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Credentialed or Noncredentialed with Insurance: What Practices Need to Know

In-network vs out-of-network status decides what your practice is paid, what you can bill the client, and how much paperwork you carry. Every insurance plan treats a clinician as either in its network or outside it. This page explains both sides for psychotherapists and psychiatrists, solo and group.

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In-network vs out-of-network: quick definitions

Credentialed = in-network: the plan verified your license, training and history, and you have a contract and an effective date with that plan.
Noncredentialed = out-of-network: you have no contract with that plan.

In-network vs out-of-network billing: calculator, insurance card and laptop on a desk

What does it mean to be In-Network or Participating?

An in-network, or participating, provider has a signed contract with a health plan to treat its members at the plan's agreed rate. HealthCare.gov describes a preferred provider as "a provider who has a contract with your health insurer or plan to provide services to you at a discount."

What you agree to

Accept the plan's allowed amount as payment in full for covered services. The client still owes their copay, coinsurance or deductible. HealthCare.gov defines the allowed amount as "the maximum amount a plan will pay for a covered health care service."
Do not bill the client the difference between your fee and the allowed amount. That practice is called balance billing, and HealthCare.gov notes preferred providers are prohibited from doing it for covered services.
Follow the contract's rules for authorizations, filing deadlines, documentation, appeals and recredentialing. The participation agreement sets these, so it is the first place to check when a claim is denied.

Bill rate vs. allowed rate

Your bill rate (your billed charge, or usual fee) is the price your practice lists for a service. The allowed rate is the plan's allowed amount, the most it recognizes for that service. In-network, the allowed rate is your contract rate. The gap between your bill rate and the allowed rate is a contractual write-off, not a balance for the client.

Patient out-of-pocket responsibility

This is what the client owes after the plan processes the claim, shown on the explanation of benefits. It is built from four pieces:

Copay (also called copayment): a fixed dollar amount a member pays for a covered service, often collected at the time of visit.
Deductible: "the amount you pay for covered health care services before your insurance plan starts to pay."
Coinsurance: "the percentage of costs of a covered health care service you pay (20%, for example) after you've paid your deductible."
Out-of-pocket maximum: "the most you have to pay for covered services in a plan year." After the client reaches it with in-network deductibles, copays and coinsurance, the plan pays 100% of covered benefits. Plans differ on what counts toward it, so check each one.

Verification of patient benefits comes first

Before the first visit, confirm the client's active coverage, your network status for their specific plan, their copay or coinsurance, how much of the deductible is left, their out-of-pocket maximum, and any authorization requirement. Doing this up front prevents surprise balances and denials. MCM South's insurance verification and eligibility service covers this step.

Credentialed with insurance means in-network

In everyday billing, being credentialed with an insurance plan means you are in-network with it. The plan first verifies your license, education, training, work history and standing. Plans commonly follow NCQA standards for this step. Then you sign the plan's participation agreement and get an effective date. From that date you bill as an in-network provider. Claims for dates of service before the effective date are often denied or paid at out-of-network rates. Turnaround times vary by payer, so do not plan around a number of days. Ask each payer. That is the in-network side of the in-network vs out-of-network decision.

Check which insurance plans you are credentialed with, not just the payer name

Credentialing is granted plan by plan, not company by company. Being credentialed with a payer's PPO does not mean you are credentialed with its HMO, its Medicaid plan or a separate behavioral health carve-out. Blue Cross Blue Shield is a federation of independent plans, so each one credentials you on its own. Before the first visit, confirm that you are credentialed with the client's specific plan, and ask for the effective date.

Three rule sets, kept separate

Private payersMedicare & MedicaidState law

Private payers: each plan sets its own contract, rates and panel status. A "closed panel" means the plan is not accepting new clinicians in that area, which is a common reason new therapists cannot join.
Medicare and Medicaid: "participating" has a program-specific meaning in Medicare, tied to accepting assignment. Medicaid requires enrollment with the state program, and managed care plans may credential separately. Verify current rules with CMS.gov and your state Medicaid agency.
State law: network and credentialing rules vary by state. Never assume one state's rules apply in another.

