One of the choices every practitioner in private practice has to make is how to set your fees.
Karlaye from Arizona writes . . .
. . . I set my base fee at $ 125 per hour . . . but the insurance companies that I work for set it at $85-95. If I have a private patient, its fine, but when I have a client that wants to use their insurance, I can only set it at that price. Is that correct?”
And, Jason from Colorado asks . . .
Is it OK to charge my cash-paying clients $85 / hour and charge my insurance- paying clients $100 / hour? It’s the only way I can see surviving in this economy.”
When setting your fees, you need to be careful. Health care providers are the most common perpetrators of insurance fraud. Sometimes such fraud occurs out of greed; however, it is much more likely that you may be engaging in fee-related practices that are illegal and not even know it.
If you have chosen to work with insurance companies, make sure that you are not charging your cash-paying clients a different rate than those who are filing on their insurance. Regardless of your intent, charging different clients different fees for the same service (based only on whether or not your client pays cash / uses insurance) is not OK.
Here is where I talk about Reduced Fees, Sliding Scales, and Lessons Learned. [Updated 09-09-15]
This is an interesting topic that I have talked to a colleague of mine about on occasion. What about the issue of health care providers charging insurance patients more than the contracted rate?
Hi, Jill! Thanks for asking! If you have contracted with a client to charge a certain fee, you are not allowed to charge your client more that that contracted rate. Neither can you collect a higher co-payment than the amount you initially agreed upon. Such practices are illegal, unethical, and would probably cost you both clients and referrals in the long run.
A better practice would be to read the fine print with each managed care contract that you are considering and make sure that you agree to each requirement in it. If you cannot understand all the legalese that is sometimes in the contracts, then take the time and spend the money to have an attorney review them for you. Under no circumstances should you sign a contract that you do not understand or fully agree with. It could be a costly mistake.
Tamara,
I tried to click on one of your links about the sliding scale and it did not open. First where would I go to determine the poverty line and how would I go about establishing a sliding fee scale for the State of Florida?
Hi, Amanda! It’s good to have your voice here! I can’t find a broken link but here is a link to the 2015 poverty guidelines for the USA.
Plz address the need for and differences between NPI and Caqh.
thx.
Kristene
Hi, Kristene! I’m not familiar with the acronym, CAQH. Can you please tell me what this stands for or refers to? Then, perhaps I can help.
NPI is your national provider number. Think of this like a social security number for healthcare providers. CAQH is the Council for Affordable Quality Healthcare. They are an organization which provides a centralized credentialing database for insurance companies. In short, they do the legwork for insurance companies in terms of collecting and verifying documents such as your license, insurance, and state applications/attesting. When you apply to some companies they will issue an invitation to join CAQH. You will get a CAQH number and portal to provide and verify your information. That company and any others you authorize can then use this to credential you. It make the process of credentialling much faster.
Kindly,
Kelly Peyton. MA, LPC-I, CCTP
http://www.houstonteencounselor.com
Kelly, welcome and thank you for replying to Kristene’s inquiry! I completely forgot about it by the time I learned about and then blogged about how to obtain your NPI and your CAQH! Thank you for your kindness!
I hope you’ll be back often to chat here!
Hey, Kelly . . . I just noticed that you don’t have a little picture of you next to your comments. You’re missing an opportunity to help people remember who you are. If you want to have a little picture of you show up in your comments, you can find out how right here. It’s really simple – I promise!
Hi Tamara, as a new practitioner, I too struggle with the issue of setting fees. I’m looking forward to hearing about reduces fees and sliding scale fees.
Love the website and all the information!
Many thanks.
Dianne
Thanks, Dianne, for checking back in. If you can tell me what you are struggling with concerning the issue of setting fees, perhaps I can help!
I charge on a sliding scale based on income. I rely on an honesty system where no proof of income is required. I’ve found that people are honest and that the fees from my higher income clients compensate for the reduced fees paid by my lower income clients.
Hi, Paul! Thanks for dropping in and sharing your comments here! So you don’t ask for any “proof” of income and that seems to work well for you. How do you decide where people fall on your sliding scale? Do you have some type of formal matrix or how does that work for you?
