Hi, gang! I’ve talked to you about things to 
consider when setting your fees. And, I’ve also talked to you about when / how you may want to reduce your fees. Now I’ve received a request from one of our readers asking for samples of reduced fee agreements to use with clients. Do you have anything to share? If so, please send us links to those agreements OR email me back channel at Tamara at TamaraSuttle dot com and I’ll share them here.
I’m looking forward to seeing what you come up with!
I have a policy for clients who do not have insurance and wish to see me, or who choose not to use their insurance due to large deductable. I have them sign a form stating they do not wish to use their insurance, each session and charge them half the rate of the session, however payment must be cash/check at time of service. No billings. The same is true for those who do not have insurance.
My theroy is that it is better to be busy working with people than sitting around. I continue to apply for insurance boards, however some simply do not take new providers…. I won’t mention names!!! Half my standard fee less the cost of billing processing is about what I make, and sometimes more than I make from some of the insurnace companies anayway.
Oooooh, nooooo! Debbie, if I am understanding you correctly, you charge your clients who use insurance one fee . . . and you charge your clients who do not use insurance a different fee. Is that correct? If so, you are likely committing insurance fraud. I don’t mean to scare your but please seek consultation with a local mental health attorney immediately to make sure that what you are doing is both ethical and legal. I’m afraid you might be getting yourself in big trouble!
Tamara Oh, my!!! This is not my intention. I will contact my supervisor immediately. I will also contact a mental health attorny I know about through another group I am in. I was not aware that this was a problem. I do not wish to be reported.
Hi again.. I just left a message with a local mental/medical health attorney. I anxiously await his return call. Thank you for your help in correcting this.
Debbie, you are so welcome. We all make mistakes . . . and I will be delighted if the mistake this time is mine. I hope you will share what you learn with the rest of us so that we can all learn! I’ve found that the mistakes I’ve made have resulted in some of my clearest lessons:).
Tamara,
I remember hearing about this before – that we cannot charge clients with insurance one rate and a different rate to others – but knowing that, how does a sliding scale work? Is that not the same concept?
Hi, Lauren! Welcome back! It’s not the same unless you uniformly apply the same “test” for financial need to everyone – including those who have access to health benefits. Check out this post on How to Create and Use a Sliding Fee Scale to see if it clarifies anything for you.
Yes, I have been playing phone tag with the attorney, however I belive that Tamara is correct. There must be a written policy regarding reduced fees for clients first off. I have this in place. Then the policy has to be applied uniformally acorss all clients. I have clients sign a consent to not charge insurance form each time they come for session. I am not exactly sure if this is kosher, but as I said, I am awaiting contact from the attorney and my supervisor. For those clients who do not have insurance, I need to make sure my billing service is cleraly chargning the client for the full amount of the sesssion, and then notes on the bill that I am accepting the standard reduced fee for the client, so there is record both in policy and billing practice.
I know the federal guidelines are the ones that surpass any insurance companies, such as BCBS. So standards should meet those guidelines, that come out hourly it seems, if you get on one of the list serices my billing service is on. Constant updates on things important and things not so important to my practice. The federal guidelines are above the state guidelines even. I sure wish I would have had a good class in this when I was in graduate school. There was no “Business of private practice” 101 or 901 or 801 at all!!! I hope current programs offer something nodays. It is not fun to learn via the method of stomach ulcers and migraine headaches, lol…
Hi, Deborah! Thanks for checking on this and staying engaged in the conversation. I’m looking forward to hearing what your attorney says. In fact, you might want to take this entire thread of discussion to him to make sure you don’t miss any part of this discussion.
And, as for that class that you didn’t get . . . I’m lining up my 2013-14 speaking gigs and workshops right now so please let your professional associations and alma mater know that I can help them out with those practice-building issues! (And, I am always looking for an excuse to travel to you!:)
How does Pro Bono work then, given what’s been addressed?
Hey, Jennifer . . . Can you ask this differently? I’m not sure what you are asking . . . .
Sorry for such a brief and curt interjection into the conversation! I was headed into session and failed to complete my thought before posting! I am new to private practice, and have so enjoyed the dialogues on your site!
