Your patient calls asking a simple question: “Does your insurance cover this?”
Your coordinator looks at their insurance card and responds: “Yeah, we take your insurance.”
The patient books an appointment, shows up for the first session, and then later that week, their insurance denies the claim. The patient calls angry. Your billing department scrambles. The patient is left with an unexpected bill.
This scenario repeats itself across neuromodulation clinics weekly.
The irony? Your coordinator’s answer was technically true—your clinic probably does take that insurance. But the real question the patient was asking is completely different. They weren’t asking “Does your clinic accept my insurance provider?” They were asking “Will my insurance plan cover TMS therapy for my specific situation?”
These are not the same question.
And the difference between getting this right and getting it wrong is the difference between smooth patient onboarding and insurance denials that destroy patient relationships.
The Insurance Question Your Team Is Getting Wrong
Here’s what typically happens:
Patient asks: “Will my insurance cover TMS?”
What coordinators say: “Yes, we take [insurance provider]. You’ll just need to provide your member ID and we’ll process it.”
What should happen: A nuanced conversation about:
- Whether their specific plan covers TMS
- Whether they meet their insurance company’s coverage criteria (which are different from FDA criteria)
- Whether prior authorization is required
- What their out-of-pocket costs will be
- What documentation the insurance company will need
The first answer seems simpler. But it’s setting up the patient for a denial and a bill they weren’t expecting.
Why Insurance Coverage for TMS Is Not Simple
Let’s establish the fundamental distinction: FDA approval does not guarantee insurance coverage.
The FDA approved TMS for depression in 2008. Since then, most major insurance plans have recognized TMS as a covered treatment. But “most” doesn’t mean “all,” and coverage varies dramatically by plan type, state, and diagnosis.
Here’s what insurance companies actually care about (and what your team needs to understand):
1. Medical Necessity
Your insurance company doesn’t just ask “Does TMS work?” They ask “Is TMS medically necessary for this specific patient?”
This typically means:
Treatment history requirement: The patient must have failed at least 2 antidepressant medications (sometimes 3–4) at adequate doses for adequate duration. Some insurers are stricter than others. Some require failure from different medication classes. Your coordinator needs to know: “We can’t approve TMS until we have documentation that you’ve tried and failed antidepressant X at dose Y for Z weeks.”
Current medication requirement: Most insurers require the patient to be on an oral antidepressant concurrent with TMS. You’re not replacing antidepressants with TMS—you’re augmenting them. This is a compliance requirement, not just clinical advice.
Therapy requirement: Many insurers require documentation that the patient is engaged in concurrent psychotherapy. If they’re not, the insurance company may deny coverage, reasoning that therapy should be the first augmentation strategy, not TMS.
No psychosis history (usually): Most plans exclude patients with psychotic disorders or limit coverage for patients with any history of psychosis. This is often a disqualifying factor that coordinators don’t catch until after the patient has started treatment.
Severity threshold: Some plans require documentation that depression is “moderate to severe,” not mild. This is subjective and a point of contention with insurers.
If your patient doesn’t meet these criteria according to the insurance company’s definition, they won’t cover it—regardless of what the FDA says or what your psychiatrist recommends.
2. Prior Authorization
Prior authorization is not optional. For most insurance plans, prior authorization is required before treatment begins. This is not a billing step—it’s a clinical step.
Prior authorization means: Before the patient receives treatment, your clinic submits documentation to the insurance company, and the insurance company must explicitly approve the treatment before it begins.
Without prior authorization approval, the claim will be denied. Full stop. The patient becomes responsible for the full cost.
Yet most coordinators don’t explain this to patients. They book the appointment. The patient shows up. Treatment begins. And then 2–3 weeks later, the insurance company sends a denial letter because prior authorization was never requested or approved.