Hello,
I was a little confused on the above comment. I charge $115 and ins. companies usually allow between $53-$65. I charge my cash paying clients $65. Is that appropriate? I didn’t think it was fair to charge out of pocket clients $115 and the insurance company doesn’t pay $115.
Hi, Brenda! It’s good to hear from you and I’m glad you dropped back in to ask for clarification. No, if I am understanding your situation, what you are doing is illegal. A mental health professional cannot charge cash paying clients one fee and insurance-paying clients a different fee. You need to rectify this immediately by charging both these groups the same fee for the same service.
If $115 is the usual and customary fee in your area, then you should charge that for everyone. And, if you have contracted with managed care for a discounted rate for reimbursement, then you know you will only get paid a fraction of that UCR. But that doesn’t mean you charge less; it just means that you have agreed to accept less.
In fact, I want to suggest that you contact a mental health attorney in your state to ask you how to best go about correcting this practice so that you don’t get into trouble with the insurance companies or your clients down the road. Paying for 15 minutes of good advice over the phone is a good investment in your own risk management. If you do speak with an attorney, I hope you’ll drop back in here to tell us what you learn and which attorney you used.
Hi, Tamara. I realize this is an old thread and this may not be the most appropriate place to ask this question, but it seems to be the best I can do at the moment, especially as I am feeling overwhelmed by fee-setting and insurance. You have probably already addressed this somehow, but I’m not good at thinking in numbers and I don’t quite understand how it all works!
I am building my private practice and I have chosen not to contract with any insurance companies. So far, I have been cash-only and have not had anyone who wants to use out-of-network benefits, but this may change soon. I am confused about fee-setting in this instance. Many people–my own therapist included–have told me that the way to proceed is to charge a lower fee to patients (based on what they can afford, of course) until they meet their deductible, then raise it to the full fee once their benefits kick in. Then, for example and hypothetically, I would charge them $100 per session until they meet their $1,000 deductible, and then when their 30% OON reimbursement (or whatever it is) kicks in I would charge them my full fee of $150, knowing they will be getting the balance back from their company. My own therapist and others have assured me that the insurance companies even like it when you lower your fees until patients have met the deductible–that it makes it more affordable for patients accessing the treatment they need.
Am I conveying any of this clearly? It is just so confusing to me. So far I have found it best just to determine sliding-scale fees with patients based on what they can pay, but the insurance question just confuses the life out of me. But of course when people have out-of-network benefits, they understandably want to use them!
On another topic, choosing not to be in-network with any insurance companies, I am also choosing not to file for out-of-network benefits for patients myself, or be in touch with the companies at all. I will provide patients with receipts, but that’s it. I figure if people want to access their benefits, they should be willing to make that effort themselves.
Thanks so much for any help you can provide, and for your work on this site.
equillibrist, welcome back! I’m happy to weigh in on this and don’t mind at all that it’s an older thread on this blog! We have new people joining us and reading / chatting on older posts all the time. And, this topic, in particular, is really important. It is my understanding that the practice that your therapist and others are suggesting is called “insurance fraud.” Charging different clients different rates based on their insurance benefits OR charging an individual client different rates based on his or her changes in insurance benefits is considered to be unethical and illegal. Wikipedia states that “The chief motive in all insurance crimes is financial profit.”
Your comments about it all being “so confusing” makes perfect sense to me! If I was trying to keep up with different fee schedules for each client, I would be a bit confused, too! So, equillibrist, here’s a few questions that you may want to answer for yourself: Is the phone ringing as often as you want it to with potential new clients? If not, why not? Do people even know your practice exists? If not, why not – and how do you change that? If the answer is yes, then why do they know about you and yet not call? Or, if the phone is ringing but you aren’t booking the initial appointments, why not? This type of analysis is what every therapist needs to do to figure out where to focus on building her practice initially.
And, on a different note, I have one more question for you. I’m curious, what’s up with “equillibrist?” Why the alias rather than using your real name? I’ve debated about initiating a commenting policy here and requiring real names but I haven’t done that yet. I’m wondering if you might have something to contribute to my decision-making on this subject. Care to share?