In regards to fee setting, I am a bit confused. The way I have been advised (by fellow colleagues) to do my billing, I have my set fee and expect it in full at time of service. I do not bill insurance, but am on a couple of panels. If my clients choose to bill their insurance companies for reimbursement, I provide them with the necessary information to bill their insurance and collect reimbursement.
My very first client was referred by a colleague of mine, whom I share space with. She sees the sibling of my client. I am a panel provider for their insurance company and as such was advised by my colleague to bill them at a reduced rate (the rate that their insurance company would pay me), for this is what she does. So, I have. One of the questions I have, is when providing them the info necessary for reimbursement, do I solely put what they have paid me or do I put my full fee?
Further, the reduced fee discussion made me wonder about how pro bono work is documented an decided for which clients given it is insurance fraud if you bill one client one fee and another client another fee? Help! Wondering if I’m not billing as I should?!?!
Thanks, Jennifer, for dropping back in to clarify. First of all, I want to encourage you to join or create a consultation group so that you can get the perspectives and support of multiple and seasoned therapists. You colleague has given you bad advice. Your full fee should be the same for every client regardless of how they are paying their bills. You don’t put down a different amount for you cash-paying clients than you do for your clients paying via insurance. And, yes, you put your full fee on their bills and what they paid you. If there remains a balance, then you will also record that on their receipt. And, by the way, clients are responsible for paying your fee regardless of whether or not their funds come from insurance companies. If you have entered into contractual agreements that stipulate something different than this with managed care companies, those would be the exceptions.
My recommendation is that if you have taken into consideration the ethical and legal parameters and choose to offer professional services pro bono i.e. at free or reduced rates for the public good, then your receipt for your services will reflect your (1) usual and customary full fee, (2) the amount the client actually paid, (3) the remaining balance, and (4) what you intend to do about that balance. For the last part of the receipt, I would indicate something like “waived” or “deferred” or “written off” as a loss. This is a more accurate reflection of the transaction and allows you to track your contributions of pro bono work than recording a reduced fee as the starting point.
Jennifer, I’m glad that you are part of our community and I look forward to supporting you on your journey as you build your practice!
Jennifer,
An insurance company shouldn’t have a problem with a pro bono client (to my knowledge) because you’re not actually charging them a different amount than another client. I know it sounds like you are because you’re charging them nothing, but you’re not actually asking the client to pay you a different amount than your regular clients. Also, pro bono is a concept that is widely expressed in textbooks and classes, and it’s even listed in the American Counseling Association Code of Ethics (2005) under the introduction to Section A. Does this help?
Hey, Lauren, I understand what you are saying but you need to remember that “pro bono” technically means free or reduced-fee for the public good so it could still include an exchange of money.
Tamara,
I had forgotten that pro bono could include free or reduced fees. Along that line, I have heard of counselors who recommend that clients do volunteer work as a kind of payment for their services. I’m not suggesting any volunteering that relates to the counselor or bartering (such as doing the counselor’s landscaping), but something that is more directed at the greater good (as mentioned before) or to show the client and the value of giving back to others. Examples could be volunteering at a community center or local hospital or nursing home.
Just to clarify, you’re saying that if fees are documented as waived or partially waived (and I’m sure reasons will be documented in the chart), we are initially recording that we charged the full fee and waved the remainder, so it doesn’t look like we charged a different fee?
That’s right, Lauren, and I might not initially indicate on a receipt that I’ve written off / waived a portion of my fee. Often I may not know initially that that is what I will end up doing. And, I would document the clinical relevance and impressions in the chart.
I can see from the very thoughtful discussions here, that my origonal post sounded off the cuff and prety unprofessional. This is indeed a very complex topic. I haven’t had time to get back to the attorney, but I hope to this next week and send his assistant this blog link. I have not forgotten my supervisor either. I spoke with my billing agent and she and I have attended several excellent workshops on billings etc. I have one standard fee, but I do offer a reduced fee and or (I am not sure which is the correct term.) She does send out statements as described above with the exact amount charged and the portion, waived/deferred. Standard reduction offered to all clients is 1/2 my normal fee. I have many clients with no insurnace, and this is standard. If clients choose not to use insurance due to a decuctable they will never meet, I have a form stating they are choosing not to use insurance but to pay, either the full amount or a my standard reduced fee. If they have insurance I am not a provider for, this is also the same.