Here’s what prior authorization typically requires:
- Copy of the patient’s psychiatric diagnosis
- Documentation of all previous antidepressant trials (medication names, doses, duration, why they failed)
- Current medication list
- Documentation that the patient is currently on an oral antidepressant
- Psychiatrist’s recommendation for TMS with clinical justification
- Treatment plan (number of sessions, frequency, expected timeline)
- Copy of the patient’s psychiatric evaluation
- Sometimes: copies of therapy notes showing the patient is in concurrent treatment
Insurance companies typically respond to prior authorization requests within 5–10 business days. But during that waiting period, many coordinators book patients for treatment anyway, assuming approval. When denial comes, the scheduling falls apart.
3. Plan Type Exceptions
Commercial insurance: Usually covers TMS. Requires prior authorization. Typical coverage is 30–36 sessions at 60–80% of cost after deductible.
Medicare: Covers TMS. But coverage rules are different from commercial plans. Requires specific modality codes. Prior authorization often required. Out-of-pocket costs vary by secondary insurance.
Medicaid: Here’s where it gets complicated. Each state’s Medicaid program has different coverage rules. Some states cover TMS generously. Some states cover it only for highly specific cases. Some states don’t cover it at all. Your team needs to know the specific rules for your state’s Medicaid program.
High-deductible health plans: May cover TMS, but patients’ out-of-pocket costs are often prohibitive. A patient with a $5,000 deductible might owe thousands in out-of-pocket costs even though insurance “covers” TMS.
State employee plans, union plans, specialty plans: Coverage varies. Some of the most restrictive coverage comes from self-insured employer plans that have their own unique rules.
Uninsured patients: Not covered. But might qualify for patient assistance programs through equipment manufacturers or pharmaceutical companies if Spravato is involved.
Your coordinator can’t possibly know the specific rules for every plan. But she needs to understand that plan type matters significantly, and she shouldn’t make assumptions.
Common Insurance Scenarios and How To Answer Them
Here are the conversations your team should be having with patients:
Scenario 1: Commercial Insurance Patient, Treatment-Resistant Depression
Patient asks: “Does my insurance cover TMS?”
Coordinator should say: “TMS is typically covered by commercial insurance plans like yours, but there are specific requirements. To confirm coverage, I’ll need to verify your benefits and submit prior authorization to your insurance company. This usually takes 5–10 business days. Here’s what we’ll need: documentation of previous antidepressant trials, your current psychiatrist’s recommendation, and confirmation that you’re on an oral antidepressant. We can often coordinate this directly with your insurance company, but I want to set realistic expectations—coverage isn’t automatic, and there may be out-of-pocket costs depending on your plan’s deductible and coinsurance. Once we hear back from your insurance company with either approval or any questions, we’ll know exactly what you’ll owe.”
Translation for patient: “Your insurance probably covers this, but I can’t promise it until we officially ask them. We need to do paperwork first. You’ll likely have some out-of-pocket costs.”
Scenario 2: Medicaid Patient
Patient asks: “Does Medicaid cover TMS?”
Coordinator should say: “Medicaid coverage for TMS depends on which state you’re in. Because we’re in [State], our state’s Medicaid program [does/doesn’t cover] TMS under these specific conditions: [specifics]. Let me verify your specific Medicaid plan and confirm coverage. Some Medicaid plans may require prior authorization, and some may have specific providers they work with. I’ll reach out to your plan directly to confirm whether you qualify and what the approval process looks like.”
What NOT to say: “Medicaid doesn’t usually cover TMS” or “Medicaid always covers it.” Both are potentially wrong depending on the state.
Scenario 3: Medicare Patient
Patient asks: “Will Medicare cover TMS?”
Coordinator should say: “Medicare does cover TMS, but the process is a bit different from commercial insurance. We’ll need to verify your specific Medicare plan—some plans are more restrictive than others—and check whether you have secondary insurance. Prior authorization is often required. We’ll coordinate this with Medicare directly, but it’s important to understand that your out-of-pocket responsibility will depend on factors like your Part B deductible and any coinsurance. We’ll give you a clear estimate before treatment begins.”
Scenario 4: High-Deductible Plan Patient
Patient asks: “My insurance says they cover TMS. Why would I owe so much?”