Hi, Tamara. Thanks for your insights and information. I was afraid you would say it was insurance fraud–that was my hunch. It just seems to be the prevailing practice among almost every therapist I know, and when I’ve told colleagues/supervisors as much (and about reading about it here), they’ve generally told me that I’m being overly cautious, I’m worrying too much, this is standard practice, etc. I generally have a somewhat meticulous and obsessional bent, so I think people just feel they need to reassure me that I shouldn’t worry about such matters. The thing that confuses me most is that, as I’ve said, my own therapist says she has been in touch with insurance companies about this type of fee-setting and this is what she has been told/encouraged to do (i.e., set an initial fee lower until the deductible is met, then raise it).
Re sliding scale, I have read some of your posts about this and understand that it is not something you recommend. It does seem to work for me, however. I like to have a mix of clients in my practice who can afford to pay more and some who can’t–I don’t feel I undervalue myself, as I’ve figured out a bottom line lowest fee below which I will not go (with the exception of a couple of patients whom I had seen previously in a clinic setting who were very low-fee and came back to me years later–I believe it’s important to continue to be available to them, since I have a longstanding history with some). I do some marketing/advertising, but my main source of referrals thus far has been colleagues. I feel completely satisfied right now with the rate at which I’m adding new clients–I’m part-time at the moment, and don’t like adding too many people all at once, just so that I have enough personal “mental space” to engage with each new client who comes my way. I asked the insurance question more because I want to be able to know how to deal with it when it comes up.
Re the alias, I hadn’t noticed that most people comment here under their real names? I generally use an alias when commenting anywhere online. I admit I am skittish about using real names on the web–I have done so a couple of times and the comments have shown up in web searches, something I do not like. Especially as a therapist, I like to maintain as much privacy as possible. I know that clients often do web searches on therapists or potential therapists, and I would like to limit my appearances in search results, whether my comment is in either a professional or a personal capacity (except, obviously, for professional marketing results, personal website, etc.). I’m not sure why you would want to require real names, as long as you have access to the person’s email address and can moderate the comments. Is there a reason why you prefer real names?(I am happy to use just a first name, as many seem to do here, I just wouldn’t want to use my full name.)
Thanks again for your time and help.
Welcome back, equillibrist! I, too have sought out the counsel of trusted colleagues and most of the time they have been spot on. However, on the rare occasion that that has not been the case, relying on that wrong information has been costly – and it’s not my colleagues who pay the price. It’s entirely possible that the laws and code of ethics that you practice under may differ from my own; or it’s entirely possible that it’s a gray area of the law / codes. I would encourage you to get a definitive answer from your state licensing board (if you are licensed) and also from a mental health attorney in your state or from your liability insurance company – and keep a copy of those answers in writing stored somewhere. Sometimes good intentions on your part and the part of your colleagues isn’t enough to protect you from losing your right to practice. (And, if you do check with your licensing board and a mental health attorney / liability insurance company, I would welcome you dropping back in to share what you learn.)
Rather than not recommending a sliding scale, I would say that I urge therapists to consider their motivation (including whether or not they can actually afford to give services away) and the way they choose to implement a sliding scale. You sound like you have made really sound and thoughtful choices around this issue. Glad that’s working well for you! You can’t get a higher compliment that to build your practice on collegial referrals and word of mouth!
I so appreciate you sharing your thoughts about using an alias when commenting. It’s interesting, isn’t it – this whole boundaries thing with clients? Most professional sites and professional email discussion lists actually require you to use your professional name. Many even require you to identify your affiliation with an employer or that you are in private practice. You are right – it will definitely increase your visibility online. Many therapists find that boost with the search engines to be a positive consequence. In fact, from a marketing perspective, it’s one of the main reasons therapists might want to be active in commenting on other websites. I’m still mulling this over and I know I need to put up a post or two about commenting, in general. We’ll be talking a little bit about this is BlogStart for Therapists next month and then talking about it in much more depth after the beginning of the year when I start my advanced blogging series – From Blah to BAM! Brawny Blogging for Hungry Therapists Who Want to Get Known! Stay tuned – I think you’ll see that there are many reasons why you might want other therapists, potential referral sources and clients, too, to be aware of who you are and what you are thinking online and around your community, too!
Thanks so much for weighing in here on the subject of fees and on boundaries / identities online, too! I appreciate a wide range of opinions and experiences here that stretch my own thoughts and practices. You are always welcome here!