Psychotherapists and psychiatrists. The network rules are the same. The difference is in the contract: psychiatrists are paid on their evaluation and management (E/M) codes plus add-on codes, so check the rate for each code you bill, not just one session rate.

What does it mean to be Out-of-Network or Non-Participating?

An out-of-network, or non-participating, provider has no contract with the client's plan. HealthCare.gov defines a non-preferred provider as "a provider who doesn't have a contract with your health insurer or plan to provide services to you." Whether the plan pays anything depends on whether the client's plan includes out-of-network benefits. This is the out-of-network side of the in-network vs out-of-network choice.

How it works in practice

The plan decides if it pays. Some plans, such as many PPOs, reimburse a percentage of the allowed amount after a separate out-of-network deductible. Some plans, such as many HMOs, may not pay at all. HealthCare.gov defines out-of-network coinsurance as the percentage the client pays of the allowed amount to providers who do not contract with the plan. Coverage is plan-specific, so verify each client.
You set your own fee. With no contract, the allowed amount does not cap your fee, and the client may owe the difference between your charge and what the plan allows. Rules differ by plan type, state and program, so confirm before you bill.
Two common claim paths. Some practices bill the plan as out-of-network. Others give the client an itemized receipt called a superbill to send to the plan. Choose one policy and apply it to every client.
Why practices are out-of-network. Some choose it. Others are out because a payer's panel is closed to new clinicians. If a client has no in-network option nearby, ask the plan about a gap exception or a single case agreement. Rules vary by plan and state.

What the client owes and what you collect

Out-of-network, the client's responsibility is built from the out-of-network deductible, out-of-network coinsurance and, where allowed, the gap between your bill rate and the plan's allowed rate. HealthCare.gov's out-of-pocket maximum definition says out-of-network care and costs above the allowed amount do not count toward the maximum on Marketplace plans. Confirm how each plan treats them. See the CPT 90834 Massachusetts example in the third dropdown for the dollar difference.

Verification of patient benefits matters more for out-of-network

Ask the plan whether the client has out-of-network benefits, the out-of-network deductible and coinsurance, whether the out-of-pocket maximum is separate, and how the plan wants claims submitted. MCM South bills out-of-network claims for clients, and our verification step documents these answers before the first visit.

Self-pay clients and the No Surprises Act

For clients who do not use insurance, CMS says providers must give a good faith estimate of costs when care is scheduled at least 3 business days ahead or when the client asks. Clients can dispute a bill that exceeds the estimate by $400 or more. CMS's consumer summary of the surprise-billing protections lists emergency care, certain non-emergency care at in-network facilities, and air ambulance. It does not list routine office-based therapy. Confirm how the law applies to your practice with counsel or a compliance officer.

Last checked 10/1/26 on CMS.gov.

Psychotherapists and psychiatrists. The same rules apply. A psychiatrist who bills E/M plus add-on codes out-of-network should list each code on the superbill or claim.

In-Network vs. Out-of-Network

In-network vs out-of-network comes down to who sets your rate. In-network means a contract sets your rate and the plan pays you directly. Out-of-network means you set your fee and the client's plan pays based on their out-of-network benefits, if any. Neither is better for every practice. The right choice depends on each payer.