Another interesting situation I had arise that I spoke to my supervisor about was this… I had a friend of a person who wanted to be a client offer to pay for sessions with me. I said this would be fine and the benefactor send me CASH in the mail!!! She wished to remain anonomyous I believe, and did not stay on the phone long. I told her the cost of intake and sessions. I was send enough money to cover intake and the first session or so I believe. My supervior, whose daughter is an attorney, had several things to say about this.
Sending money thought the mail, is not a good idea. I was not expecting this to happen! She said I needed to get all the contact information on this benefactor and send her a receipt of exactly what I recieved, when and for what services. This then becomes an issues of confidentiality. I didn’t list who the sessions were for as I didn’t have a release at that time.
When I had seen the client and further sessions were scheduled, the client had “expected” them at the reduced fee. She didn’t want to put her benefactor out for the full rate. This was uncomfortable for me and my client. So now I have a policy for clients who wish to pay for services via a benefactor. It states that all payment arrangements must be made prior to intake, and must be in writing, between the client benefactor and me. Also my supervior stated that whenever a client pays cash for a session, that a statement at the time of payment is a good idea, along with a statement from my billing agent. My cash payment statement should state exactly what the billing agents statement says, what the code is etc. Maybe that is excessive, but I would rather be redundent than in error.
I am enjoying reading and I will keep updating when I contact the elusive attorney and my supervisor!
Deborah, we’re all looking forward to your attorney’s opinion.
And, thank you for taking time to share this scenario concerning benefactors. I, too, have had this come up a couple of times in private practice. My situations were not quite as complicated as yours because the benefactors did not require anonymity. Nevertheless, you have brought up one more of those potentially sticky situations that never got talked about in graduate school and in doing so have provided great food for thought before it’s actually needed….Thank you!
Hi again everyone. I just spoke to the attorney’s assestant and she is going to research this and get back to me no later than tomorrow at 12 noon. I will be posting as soon as I hear. Thank you!!!
I so appreciate this discussion and all that has been offered here. This has been so helpful and discussion provoking in my consultation group. It reminds me that I have so much to learn and benefit from from discussion groups such as this. Thanks for creating this space, Tamara, for which we can have such rich dialogue!
Jennifer, you are so welcome! Thank you for sharing my blog with your consultation group! I’m honored!
Hey – care to drop back in and tell us about your consultation group? I know I and others would love to hear what it’s like, how it’s run, etc.
This is an interesting discussion. I look forward to reading your attorney’s response. I wonder if it is ethical to offer a lower rate if a financial affadavit is on file and you keep a running tab with the amount owed and present a bill with paid and amount owed at regular intervals. I did consult a mental health lawyer who indicated that I may waive a portion of a patient’s copay provided that I do this. Furthermore I may only do this for one or two patients who are in extreme financial distress…not as a regular policy.. Also, I think it is ethical to extend the reduced insurance rate a patient is paying in the event their health insurance cuts them off and they desire additional sessions.
This discussion has been very helpful to me. I recently agreed to work with a client for a reduced fee. At the time of the first session, the intake session, she said that she did not have the money. She said that she would bring the money a few days later. She did not bring the money. I have not called her or sent a bill. One lesson I have learned is not to accept the client until the person has the money to pay for the session. What should I do?
Hi, Rhonda! I’ll bet there’s a lot of us out here who are nodding our heads and thinking “been there, done that” so know that you are not alone.
One of the hardest things for me when I started in private practice was setting up my boundaries around money and time. I’m sure there’s a lot of reasons for those mushy boundaries that most new therapists experience. The trick is to first recognize that this really is a boundary issue (or two or three) and own it!
If you are ready to own it, then take the time and get the supervision / consultation / therapy you need to figure out what that’s about – a lack of information, a sense of not deserving to get paid, a tendency toward people-pleasing, a sense of desperation and fear around not having enough clients, etc.