Just wanted to chime in and say thanks to both of your for your discussion here – very helpful to me as I start a part-time private practice and begin marketing. I, too, am struggling with fee setting, whether to accept insurance and related issues – and I have had some concerns about using my real name on the web as well. (My resolution has been to use my real name but to minimize or eliminate personal details that might seem unprofessional if shared with clients.)
I’m looking forward to your BlogStart for Therapists, Tamara! Though I have a lot of ideas for blog posts, I have yet to find the courage to actually put them out there for the world to see.
Hi, Camille! So what’s tripping you up with the decision about whether or not to work directly with insurance? Care to chat?
I started out with the same ambivalence about using my real name on the web, too, Camille. You’ve resolved that in exactly the same way I have – by staying oh-so-clear that my public personae is just that – public. And, truthfully, those of us who were around and trained in mental health before the advent of the internet have had particular struggles with this. We are having to adjust to the transparency that is expected and even required by most of our clients today. The internet was / is a game changer for us, for sure! These days, before I hit “send” or “publish” or “like” or whatever, I always have to consider “How will this affect my clients when they see this?” because, of course, they do!
I’m so excited to have you in BlogStart for Therapists, Camille! I haven’t even started really publicizing my October class and already people are signing up for it! Do yourself a favor and get at least one or two blog posts written and posted before the class begins. That way, you won’t be struggling with the mechanics of blogging when we start the class and you’ll benefit more from the material we are going to cover. I’m thinking about opening up a private Facebook page for us so that we will have a place to continue the conversations that we start in the class. What do you think of that idea?
I am sorry I have read your posting because needed some clarity too.
Dear friend, nobody should make you feel guilty for hiding your name . It is your right to either show it or hide it. Nobody should assume that the person should simply trust them just because they are blogging on the net. We are taking our precautions because there is a lot of fraud out there and we simply never know who we talk to. Sorry for intervening but I thought to tell you that 🙂 I hope this will be posted.
Hi, Maya!
I’m happy to share your opinion here and to continue the conversation! Thank you for joining in!
However, we may just have to agree to disagree.
Showing up in a professional community and using a name other than your own (whether it is here online or face-to-face in a conference or a board meeting or in the office with a client), is considered unprofessional at best and may even be considered unethical and / or illegal in certain circumstances.
I do understand your point about the risk of fraud and never knowing who you are talking to when online.
But, I would also note that our job as mental health professionals is to do the best we can to protect our clients and to protect ourselves; it is not to do it perfectly.
How do you go about accepting copays? Is this deducted from your set fee when you submit an insurance claim? For example, if my fee is $125 and the client has a $20 copay, do i submit for only$105 to the insurance company?
Hi, Monet! Thank you so much for asking this!
The way copays work is this: You collect the copay at each visit.
You (or the client) submits your FULL FEE to the insurance company.
And, the insurance company will reimburse you for contracted amount – in this case $105.
But, the important part is to always bill for your entire regular and customary fee.
(And, don’t forget to ask for raises every 6 months or so.)
I hope that helps and that you will be back often to chat!
Hello,
I commented early, however, it seems to have gotten lost. Is there a law against offering a discounted self-pay rate? This is common in many large hospital systems. As long as it is clearly spelled out and offered as an option to every single client, why is offering a discounted self-pay rate illegal?
Hi, Katy! I am not an attorney so I would encourage you to consult with your attorney for a legal position. Based on my training and research over thirty years in the field, what I can say is that it is considered professionally unethical to treat clients differently i.e. choosing to afford some easier / cheaper access to our services and to penalize / charge others a higher fee. I cannot speak to the way that large hospital systems operate.
Thank you though for taking time to ask the question. I appreciate your voice here in Private Practice from the Inside Out.
I will be starting a postdoc position at a group psychology practice. I will be meeting with my future supervisor soon to finalize the details of my contract, which will last for one year. What contract negotiation information can you offer me? I know that I want to highlight my neuropsychological testing experience. I’m currently completing my pre-doctoral internship. Thanks.
My question is this I have a Provisional Licence Clinical Social Work this allow me to see clients, my problem is i am having difficult getting clients despite the fact that my rate is very low compare to the other therapist so i am having second thoughts about during this private practice . despite the fact that this is what I would love to do. any suggestion .
