Most clients expect to be reimbursed for 70% of what they paid their therapist. The reality is more complicated — and often less generous. Understanding how insurers calculate the allowed amount is the key to realistic reimbursement expectations.
The Allowed Amount: The Number That Matters
Insurance does not reimburse based on what your therapist charges. It reimburses based on the allowed amount — the insurer's internal maximum for a given service in your geographic area. If your therapist charges $200 for CPT 90837, but the insurer's allowed amount is $140, the math is based on $140.
Your OON benefit of 70% means: 70% of the allowed amount, after your deductible. So: 70% × $140 = $98 — not $140 (70% of $200).
What Is UCR (Usual, Customary, and Reasonable)?
The allowed amount is based on UCR rates — a statistical calculation of what providers in a given specialty and geographic area typically charge for a service. Different insurers calculate UCR differently:
- Some use the 50th percentile of charges in the area
- Some use the 70th or 80th percentile
- Some use Medicare rates as a multiplier (e.g., 120% of Medicare)
- Some use proprietary databases like FAIR Health or Optum
The result: two clients with "70% OON coinsurance" plans from different insurers can receive very different reimbursement for the same session with the same therapist.
How to Look Up UCR Rates
The best free consumer tool for estimating allowed amounts is the FAIR Health Consumer tool at fairhealthconsumer.org. Enter a CPT code (e.g., 90837), your zip code, and whether you want OON or in-network rates. The tool returns the typical range of UCR rates for that service in your area. This is the most reliable proxy for what your insurer considers "customary."
Why Your Reimbursement Is Less Than You Expected
Common reasons OON reimbursement comes in below expectations:
- OON deductible not met — The plan pays $0 until you satisfy the OON deductible (often $2,000–$5,000)
- Low UCR rate — The insurer's allowed amount is below your therapist's fee, reducing the base for your percentage reimbursement
- Coinsurance applies to allowed amount, not total charged — As shown above, 70% of $140 is very different from 70% of $200
- Plan uses Medicare + % rather than market UCR — Some plans peg OON rates to Medicare multiples, which can be significantly lower than market rates in high-cost cities
Challenging a Low UCR Determination
If you believe the insurer's allowed amount is artificially low, you can dispute it:
- Pull the FAIR Health data for your CPT code and zip code
- Research what other licensed therapists with your specialty charge in your city (Psychology Today directory, Zencare)
- Submit a written appeal to the insurer citing specific fee comparisons
- Include any professional organization fee surveys (e.g., NASW private practice survey for LCSWs)
- If denied, escalate to your state's insurance commissioner
Mental Health Parity and Allowed Amounts
Federal MHPAEA and many state parity laws require that the methodology used to set mental health OON rates must be no more restrictive than the methodology used for comparable medical/surgical OON rates. If your insurer reimburses a primary care OON visit at a higher UCR percentile than a therapy OON visit, that may be a parity violation worth challenging with your state insurance commissioner.