Writing Therapy Notes for Insurance

Maybe you've looked through some of my resources and have wondered "but does this apply to insurance?" Well, this post is for you!

While notes don't generally need to be that different when taking an insurance company into consideration, there are certain things you want to make sure you have covered. And, if you contract with Medicare or Medicaid (Medi-Cal here in California), you need to follow these tips to the tee! Yup, those two are a little more on the stringent side when it comes to documentation.

Let's take a look at what an auditor is looking for when reading your notes! Oh, and did I mention I used to do that for a living? So yes, I know a thing or two about what insurance is looking for in therapy notes ;)

  1. Have you addressed each condition listed? This means if you identified more than one diagnosis or problem, you need to make sure you're addressing them both in some way. That could mean collaborating with another provider (especially with things like substance use) or simply having two different treatment goals to cover each area. The key with paperwork and insurance is always that you can't leave the reviewer with a cliff hanger. So, if you mentioned that your client has both anxiety and depression, outline how you're addressing both these issues. Don't leave them wondering or looking for more.
  2. Did you accurately separate out what may be different problems? There are many reasons for behavior and we all know that diagnoses can present very differently in different people... and many diagnoses have overlapping symptoms. Insurance companies expect you do a thorough enough assessment early on so you can differentiate among these things. For example, is your client having trouble sleeping, trouble concentrating and isolating from their spouse because they are depressed or because they have a substance use disorder? You need to be able to identify a clear why for what you're doing with this client, and that includes an understanding of what is leading to their reason for seeking treatment. 
  3. Did you justify your diagnosis? Every insurance plan requires a diagnosis for reimbursement. This is where many therapists end up causing harm for their clients... and getting themselves in some ethical (if not, legal) trouble. It is your job to provide an accurate diagnosis based on your clinical assessment. What does this mean? NO UNDER OR OVER DIAGNOSING! If your client truly has an Adjustment Disorder, go ahead and list that. But if they actually have more significant symptoms that meet criteria for a Major Depressive Episode, it is fraudulent to give them a "lesser" diagnosis. Likewise, if your client has some difficulty and comes to see you for self-improvement but doesn't actually meet the criteria for any diagnosis, you should not inflate their symptoms to meet the criteria just so they can be reimbursed by their insurance company. And let me tell you from experience, it is pretty easy to notice when a clinician is over or under diagnosing... so just keep things clean and diagnose based on what you see. 
  4. Do you have a plan for how to address this client's problem? It's not enough to identify a need and then start therapy. A reviewer wants to know that you have a plan for how to treat this specific problem. You don't need to write a huge treatment plan or outline every possible intervention you'll provide but you do need to outline how you see therapy progressing. If you can do that with an estimated timeline, even better! And if writing a treatment plan seems overwhelming to you, I offer a free treatment plan template in my Private Practice Paperwork Crash Course.
  5. Is your plan something the insurance company should pay for? Any time you have a third party paying for a service, they want to have a say (click here to learn more about what that means for you as a counselor contracting with insurance). And specifically, insurance is looking to make sure that you are providing a needed and professional service that is appropriate to this client. Let's break that down some more... 
    1. You're providing a therapeutic service that requires a Master's Degree or higher. I like to call this the "Grandma rule." Basically, no insurance company wants to pay you to do something someone's grandmother could do for them. Think things like "active listening," "building rapport," and "providing empathic support." These are all wonderful things and are fine to include in your notes. However, when they become the only thing in your notes, a reviewer starts to question your services, because these are things almost anyone without a Master's degree can do. My grandmother is wonderful and when I talk with her she actively listens, shows empathy, and holds space... and she's not providing me counseling. She's talking with me as a close relative. So, show the insurance company you can do all those things plus the awesome stuff you paid all that money to your grad school to learn.
    2. Even if you're doing a fabulous job outlining your clinical work, make sure not to overlook the fact that this service also needs to match your client's needs. If they have a substance use problem, are you trained to address that? Are you providing a reason for using EMDR? Unfortunately, there are therapists out there who will see any and every client who calls simply because they are desperate for money. Insurance companies know this and don't want you to waste the client's time treating them when you're not well-equipped. 
  6. Have you identified how the client is progressing or why they aren't progressing? Each week, you'll want to evaluate the progress your client is making in their treatment plan. This doesn't need to be time-consuming and doesn't even mean you need to look at the treatment plan each week. However, it does mean you can't abandon the treatment plan. I often see that therapists write wonderful weekly notes, none of which identify whether or not the client is actually making progress on the goal they identified and none of which make a lot of sense when put together week by week. Check in with your treatment periodically to make sure your notes flow with it. Mention progress in notes, even if it's a lack of progress... that still shows you're following the plan and adjusting as needed.
  7. Do you have a specific maintenance plan? For clients who are improving but still need some assistance, insurance wants to see that you have a clear plan for maintaining the progress made and weaning the client off treatment. I know, I know... this is what many therapists dislike about insurance, the fact that it dictates the end of therapy. However, if you can provide a reasonable expectation for the end of treatment and clearly outline why each step is needed, your client is more likely to be able to continue with you.
  8. Overall, are you following the insurance company's definition of medical necessity? In a nutshell, insurance wants to see that you have clearly shown the client meets medical necessity and are following their protocols related to that.

Sure, there's more to writing therapy notes for insurance companies but that definitely covers a lot of the big areas. If you want more help with writing notes or with documentation in general, check out my upcoming workshops and programs.

Let me know in the comments if you have any other tips or what was your biggest takeaway!