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If I Don’t Take Insurance…Do I Still Need to Document Medical Necessity?

by Beth Rontal, LICSW 7.14.16

This is such a hot topic that a documentation question comes across my in-box almost weekly. The answer is yes! Documentation is a standard in our profession and there are some good reasons why.

The Lowdown 

1. Even if you are not on insurance panels, if you see a client who has out-of-network benefits and uses a PPO, you can still be audited. This means you still have to justify medical necessity or risk claw backs. This doesn’t happen often, but it has been happening more in recent years.

2. Your records could be subpoenaed, so you want to make sure they are HIPAA-compliant to protect you and your client.

3. You may have a client who goes out on Workman’s Comp or requests Disability. These entities can request your records. It’s much better to have already written your notes when they are fresh than to have to write them when they are stale.

4. If the client is ever a danger to him/herself or others, you need to document your assessments and what you did in response.

5. If a client sues, you need to have records to protect yourself. These records include all kinds of information, including the actual start and stop time of the session; the date of the next session; and a mental status exam.

6. Case and Collateral Contact Notes prove that you’ve communicated with other providers and gotten consultation on challenging cases. This could be important if you are ever sued by a disgruntled client or family member.

Case Consult notes can also help justify medical necessity. One clinician, who consulted with me, reported that when the insurance company wanted her to reduce treatment to biweekly appointments, having well documented Case Consult notes helped justify weekly sessions for a long term and complicated client.

7. If you do not formally discharge a client and something happens to them, their family can accuse you of negligence. 

On the Positive Side 

The above are the “negative” or the cover-your-butt reasons to do good documentation. On the positive side, writing weekly notes can help you stay focused on treatment goals, reflect on the session, and discover something important for the next session.

On a personal note, half my practice is private pay, and I write session notes for them as well as those using insurance. That’s how if often works for me and for those who take my course.

Take Away 

Information for the Diagnostic Summary is gathered in the first couple of sessions with the client, so, if you use an EHR, an on-line program or Word Documents (like the ones I use), the only unpaid time you spend documenting your work is transferring the information into your official medical record.

If you use a template to guide your initial interviews, the amount of time spent writing up the report into something readable is limited. Documenting your work does take time and after a long day, it’s not a welcome task – but it could save you a lot of heartache – and contribute to your clinical work. 

Ask the Expert

We’re giving you an exclusive opportunity to ask Beth your documenting questions. Email your inquiry to – and we might feature the answer in an upcoming blog post!

click here for pdf 

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Beth Rontal, MSW, LICSW, has spent thousands of hours teaching psychotherapists how to document medical necessity, get authorizations and pass audits by linking effective documentation with good clinical practice.  

An engaging speaker, Beth has presented Misery or Mastery; Documenting Medical Necessity to individuals, groups and clinics and at national conferences. She also serves on the Advisory Board of PIMSY Mental Health EHR. For more information, see Documentation Wizard


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