The list can go on and on . . . and it will continue to get in your way i.e. keep showing up on your doorstep . . . until you recognize it and deal with it. Once you understand how / why you let this happen, you can begin to put some policies and practices in place to minimize the likelihood of this happening in the future and choose how you will want to handle it.
As for me, when these little . . . life lessons in my business crop up . . . . Once I get (really get) the lesson . . . I tend to say a quiet “thank you” and move on. When it happens the next time . . . with the next client, I am better prepared to confront it for what it is and meet the challenge head on.
In this case, I would send her a letter, lean into mutual trust and the relationship that you believe you had with her, remind her that she had made legal agreements (both verbal and in writing) to pay you for your professional services, inclose an invoice and request payment within 10 days.
Having said that, don’t be surprised if she doesn’t send the payment. I believe people and situations are put in our lives for reasons. Perhaps she was your teacher and you’ve learned your lesson. It’s not “fair.” It’s not necessarily “right.” But it is an invaluable lesson that every therapist in private practice must learn.
Blessings to you on your journey, Rhonda, and I hope you will drop back in here to let us know how you decide to handle this situation so that we can all learn from you, too!
Rhonda, Thanks for sharing your conundrum. I hope that this is an isolated incident for you and that you’re able to get some policies in place. I know that setting my fees is something that I struggled with when I was putting my policies together, but I knew that I wanted to have payment prior to providing services so I wouldn’t run into something like this.
Tamara, You bring up some really good points about understanding why this is happening. I remember when I used to feel really guilty for being paid for listening to people, but thank goodness, 98% or so of that feeling had disappeared before I entered grad school. There’s probably still .5% (notice the decimal point) that struggles with this, but I do have a pro bono client at my agency because she lost access to insurance and I knew that she would likely not have any mental health care because of this. My reasons for taking her on as pro bono were mostly because I felt that she needed treatment and also because I felt I already had a rapport with her, so it made sense. I check in with myself periodically to make sure that it is still best for her and to make sure that my own feelings of wanting to be helpful are in proportion with what is needed for her. It’s a continual learning experience.
I never struggled with asking to be paid. But I did struggle with feeling like I shouldn’t ask for the usual and customary fee because I was new and therefore believed I knew less . . . . What I know now is that while self-reflection is useful, self doubt often gets in the way of offering great work with a client.
So interesting to read all of this! Tamara, for the client that ended up not paying, what are your thoughts of requiring a credit card on file for these kinds of incidents (of course explaining to the client in writing while you address your fee for service and/or missed sessions policies)? I haven’t done this but was just wondering if it would be helpful or protective?
Marie, I haven’t done this because it hasn’t been an issue for me but once or twice over the last 20 years. However, many therapists do require a credit card on file and find that to be a really easy way to address these types of incidents. What I would add to that, though, is that (1) repeated money issues or missed sessions need to be addressed as indicative of a clinical issue in therapy.And, (2) if you are finding that you are avoiding addressing these issues or are relieved that you do not have to address these issues, then the issue – at least in part – resides with you, the therapist, and needs to be addressed in supervision / consultation / therapy.
Hi Tamara,
Moving forward, I will establish a policy re reduced fees and pro bono fees. I do need to get more information; I will definitely do my research so that I can develop policies that work for my clients and me. This is the first time and the only time that this will happen.
When I came in this morning to my office, there was an envelope on the floor. The client had slipped an envelope with money in it under my office door with a note saying that she will call to make her next appointment. When she comes in for her next appointment, I will thank her for her payment, review the new policy with her in writing and verbally so that we can move forward in a healthy, theraupeutic relationship.
I agree with Lauren that it’s best to have payment prior to providing services. It sets clear boundaries and the client knows what the rules are and what to expect.
Nice. I continue to learn from my clients, too – even 20 years into the field! Thanks for the follow up!
About reduced rates…. I have a couple of clients that I was seeing during my school internship who have asked to continue with me (There is no competition clause kind of issue). I was thinking that since they were with me before, at my student rate, I would just continue with their same fee, even though my fee for new clients has now increased. Is this ok, since I was seeing them before I raised my rates? I have consulted but have received different opinions, what’s yours?