Hi, Yolanda! Welcome to Private Practice from the Inside Out! You bring up a couple of thoughts for me . . . . One is too long to write here so I really need to write up a blog post on it concerning websites. But the other thought that occurs to me is that setting your fees too low can be just as off-putting to potential clients as setting your fees too high. So, the first thing to consider is . . . How did you decide what fee to charge? Trying to undercut the other therapist may just be making her appear to “The Good Therapist” and setting you up to be “Second Best Therapist.” I’m sure that’s not what you were trying to do but that is often the result of charging too little.
It’s also important to recognize that you may not be getting clients for other reasons . . . . Here’s some questions for you to consider before you even start adjusting your fees. Are potential clients actually finding you? If so, how? Once they find you, are they getting the information that they want? Are they booking appointments? Are they showing up for their appointments? Are they returning for follow up appointments?
See what I’m doing here, Yolanda? I’m following the path of your typical client. It’s critical that we identify where you are losing them – assuming they found you in the beginning. Once you know where you are losing them, it’s relatively simple to fix that “leak” and get those clients in the office. Most social workers didn’t get the business training they need to build a strong private practice. Let me know if you need additional information but, whatever you do, don’t throw in the towel too soon.
And, stay tuned for more info that may help you with your website, too!
Great Website. I have a question about this topic of different fees for different clients (ie insurance vs cash paying clients). Wouldn’t use of a sliding scale then be considered illegal if you are billing insurance one amount but reducing the fee for other cash paying clients?
Thanks, Linda, for dropping in to chat!
I’m not an attorney so I am not willing to provide legal advice. Having said that, I can say that what I have been told year after year is that it is unethical and it is illegal to charge clients without insurance one fee and to charge clients with insurance a different fee. I believe it is appropriate to have a written policy on fees that may afford a price break for those clients in financial need. The trick is to define “financial need” and “ability to pay” uniformly across all clients – whether they are paying with insurance or not. To do otherwise, is likely to fall under the category of “insurance fraud.”
I have been a contracted insurance provider for 10 years. One of my biggest insurance providers just reduced my reimbursement rates (again). I want to transition to private pay only because I am tired of insurance companies continually de-valuing my services. Do I have to drop from all the insurance panels so that I can charge clients privately who want to continue seeing me even though they have insurance?
Oh, Renee! I’m so very sorry that this is happening . . . to you and to a lot of other therapists, too. No, you do not have to resign from all insurance panels before you start accepting cash payments from some of your clients. However, cannot accept cash payments from your clients when you are currently under contract with their insurance companies and have agreed to do otherwise. Here’s a few things you need to consider . . . .
Most insurance companies require you to terminate your contract with them in writing. Some require as much as 6 months notice in writing. It is critical that you read the fine print in your contracts and abide by them. They will stipulate how you go about terminating your professional relationship with them. Should you wish to do otherwise, you will need to seek the advice of an attorney.
Many therapists who have been insurance-dependent for a while find it easiest to wean themselves off insurance money slowly. I suggest that you begin to terminate contracts based on their reimbursement rates – starting with the lowest and filling those time slots with cash-paying clients. As your income mix stabilizes, you can then terminate with additional companies.
If you have been relying on insurance companies for a significant amount of referrals, you may need to change the way that you market your practice. Hopefully, you are finding lots of info right here to help you attract new cash-paying clients. However, there are also other websites – both therapist and non-therapist focused sites – that can help you grow a strong and vibrant, insurance-free private practice.
If there is anything I can do, Renee, to support you in that transition, I hope you’ll let me know! Leaving managed care behind was the best and most important decision I have made to grow my private practice and build my confidence as a provider! Best wishes to you on your journey!
I don’t think it is illegal to have a sliding fee scale for those who do not have insurance. The fee scale is based on need and inability to pay for counseling services. If this same client had insurance, he would not have the same inability to pay, because his insurance company would be paying FOR him. So, while I may charge $75 for my standard fee, I may have a sliding scale fee for those who cannot afford this fee without insurance. Isn’t that correct?
I wrote this section (about sliding fee) right into my professional disclosure statement that I sent in for licensing requirements and I was not asked to correct it.