	In-Network (Participating)	Out-of-Network (Non-Participating)
Contract with the plan	Yes	No
Credentialing and effective date	Required first	Not required by the plan
Who sets the rate	The plan's contracted allowed rate	Your practice sets its bill rate
Bill rate vs. allowed rate	Gap is written off	Gap may fall to the client; rules vary
Out-of-pocket maximum	In-network costs count toward it	Out-of-network costs may not count; plan-specific
Billing the client the difference	Not allowed for covered services	Rules vary by plan, state and program
Client pays	Copay, coinsurance, deductible (in-network)	Fee set by you; plan reimburses per OON benefits, if any
How claims go	Billed to the plan under the contract	Billed as out-of-network, or client submits a superbill
Ongoing work	Recredentialing, contract compliance	Verify out-of-network benefits per client
Verification of patient benefits	Confirm network status, copay, deductible left	Confirm out-of-network benefits and claim method
Plan listing	Eligible for the plan's directory	Not listed as a network provider

In-network vs out-of-network revenue: CPT 90834 in Massachusetts

CPT 90834 is individual psychotherapy, typically 45 minutes. Your network status changes who pays, how much the client owes, and how much your practice collects as revenue. This example uses the MassHealth rate as the allowed rate.

Allowed rate (in-network): $95.46. This is MassHealth's rate for 90834 under 101 CMR 306.03 for community health center and mental health center settings, effective January 1, 2023. The rate is the same for psychiatrist, doctoral-level and master's-level clinicians. The intern rate is $57.28. MassHealth updates its rates, so confirm the current rate for your provider type before you use it.
Bill rate: $150. The Massachusetts Health Policy Commission (May 2026 report, page 38) cites a study that found the average Massachusetts cash-payment rate for a 45-minute visit was more than $150. We use $150 as an example bill rate. Your own fee may differ.
Plan benefits (assumed for the illustration): $30 copay in-network. Out-of-network, the deductible is met and out-of-network coinsurance is 20% of the allowed rate.

One 90834 session	Credentialed (in-network)	Noncredentialed (out-of-network)
Bill rate	$150.00	$150.00
Allowed rate	$95.46	$95.46
Plan pays	$65.46	$76.37
Client pays	$30.00 copay	$73.63 ($19.09 coinsurance + $54.54 balance)
Practice collects (revenue)	$95.46	$150.00
Written off	$54.54	$0
Client's extra cost	—	$43.63 more per session

Over 10 sessions of in-network vs out-of-network care: the client pays $300.00 with a credentialed provider and $736.30 with a noncredentialed provider, $436.30 more. The practice collects $954.60 in-network and $1,500.00 out-of-network, $545.40 more, but only if the client pays the full balance.

Why this is a financial decision for many clients. The same 45-minute session costs the client $30 with an in-network provider and $73.63 with an out-of-network provider, before any out-of-pocket maximum is considered. Over a course of weekly sessions, that gap adds up. Many clients choose an in-network provider for that reason, and some stop care when the cost is too high.

Being credentialed removes that barrier and puts your practice in front of more of a plan's members. A noncredentialed practice earns more per session only when the client can and does pay the balance. If the client pays only the coinsurance, the practice collects $95.46 and $54.54 goes unpaid. If the plan has no out-of-network benefits, the client pays the full $150.00.

MassHealth members are different. The table treats $95.46 as an allowed rate under a plan with the benefits assumed above. A MassHealth member's own cost sharing, and whether a provider who is not enrolled with MassHealth may bill that member, follow MassHealth rules, not the assumptions above. Check the MassHealth provider manual and confirm with counsel before you set a policy.

What the in-network vs out-of-network table does not show. In-network status can bring more clients from a plan's members. Out-of-network clients pay more out of pocket, which can affect who books and who stays. Collection time, unpaid balances and billing work also differ. Your real allowed rate comes from your contract. For comparison, the same Health Policy Commission report found the average commercial in-network rate for a 45-minute adult session was $97 in 2023, and commercial rates in Massachusetts vary by insurer.

Whether you may bill a client the balance depends on the plan type and state law. Confirm with counsel and the Massachusetts Division of Insurance before you adopt a policy. This is an operational example, not financial or legal advice. Ask your CPA about the tax side.

Figures last checked 10/1/26: MassHealth rate effective 1/1/2023; HPC report published May 2026.

In-network vs out-of-network: questions to answer, payer by payer

Is the panel open for your specialty and area?
What is the contracted rate for the codes you bill most? Compare it to your usual fee.
What share of your clients carry this plan?
Do clients on this plan have out-of-network benefits?
Can your office handle the contract's authorization, filing and recredentialing rules?

