶
Client Access Lower out-of-pocket costs for clients, but limited therapist availability⁴ Higher costs; therapists must offer sliding scales or OON reimbursement to improve accessibility⁵
Referral Flow Steady in-network referrals; less marketing needed Must build own referral network and market services⁵
Privacy & Confidentiality Insurance requires session documentation be shared with payers Records stay between therapist and client, enhancing privacy⁶
Burnout Risk High caseloads needed to offset low reimbursements; administrative stress¹ Lower caseloads possible; more autonomy and control over schedule

How Technology Supports the Transition to Private-Pay

Technology is an essential ally for therapists going out of network. Modern electronic health record (EHR) tools, AI-powered note-taking, and automation streamline workflows, making it easier to run a practice independently.

EHRs and AI Note-Taking Lighten Administrative Loads

A 2024 survey by SimplePractice found that 50% of clinicians already use artificial intelligence for daily tasks like idea generation and scheduling, yet only 13% use AI for client documentation⁷. This gap highlights a major opportunity: AI-powered note-taking can slash administrative time while ensuring HIPAA compliance⁷. SimplePractice's own AI Note Taker builds compliance directly into the EHR platform, integrating access controls, audit logs, and encryption to protect patient data⁷. The article emphasizes that therapists who embrace AI can save hours each week and reduce burnout⁷.

For out-of-network therapists, adopting a lightweight EHR with AI note-taking is crucial. Tools like CoralEHR (our health software platform—not insurance software) offer AI-assisted progress notes, intuitive scheduling, and secure documentation without the complexity of enterprise-grade EHRs. Such platforms help clinicians stay organized, manage superbills, and maintain a HIPAA-compliant practice. CoralEHR's AI notes integrate natural-language processing to generate clinical notes from session highlights, while the security page outlines data encryption and BAA support for HIPAA compliance. Using these tools reduces the workload that drives many therapists out of insurance networks in the first place.

Online Scheduling and Virtual Assistants

Beyond note-taking, therapists can utilize online scheduling platforms and virtual assistants to automate appointment reminders, intake forms, and payment collection. Many EHRs include secure client portals where clients can book sessions and pay invoices using credit cards or HSA/FSA funds. The more streamlined the administrative process, the more time therapists can dedicate to clinical work.

Marketing Automation and Website Optimization

Private practice therapists must market themselves effectively. Leveraging website builders with built-in SEO tools helps prospective clients find you. Some EHRs integrate with email marketing platforms, allowing therapists to send newsletters and share blog posts on topics such as out-of-network reimbursement or sliding-scale policies. Automating these tasks ensures consistent communication without consuming your time.

Tips for Therapists Considering Leaving Insurance in 2026

Thinking about transitioning to private pay or a hybrid model? Here are evidence-backed steps to make the switch sustainable:

  1. Assess your finances and client base. Review your current reimbursement rates and overhead costs. If insurance payments are low and you have a waitlist, shifting part of your caseload to private pay may improve your bottom line. Tools like Heard's fee-setting calculator can help determine appropriate rates⁵.

  2. Design flexible fee structures. Offer sliding scales, shorter sessions, or group therapy to make private pay affordable⁵. Payment plans can break down costs into manageable installments⁵. These options demonstrate a commitment to access while maintaining your practice's sustainability.

  3. Educate clients about out-of-network benefits. Many clients are unaware that their insurance may reimburse part of your fee. Provide simple explanations during consultations and offer superbills or partner with platforms like Thrizer to submit claims on clients' behalf⁵. Transparent communication alleviates worries about cost.

  4. Leverage lightweight EHR and AI tools. Reduce administrative burden by adopting an EHR with AI-assisted documentation and scheduling. Tools such as CoralEHR and other HIPAA-compliant AI note platforms support efficient workflows. According to SimplePractice, AI documentation has the potential to save therapists hours each week⁷.

  5. Build referral networks and optimize your online presence. Network with colleagues, physicians, and community organizations to generate word-of-mouth referrals. Optimize your website with clear descriptions of services, fee policies, and appointment booking. Blogging on topics relevant to your audience—like out-of-network reimbursement or mental health tips—can improve search rankings and attract motivated clients.

  6. Prepare for a gradual transition. Consider a hybrid model initially: remain on certain panels while onboarding private-pay clients. Thrizer's data shows that 60% of clinicians operate hybrid practices², allowing them to maintain accessibility while increasing autonomy. This approach provides a financial cushion as you refine your processes and marketing.

Conclusion: Private-Pay as a Sustainable Path

The data confirm that therapists leaving insurance is not a passing fad but a structural shift in mental health care. Surveys show that financial strain, administrative burden, lack of clinical autonomy, and burnout are driving thousands of clinicians out of insurance networks¹. Psychologists report inadequate reimbursement and time-consuming administrative hurdles³, while regional studies reveal alarming rates of providers planning to leave panels⁴.

Yet this movement is creating room for innovation. Private-pay therapy and hybrid models offer therapists higher earnings, freedom to tailor treatment, and reduced paperwork, enabling more sustainable workloads⁵. Clients can still access care through sliding scales, group sessions, payment plans, and out-of-network benefits⁵. Technology—especially AI-assisted note-taking and lightweight EHRs—reduces administrative burdens and helps therapists manage their practices efficiently⁷.

As you contemplate your own journey in 2026, remember that leaving insurance doesn't have to be an all-or-nothing decision. Evaluate your finances, adopt modern tools, and communicate openly with clients. By doing so, you can build a practice that honors your clinical values, respects your time, and provides high-quality care.

Explore how CoralEHR supports therapists moving into private-pay practice with AI-assisted workflows and HIPAA-compliant simplicity, and take the next step toward a more sustainable and fulfilling career.

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References

  1. Thrizer. (2025). 2025 Mental Health Insurance and Marketing Report. thrizer.com
  2. Therapy Reimagined. (2025). Insurance vs Private Pay Survey Results. therapyreimagined.com
  3. American Psychological Association. (2024). Practitioner Pulse Survey on Insurance Participation. apa.org
  4. New Hampshire Bulletin. (2025). Mental Health Provider Insurance Panel Exodus Survey. newhampshirebulletin.com
  5. Heard. (2024). State of Private Practice Report. joinheard.com
  6. The Counseling Affect. (2025). Private Pay Therapy Benefits and Considerations. counselingaffect.com
  7. SimplePractice. (2024). AI in Mental Health Practice Survey. simplepractice.com
  8. KFF Health News. (2025). Trump Team Faces Key Legal Decision That Could Put Mental Health Parity in Peril. kffhealthnews.org
  9. Heard. (2025). 2025 Financial State of Private Practice Report. joinheard.com; Health Affairs Scholar. (2024). Insurance acceptance and cash pay rates for psychotherapy in the US. academic.oup.com