Hi, Karla! I’m so glad you are asking for clarification. If you are going to use a sliding scale fee – and I recommend that you accomodate clients in a different way – then what’s important to remember is that you need a written protocol for applying it accross your entire client load. While it may not be illegal to use a sliding fee scale, it is unethical to apply it in an inconsistent manner. For example, if you have two clients who have a family income of $35,000; they both have ten children. All other circumstances related to finances as far as you can tell are equal except that one has health insurance benefits. Then, my understanding is that it is both illegal i.e. insurance fraud and unethical to offer a reduced fee to the one without insurance benefits.
In other words, what I am saying is that it may be perfectly legal to apply a sliding scale fee in a uniform and methodical manner to all your clients based on need. However, you cannot apply such scale only to those not having insurance or only to pregnant women or some other subset of your clientele.
I am not an attorney so I would encourage you to speak with one in your jurisdiction to get clear about the legal ramifications of your current practice. However, I can speak to the ethical side of this practice and know that it’s critical to have a written policy in place that spells out who, when, where, and how you intend to offer a reduced fee to your clients. I wrote a post earlier this year on How to Create and Use a Sliding Fee Scale.
Tamara, I am a 58 yr. old recent grad with a Psy.D in clinical psychology from schooling online. I live on the big island of Hawaii and have been caring for my ailing parents here. I cannot leave, for I am much needed. I have been seeking employment in the mental health field. I need at least a years worth of employment for any license at all. My program is not approved by the APA, so it is hard to get a license anywhere. Only a few states, and Hawaii is not one of them. I don’t tell anyone this, that I am applying to, but still not even a reply back. It is very hard here, and mostly Social Workers do the work here, for private companies. What should I do
Hi, David! Welcome to Private Practice from the Inside Out! Congrats to you on getting your doctorate! That’s a huge accomplishment. And, how generous of you to make the choice to stay nearby to care for your ailing parents. That choice most likely reflects some of your own values.
Those who complete a doctoral program comprise less than 1% of the population in the United States so first of all . . . recognize that you are one of the educated elite in this country. And, yet I can only imagine that the job market in Hawaii is particularly challenging. I would hope that you school would be supportive of their alumni and assist them in securing job placements. However, I have heard from quite a few folks in our community that online schools have been particularly remiss in providing this support.
If this is your situation, then you have at least a few of options.
(1) If at all possible, I would encourage you to seek out the services of a licensed professional career counselor. The National Career Development Association is a great place to start.
(2) Networking online can prove invaluable for anyone seeking a job or needing to reinvent their career path. LinkedIn can help you in building a network of colleagues as well as a great source of information and inspiration for leveraging your skills. (Just be careful not to get sucked in and weighed down by negative, whining, woe-is-me discussions that may also show up there.)
And, more traditional online venues such as online discussion lists (both location-specific and national / international) can also help you in gleaning new information, perspectives and allies to support you. I’m partial to CESNET-L and COUNSGRADS for these purposes.
(3) And, finally, if all else fails, you may need to re-imagine what it is you would like to do with your life. Strong clinical skills are applicable across a vast number of fields. While you may have envisioned yourself working in a traditional psych setting, it may be that you choose to go into an allied field where you skills can be more easily used – either temporarily while still pursuing that license or longer term instead of that more traditional trajectory. That might mean looking into education or an allied health profession, business, or even coaching.
I know that these are most likely not “the answer” that you were looking for, David. It’s frustrating to have spent to much of your time and energy and resources moving in one direction and now seeing that you may indeed have to back up a bit and regroup. It’s not fair. It’s frustrating. And, it’s likely to be scary, too.
However, what you need to remember is that surviving in a private practice these days isn’t going to happen by taking the common perspective of everyone else anyway . . . . It’s about being able to think differently than everyone else. You’ve hit a bump in the road for sure! But, sometimes gifts really do come in ugly packages and this may be your opportunity to reinvent and re-imagine David with a Psy.D. It just might be your gold mine in disguise.
If you would like to hire me for a 1:1 consult, just drop me a note back channel and I’ll be happy to chat with you more. Perhaps we can brainstorm and I can help you regroup. Or, check out some of the above . . . . Either way, I’m glad you are chatting with us today and wishing you much success on your journey!
