Medical Insurance When Your Child Needs Therapy

Posted by Allison Hall on

Unless a family is aware of potential complications of their baby's health while in utero, most families do not prepare for the emotional and financial circumstances that they will face when their child needs therapy.

Parents want to help their child in any way possible, but the cost of therapy can be more than they can afford.

Following, parents with children in therapy often have to ramp up on their understanding of medical insurance quickly.

I have written other blogs covering the definitions of common medical insurance-related terminology such as deductibles, PPO/HMO, co-pays, co-insurance and plan years.

Here I will relate this information to the specific situation of when a child needs therapy.


Does it matter if my plan is a PPO or HMO?

In short, yes. Here are some differences.


  • You typically have the freedom to choose a therapist without going through your primary physician as long as the therapist accepts your insurance plan.
  • New for 2019: While PPO plans did not typically need approval before seeing a specialist, some PPO plans are starting to require this. This is very important because if you go to a specialist WITHOUT the referral or pre-authorization, the insurance company may not pay for the services provided. 


  • There may be more restrictions on which healthcare providers are covered by your plan compared to a PPO plan.
  • You will also likely need to get a referral and/or pre-authorization of visits from your pediatrician in order to see a specialist (e.g. physical therapist, etc.). If you do not get the referral before the visit with the therapist, your insurance company will likely not pay for any therapeutic services provided prior to the approval date. 


What is the difference between a prescription, pre-authorization and a referral?


  • This is the doctor’s prescriptive orders for treatment.
  • In some states without direct access to therapy, a prescription is legally required before the the therapist can treat the child. Therefore, you might have to book a visit to the pediatrician in order to get the prescription (especially if you have an HMO plan). You can help change this by advocating for DIRECT ACCESS to therapy with your lawmakers. 


  • This is specific communication (usually by fax or online form) between the referring physician and the insurance company on behalf of the child who is to receive therapy.
  • The physician will receive an approval number with a specific number of visits for specific treatment codes during a specific time period (there will be a beginning and end date). This referral approval number will be shared with the therapist and used for billing therapy visits.
  • If the therapeutic intervention goes outside of these visit numbers, treatment codes OR time period, it is highly likely that the insurance company will not pay for the visits.
  • As your child approaches the limits and therapy is still needed, your therapist and pediatrician can submit for more visits if your plan maximum visits have not been met. (More on "hard maximum" below)


  • This is the doctor approving that the patient can be seen by a certain type of therapist (e.g. speech therapist, physical therapist).
  • The term "Referral" is often used in combination with "Pre-authorization" and the paperwork may likely be bundled together. As an example the fax might be titled "Referral" and include information related to the terms of the pre-authorization per above (ie. allowed number of visits, approved time period and treatment codes).


What is a “hard maximum number of visits”?

  • A “hard maximum” is the absolute total number of visits that insurance will pay for your child in one plan year.
  • Unfortunately, this hard maximum does not take into account your child’s diagnosis, delays or prognosis. If your child still needs therapy after the maximum number of visits have been met, you will need to switch to a private pay arrangement with your therapist.
  • I have seen many families meet their “hard maximum” before meeting their annual deductible. Therefore, if you are choosing an insurance plan and it is anticipated that your child will need ongoing therapeutic intervention, it would be helpful to know if there is a hard maximum number of therapeutic visits for the plan under consideration. You should also ask if visit therapy limits are separate or combined (e.g. physical and occupational therapy visits combined).
  • If a referral was required, PLEASE NOTE that the REFERRAL VISIT limit does not always match your MAXIMUM VISIT limit. This can be very confusing because the part of the insurance company that approves the referrals does not typically consider the terms of your plan (i.e. hard maximums) when creating the referral approval.
    • For example, the insurance company may only approve 10 visits in your child's referral even though your child has 20 maximum visits for the year according to the terms of your plan. In this situation, your doctor and therapist can work together to seek more visits after the 10 visits have been used if further therapy is warranted. This may require submission of therapy reports and notes.
    • Or, the referral may approve 30 visits, but your plan has a hard maximum of 20 visits. In this situation the last 10 visits that were approved in the referral will not be covered by insurance.
    • The take home message is that if your child needs a referral to see a therapist, make sure to keep track of the number of approved visits from the referral AND the annual maximum visits for your plan noting if the therapy services (e.g. PT and OT) are combined.


What is the difference between in-network and out-of-network services?


If a therapist is “in-network” then they have contracted pay rates with your insurance company and your plan. Following, your medical provider can typically give you a good idea of how much your medical services will cost.


If a medical provider is “out-of-network” then they do not have a contract with your insurance company or your particular plan. If you really want to see that medical provider then you can ask your medical insurance company what your out-of-network coverage is. Sometimes, the insurance company will still pay for a percentage of out-of-network services, although at a lower rate than they would pay for in-network services.

I have seen families opt to see an out-of-network therapist because the facility is closer to home than in-network facilities or because of they feel more confident in the expertise of the out-of-network provider or because they realize that the expense of in- and out-of network providers was not very significant.


You can click through these links to find more explanations of Medical Insurance Terminology and Deductibles. 


About the author:

Dr. Allison Hall, PT, MPT, DPT is a pediatric pediatric physical therapist and the CEO/founder of bloom (, an eLearning platform for parents/caregivers to receive information from pediatric experts. Dr. Hall is determined to improve the access of parents/caregivers to the knowledge of pediatric experts regardless of barriers such as remote living, disabilities and/or inadequate medical insurance. She is part of tight knit party of five plus two rescue dogs. She finds joy in walking in nature, traveling almost anywhere, learning new things, pondering life intensely, caring for others deeply and doing anything that makes for a good laugh with family and friends.

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