Marie, I’m not an attorney so I want to be clear that I am not offering legal advice. However, from an ethical standpoint, all clients need to be offered the same opportunity for that reduced fee; from a marketing standpoint, I suspect you have more to offer to your clients now than you did when you started with these clients as a counselor-in-training; and, from a clinical standpoint, I wonder if you have some fear / concerns about asking them for your usual and customary fee . . . .
Marie, there is an ethics consultation person at ACA. You do have to be a member to use her for consultation, if I recall correctly. Her name is Erin Martz and her extension is 314. Erin’s secretary is Debbie Johnson, and her extension is 321. Erin may be able to shed some light on this. I was talking to her about another question a few weeks ago and I asked something about fees in the course of the same conversation. Also, if you wanted to speak with ACA’s lawyer (Nancy Wheeler), you have to talk to Erin first. I don’t really understand the guidelines for what Nancy will address and what you will be referred to a private attorney for, but this may at least give you a starting point.
Thanks, Lauren! A terrific resource for counselors!
Wondering if social workers and psychologists have similar resources . . . . Anyone know?
Other professional organizations seem to provide similar services.
Here is a link for marriage and family therapists: http://www.aamft.org/iMIS15/AAMFT/MFT_Resources/Legal_and_Ethics/Content/Legal_Ethics/Legal_Ethics.aspx?hkey=2e3ddff7-9dff-45f6-9344-a8f152c91681
Here is a link for social workers: https://www.socialworkers.org/nasw/ethics/
Here is a link for psychologists: http://www.apa.org/ethics/
For physicians or psychiatrists, it’s not as clear whether there is consultation offered, but here is a link to some ethical and legal information from the American Medical Association: http://www.ama-assn.org/ama/pub/physician-resources/medical-ethics.page?
Perhaps we could make a list of possibilities for different disciplines.
Hi Tamara, I’ve also heard that charging a lower rate for non-insurance clients is insurance fraud… however, my doctors’ office just told me that they do this… we’re talking a large-scale hospital system. Do you know how a doctor or hospital is able to get away with it? Could there be a loophole?
Hi, Jennie! Welcome to Private Practice from the Inside Out!
I’m not an attorney and not pretending to dole out legal advice.
However, I don’t believe that the way you describe this practice is legally permitted by physicians or mental health professionals.
I have heard of health care providers misdiagnosing and / or misrepresenting their services in order to obtain larger reimbursements.
But, charging different rates for cash vs. third-party reimbursement, as far as I know, is basically understood as “insurance fraud.”
The only way you are going to know for sure if there is a legal “loophole” that will serve you or your clients is to speak with your liability insurance company and / or an attorney in your own geographic area.
Hey Tamara,
I have also heard that charging different rates is fraud but I think its really important more professionals talk about this because it sounds very confusing I am interested how the pro bono portion works in community settings where clients do not have access to insurance such as jails and prisons. It suggests this work in the ACA codes but does not advise how much you could or should do? Also did you say above that you keep reciepts for your pro bono work? Is that just for tax purposes? Because you are not billing anyone. Thanks so much for the info!
Hi, Ka! Thanks for showing up here to extend the conversation!
You ask some really great questions.
When I am talking about pro bono work here in this post, I am referring specifically to pro bono work as a marketing strategy in private practice.
It’s just not very effective in achieving the desired effect i.e. growing a practice, building your authority and reputation, gaining reciprocal referring relationships, etc..
However, I do want to acknowledge that pro bono work as service work or as training in which you might be learning new skills or polishing up skills can absolutely be offered in an ethical and legal manner.
Just be clear that whether this is your charity work and/or your efforts to build your work experience and resume and/or are building your skill level . . . those are not necessarily going to build your practice – at least not in a way that is going to be profitable or serve you in an effective business model.
I did say that I keep “receipts” and probably should have said instead that I provide and keep “statements” of services rendered and that those statements are the same thing that I provide to all patients.
It is not for tax purposes because I am not taxed on zero dollars.
Instead, it is the professional way that allows my clients and I to document our professional relationship and the service provided.
I appreciate you asking and allowing me to clarify.
I hope you’ll be back to chat again soon, Kay!