When you say illegal, do you mean illegal in a particular state or illegal on the Federal level? Can you please cite the law so I can refer to it when I seek legal counsel.
Camille, it is my understanding that while the legal definition of fraud may vary from jurisdiction to jurisdiction, it is generally considered to be a crime of fraud whenever a professional intentionally deceives an individual or organization for the purpose of personal gain or intent to do harm to another.
Legal statutes change over time – both in content and citation – so your attorney can provide that information to you. Without additional research, I cannot cite the specific law that is currently applicable to you in your particular jurisdiction.
I’m glad you intend to seek legal counsel! Please remember . . . I am not an attorney and cannot provide any legal advice:).
I usually change my fees every two years in order to keep up with the UCR in my area. If my fee changes while I currently have clients in treatment with me, is it okay to keep them at the current rate and charge new clients the new rate? Or do I have to change to the new rate for current clients as well? Thanks for your feedback.
Hi, Erika! I have historically allowed my current clients to stay with my old rate, too, when I implement a new few structure. However, I run a fee-for-service practice. Before you choose to do this, make sure that you are not violating any contracts that you may have entered into (for instance, with managed care companies) or laws that may apply in your jurisdiction. If you have any doubts about this practice, I would encourage you to consult with a mental health attorney.
Thanks!
My rates are 95.00 but if I have a contract with the insurance company I am paid my contracted rate with the insurance company, I do give discounts on a case by case basis, but I find it difficult to know how to be fair. I did. It more in the beginning when I was trying to get busy and not as much now. I’d be interested to know how others determine this.
So, Jill, my understanding of “fair” is that the same standards / benefits are applied equally to all clients . . . and that all clients have an opportunity for those price breaks.That means that you can’t just feel sorry for a particular client and treat him differently; instead, you would want to assess everyone’s assets in the same way – either taking their word for their income or asking for W-2 forms from everyone or getting 30 days worth of paycheck stubs, etc. – and then also assessing their debt and dependents – again by taking their word for it, seeing a copy of their income tax return, etc. What would not be acceptable from a “fairness” perspective would be simply believing some hard luck stories and not believing others.
Hi Tamara,
So I have a question about being fair in offering a reduced rate. If I offer parents whose children attend a particular kind of school (say, Montessori schools) a reduced rate, is that okay – so long as I am not getting any kind of kickback and I offer it to any parent whose child attends any Montessori program? Is that considered a “fair and equitable rationale” for a reduced fee? And, I am assuming that this same standard of fairness applies to coaching fees as well as counseling fees, since this is an ethical issue rather than an insurance issue. (At present, all my clients are private pay.) Thanks for sharing your insights!
Hmmm. Camille, that’s a really interesting question! Before I weigh in on this, I’m wondering if you might explain your thinking about offer a discounted fee to those who attend a Montessori school? Do you prefer working with those kids? Think they, in particular, need a price break? Something else?
Hi Tamara,
Funny, somehow I knew you were going to ask me about that! I’m happy to share my thinking…it’s just a bit long.
In addition to being a licensed professional counselor, I am also a certified Montessori teacher and I really believe in the Montessori philosophy and holistic approach to education. Kids typically start in Montessori by age 3 or 4, well before most learning differences or behavioral concerns are identified. When these issues do arise and parents are advised to seek outside help for their child, the professionals they consult often don’t understand the Montessori approach. I want to be a bridge for these professionals and a first stop for parents on their way to seeking assistance. I can help parents understand and make sense of psycho-ed evaluations/labels/diagnoses, etc. in the context of their child’s Montessori experiences, and hopefully help them make better informed decisions regarding their child’s therapeutic care and educational options. Although almost all of the Montessori schools in this area are private, most families who send their children to a Montessori school are not in the super-high income bracket of families who send kids to elite private schools. Montessori families often struggle – mightily – to send their kids to a Montessori school. Typically they intend only to send their child for one or two years of “preschool” then move them into public school. Once they experience Montessori, though, they’re hooked (assuming they’re at a good school) and are faced with the daunting challenge of finding a way to pay for a private school education that they never intended to provide (which, if they’re really lucky, will last all the way through middle school!). So, my intention in offering a lower rate for Montessori families is to reduce the burden of accessing professional help in the hopes that their children will be able to benefit from a Montessori environment for as long as possible (assuming, of course, that’s what the family decides is in their child’s best interests. While I say I am an advocate of Montessori education, what I really am is an advocate of each child getting his or her needs met in the best way possible.)
