Will Insurance Cover Music Therapy?

Will insurance cover music therapy? It can, depending on your policy, but whether it will be cost effective is another story.

Music therapy is relatively unknown in the insurance world and as a result it is almost always considered an out of network service. There are a few isolated instances with insurance companies where music therapy has been reimbursed as an in network service, however in the vast majority of cases, it is considered out of network.

So if you want to utilize insurance for music therapy services, you will need to consider the following:

Your out of network deductible
Your insurance policy coverage after reaching your out of network deductible
Your max out of pocket cost

1. Reaching Your Out of Network Deductible

Clients utilizing insurance are required to pay the “full rate” up until they reach their out of network deductible. In many cases, an out of network deductible may be anywhere from $5,000-$10,000 per year. In contrast, private clients pay with a “prompt pay discount” which may cost less than a high deductible (see chart below).

To put that into perspective, the cost for one year of private individual music therapy is $5,000 (50×60 min sessions at the prompt pay discount).

With insurance, the same number of sessions would cost $8,750 (50x60min sessions at the full rate).

So if your out of network deductible is $10,000 it will not save you any money to utilize insurance. In fact, it will cost you $3,750 more because you must pay the full rate before reaching your deductible.

In the chart below you can see an example of what the costs might look like for therapy over a full year of services (50 sessions). Private pay clients pay the prompt pay discount, while those utilizing insurance must pay the full rate until they reach their deductible.

Individual Therapy	Prompt Pay Discount Per Session	50 sessions	Full Rate	50 sessions
30min	$65	$3,250	$100	$5,000
45 min	$85	$4,250	$150	$7,500
60 min	$100	$5,000	$175	$8,750

Generally speaking, we have found that if your out of network deductible is over $3,000-$5,000, it will likely not save you money in the long run to utilize insurance for music therapy. The exception to this is if you have other out of network costs that will cause you to reach your deductible without music therapy. In those cases, it may be worth pursuing reimbursement.

Here is an example of what we may communicate to a parent regarding their policy and coverage:

Dear ______,

Your out of network deductible is $5,000 for each individual and $10,000 for the family. If you were to do weekly 30 minute music therapy sessions every month at our current rate of $65/session you would reach $3,250 as a maximum cost of therapy. This is just over half of your out of network deductible, but if you anticipate other out of network costs this year to make up the difference then it would be worth pursuing.

I am happy to continue moving forward to obtain coverage, but I wanted to make sure you were aware of this deductible as you would be paying at least $5,000 out of pocket before insurance starts to cover 50%.

2. Policy Coverage After Reaching Deductible

Once you’ve reached your deductible, the amount your policy covers will influence whether it is worth pursuing reimbursement.

For example, here is what one of our clients faced with their policy:

Dear ______,

Your out of network deductible is $5,000 per individual (or $10,000 for family). You are responsible for the cost of services until that $5,000 deductible is met, after which time your insurance company will reimburse 50% of the cost of services.

In this case, the client would still need to pay $50 per 30 minute session (half of the full rate of $100) even after reaching their deductible because the insurance company only paid for 50% of out of network services. Compare this rate to the prompt pay discount of $65 per 30 minute session, and it makes much more sense to simply pay out of pocket, where the total cost per year would be $3,250 (see table above under prompt pay discount).

3. Reaching the Out of Pocket Max

If you reach your out of pocket max for the year (which in some cases is upwards of $10,000-$20,000) then the insurance company may reimburse 100% of the cost of music therapy.

If You Want to Pursue Reimbursement

With all of that said, if you have an excellent insurance plan with low out of network deductibles, we are happy to help you pursue reimbursement.

Here’s a bit about the process.

Find out your out of network coverage from your existing insurance policy, as well as the amount the insurance company will cover after the deductible is met. If reimbursement will save you money then we will proceed.
We will conduct a formal music therapy assessment and develop a treatment plan, write goals, and identify CPT codes for treatment.
Obtain a letter of medical necessity from your Primary Care Physician. We will help you with this.
Call the insurance company to check on benefits
Obtain prior approval for services if necessary (this can take some time)
If music therapy is approved for reimbursement we will begin services for the time period approved by your insurance company.

The more people who pursue music therapy reimbursement, the more likely it will be to include music therapy as an in network service over the coming years. So it is definitely worth pursuing if it will save you money!

If you have questions about your unique situation, please don’t hesitate to contact us.