Coordinator should say: “Your insurance does cover TMS, which is great. But because you have a high-deductible plan, you’re responsible for costs until you’ve met your deductible. Let me walk you through the math: Our facility charge per session is $X. Your insurance’s contracted rate is usually $Y, which might be lower. Since you haven’t met your deductible yet, you’ll owe a portion of that contracted rate per session out-of-pocket. For a 36-session course, here’s what that looks like financially [provide specific estimate]. Once you hit your deductible, your coinsurance kicks in, and your per-session cost will be lower. Some patients choose to defer treatment until they meet their deductible early in the year, or they set up a payment plan with us. What makes sense for your situation?”
Scenario 5: Out-of-Network Insurance Patient
Patient asks: “Your clinic isn’t in my insurance network. Can I still come here?”
Coordinator should say: “Yes, and here’s how it works. Because we’re out-of-network, you’ll likely have higher out-of-pocket costs than if you saw an in-network provider. However, many insurers offer what’s called a ‘single-case agreement,’ which can bring our out-of-pocket costs closer to what you’d pay in-network. Here’s the process: We submit a request to your insurance company asking them to make an exception and contract with us for your care. This process takes 1–2 weeks and isn’t guaranteed, but we have success with this frequently. In the meantime, I can give you a cash-pay estimate so you know what you’re looking at if the single-case agreement doesn’t get approved.”
Scenario 6: Insurance Denies Prior Authorization
Patient says: “I just got a letter saying my insurance denied TMS. What now?”
Coordinator should say: “Insurance denials happen, and we have options. First, let’s look at the reason for denial. Common reasons are: missing documentation (like therapy notes), the insurance company wants to see failure of more antidepressants first, or the plan simply doesn’t cover TMS for your diagnosis. Once we understand the reason, we can either: appeal the denial with additional documentation, transition you to a covered treatment option, or discuss cash-pay options. This is frustrating, but it’s not the end of the line. Let’s figure out the next step together.”
What Your Team Should Know (But Probably Doesn’t)
Here’s the institutional knowledge your coordinators need:
1. Insurance Verification Is Step One, Not a Checkbox
Before a patient is scheduled for their first session, insurance verification should be complete. Not after their first appointment. Not the day treatment starts. Before scheduling.
This means your coordinator runs benefits, confirms coverage criteria, confirms prior authorization requirements, and ideally, either obtains prior authorization or has a clear timeline for when it will be obtained.
2. Documentation Is Everything
Insurance companies are obsessive about documentation. If your psychiatrist recommends TMS but didn’t document the patient’s antidepressant history in the chart, the insurance company will deny it requesting “documentation of failed medication trials.”
Your team needs to work backwards from insurance requirements to documentation requirements. Before submitting prior authorization, your chart should contain:
- Clear diagnosis (major depressive disorder, typically)
- Documentation of at least 2–4 failed antidepressant trials, including:
- Drug name
- Dosage
- Duration (how long the patient was on it)
- Why it failed (side effects, ineffective, etc.)
- Current medication list (the patient must be on an oral antidepressant)
- Psychiatric evaluation confirming suitability for TMS
- Documentation of concurrent therapy (if required by plan)
- Contraindication screening (e.g., no ferrous implants, no implanted cardiac devices)
- Patient consent form
If any of this is missing, the insurance company will request it, delaying approval by 5–10 days.
3. Prior Authorization Doesn’t Mean Coverage
Approval of prior authorization means the insurance company has authorized the recommended treatment. It does not mean the patient’s out-of-pocket cost is zero. It means the insurance company agrees that TMS is medically necessary and will cover it according to the patient’s plan’s terms (deductible, coinsurance, etc.).
Your patient might still owe thousands. The prior authorization approval just confirms that the cost, whatever it is, won’t be rejected as medically unnecessary.
4. You Can’t Predict Out-of-Pocket Costs Without Knowing the Patient’s Deductible and Coinsurance
A patient with a $0 deductible and 80% coinsurance will owe nothing for a $300 session. A patient with a $5,000 deductible and $300 contracted rate will owe $300 for every session until the deductible is met.