For tax or business-structure questions, ask your CPA or attorney. This page is operational guidance, not legal or financial advice.

Is it better for a therapist to be in-network or out-of-network? The in-network vs out-of-network choice is not the same for every practice. In-network gives access to a plan's members at a set rate and adds contract rules. Out-of-network gives control of your fee and leaves reimbursement to each client's benefits. Practices often mix both, payer by payer.

Next step. MCM South handles both sides: credentialing and billing for in-network and out-of-network practices, including verification of patient benefits before the first visit. See also our denied claims follow-up and appeals service, or Get a Free Quote.

If not credentialed with insurance, what does the patient pay?

The in-network vs out-of-network gap shows up first in what the patient pays. If your practice is not credentialed with the patient's insurance plan, the patient pays the complete bill rate. In the 90834 example, that is $150.00. With a credentialed (in-network) provider, the patient is held to the allowed rate of $95.46. Depending on the plan, the patient pays a $30.00 copay and insurance pays the remaining $65.46, or the patient pays the $95.46 toward a deductible.

One 90834 session	Insurance pays	Patient pays
Noncredentialed (out-of-network): bill rate	—	$150.00 (the complete bill rate)
Credentialed (in-network): plan with a copay	$65.46	$30.00 copay
Credentialed (in-network): plan with a deductible not yet met	$0	$95.46 (the allowed rate)

The in-network patient pays no more than the $95.46 allowed rate, so the same visit costs $120.00 less with a copay plan and $54.54 less while a deductible is being met. At an out-of-network visit, the patient pays the complete bill rate at the time of service. Any reimbursement from the plan's out-of-network benefits comes later and depends on the plan, as shown in the out-of-network dropdown above.

Paying with an HSA or FSA

Patients may pay medical expenses with a Health Savings Account (HSA) or a Flexible Spending Account (FSA). Our glossary notes that patients may pay copays and balances with HSA cards, and that some patients pay copays with FSA cards and may need itemized receipts, such as a superbill. Ask the account administrator whether the expense qualifies. A verification of patient benefits before the first visit shows the copay, deductible and network status the patient should expect.

In-network vs out-of-network cost to the patient, illustrative figures only: $150.00 bill rate and $95.46 allowed rate (MassHealth's published rate, used as an example).

Built for both psychotherapists and psychiatrists

For psychotherapists

In-network vs out-of-network status, allowed rates and client responsibility for session-based codes, for solo and group practices.

For psychiatrists

The same in-network vs out-of-network rules, with rates checked per E/M code and psychotherapy add-on, so medication visits are paid as contracted.

In-network vs out-of-network: common questions

Is "credentialed with insurance" the same as "in-network"?

Yes, in everyday billing. Credentialing is the plan's verification of your license, education, training and history. After that you sign the contract and receive an effective date, and you bill as in-network from that date.

Am I credentialed with a payer if I am credentialed with one of its plans?

Not necessarily. Credentialing is granted plan by plan. Check each plan, such as a PPO, an HMO, a Medicaid plan or a behavioral health carve-out, and confirm the effective date.

What is verification of patient benefits?

It is a check of the client's coverage before the first visit: active status, your network status for their plan, copay or coinsurance, deductible remaining, out-of-pocket maximum, and any authorization rule. It prevents surprise balances and denials.

What happens if I see a plan's member before my effective date?

Claims for earlier dates of service are often denied or paid at out-of-network rates. Verify the plan's rule and the date in writing before you schedule.

How long does credentialing take?

It varies by payer, and no timeline is guaranteed. The steps are an application, primary source verification of your credentials, committee review, and an effective date. Ask each payer for its current process.

Where this comes from

Operational billing guidance only, not legal, tax or clinical advice. Rules change; confirm with each payer and your state Medicaid agency before you bill. Last checked 10/1/26.

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