Always run benefits and ask:
- Deductible amount
- Deductible met/remaining
- Coinsurance percentage
- Out-of-network percentage (if applicable)
- Any annual maximums or session limits
With this information, you can calculate: “For 30 sessions at $300 per session, assuming your deductible hasn’t been met, you’ll owe approximately $X.”
5. Some Insurance Companies Have Specific Prior Authorization Processes
United Healthcare wants specific forms. Cigna wants different documentation. Aetna has another process. Your billing department should have a master list of the top 20 insurance companies you see and the specific prior authorization process each one requires.
Many insurance companies now accept electronic prior authorization requests through systems like Change Healthcare or Availity. If your clinic isn’t using these, you’re adding 3–5 days to the prior authorization process manually faxing requests and waiting for responses.
6. Medicaid Managed Care Plans Have Different Rules Than Fee-For-Service Medicaid
Not all Medicaid coverage is identical. Your state’s fee-for-service Medicaid might cover TMS. But your state’s Medicaid managed care plans (plans that contract with Medicaid to provide services) might have different coverage rules, different prior authorization requirements, and different contracting providers.
Your team needs to know which Medicaid managed care organizations operate in your state and what their specific TMS coverage looks like.
7. Appeal Rights Exist
When an insurance company denies prior authorization or claims, patients have the right to appeal. Many clinics don’t pursue appeals, assuming they’re futile. But appeals often succeed, especially when the appeal includes additional documentation the initial request lacked.
Your clinic should have a clear appeals process: when to appeal, what documentation to include, and how to track appeal status.
What You Should Tell Patients Upfront (Before They Schedule)
Here’s the script your team should use for every new patient inquiry about insurance coverage:
**”Great question about insurance. Here’s what I want to set realistic expectations. TMS is covered by most insurance companies, but coverage depends on your specific plan and whether you meet their criteria.
Here’s what I need to do: I’ll verify your benefits and submit prior authorization to your insurance company. This typically takes 5–10 business days. During that time, I’ll find out:
- Whether your plan covers TMS for your diagnosis
- What your out-of-pocket costs will be
- Whether there are any coverage restrictions
I can’t book you for treatment until we hear back from your insurance company with either approval or any questions they have. I know that’s not instant gratification, but it protects you—if we treated before getting approval and your insurance denied it, you’d be responsible for the full cost.
Once we get approval, I’ll give you a clear cost estimate, and we can schedule your first appointment.
Does that make sense? Here’s what I’ll need from you to get started…”**
This sets expectations upfront: coverage isn’t automatic, prior authorization takes time, and you won’t schedule until approval is clear.
Legal and Compliance Notes for Your Team
Your coordinator should never:
- Guarantee insurance coverage (“Don’t worry, insurance definitely covers this”)
- Guarantee specific out-of-pocket costs without running benefits
- Tell a patient their insurance plan “doesn’t cover TMS” without verifying their specific plan rules
- Start treatment before insurance verification and prior authorization is complete
- Make up prior authorization criteria (“Your insurance requires you to fail 5 antidepressants first”) without confirming those specific rules
All of these create liability. If a patient is quoted an out-of-pocket cost that turns out to be wrong, or if you start treatment without prior authorization and the insurance company denies it, the patient will assume your clinic misled them.
Document everything. When your coordinator verifies benefits, document: date verified, insurance company name, plan type, deductible, coinsurance, and whether prior authorization is required. When prior authorization is submitted, document: date submitted, reference number, and date response expected. When approval comes back, document the approval date and any restrictions or conditions.
This protects you legally and ensures continuity if another team member needs to follow up.
The Bottom Line
The insurance question every TMS clinic gets is actually three questions in one:
- Does your insurance company cover TMS?
- Do I personally meet my insurance’s coverage criteria?
- How much will I owe?
Your coordinators need to have a clear, methodical process for answering all three questions before the patient is scheduled for treatment. This takes time and nuance. It’s not something you can answer in 30 seconds over the phone.
But if you get it right, you convert inquiries to scheduled appointments, you avoid insurance denials, and most importantly, you build trust with patients who feel informed and protected.
And that’s when TMS clinics stop losing leads to better-organized competitors.