In addition to helping parents who have concerns about their children’s behavior or development, I also want to help parents better understand and embrace the positive, respectful, non-punitive approach to working with children that is the bedrock of the Montessori approach. (The more parents understand and embrace this philosophy, the greater the likelihood they will keep their kids enrolled and benefitting from this approach both at home and at school!) I do this by offering parent education programs and individualized parent coaching (again, at a reduced rate for Montessori families, though one with which I am comfortable and which meets my financial needs).
I guess my rationale for offering Montessori families a reduced rate is because I really want to work with them! So, my question is whether such a rationale is considered ethical. (I also want to say that while I may sound like an over-the-top Montessori enthusiast, I’m really an advocate of contexts that support every child’s optimal development. Sometimes this is Montessori, sometimes it’s not.)
Camille! Thank you for sharing such a well-thought out rationale for (1) meeting the needs of your clients and (2) marketing your practice! This is exactly what every private practitioner should be doing. I do not find your proposal to offer reduced rates to all Montessori families – just make sure that you define who those families are. For example,do Montessori families include siblings who do not attend Montessori schools? What about children who start in Montessori schools but then transfer out? Do parents who attended Montessori as children also get those discounts?
It’s also worth noting that a different therapist might offer a reduced fee to a particular employer or profession or membership group. The important thing to remember is to apply your opportunities for reduced fees uniformly across your practice. By clearly defining the parameters of your offerings, you are better able to do just that. Camille, thank you for sharing your well-thought out plan. It provides a great model for the rest of us to follow!
Blessings to you on your journey!
I understand how a sliding scale is illegal. I do not see how it is ethical.
Denying a therapist the right to set his or her own fees protects insurance companies alone, not consumers or providers. Simply put, making a sliding scale illegal protects a multibillion dollar industry at the expense of individuals who cannot afford to get the care they need. It’s also a double standard, as insurance companies do not offer services at a flat rate from person to person.
If they insist that free market forces drive healthcare (a rediculous idea that can only fly in the U.S.), then they cannot have it both ways. If I sell bikes, I can sell a bike for whatever fee whenever I want, right? Why can private insurance companies call themselves for-profit, privatized companies, and effectively argue that anything other than free market forces reign? Currently, private insurance companies feel that they can regulate everyone’s fees and still provide such inept services that no one wants to use them.
Furthermore, insurance companies SHOULD pay higher rates given how much extra work it takes to work with them. Today, I waited on the phone for 15 minutes to get a person on the phone, only to be transferred to someone else and wait another 15 minutes. This is the third time I called this same company about the same issue, and the third different answer I’ve received. Shouldn’t I get paid more for this client, given how much extra time I’ve spent? A lawyer sure as all get out would get paid.
Hi, Matt! I love a passionate response and yours certainly is that! And, you got the gist of this post setting different fees for different clients in similar circumstances is NOT ethical or legal.
I’ve never heard anyone advocate for insurance companies to pay higher rates due to a provider’s additional efforts and time required to process the claims. It’s an interesting take on a costly and aggravating aspect of this effort. As for those three different answers within one company . . . my solution is to ask all questions in writing and get all answers in writing. This, too, requires additional time that results in additional costs to the provider; however, once you get the answer in writing, it’s easy to prove that you were in compliance.
As for you comment about lawyers always collecting their fees . . . . One thing for you to consider is that some mental health professionals always collect their fees, too. That’s not how I started out 20+ years ago; however, I’m trainable (and I’ll bet you are, too). I learned over time to make different (better?) choices that insure that my counseling clients pay me the fee that we initially agree upon and I provide the services that we initially agree upon.
I’m happy to work with you and others if you need help trying to get untangled from being managed care dependent. It’s the most freeing choice I’ve made in private practice!
I know this article is a few years old, but hopefully, you’re still checking here! I take insurance & private pay for clients at my local practice but wondering how this applies if I also see clients online separately. Basically, I do nutrition counseling locally but also have phone clients that are private pay and buy packages. I’m curious if the separate phone counseling (which isn’t medical nutrition therapy – just nutrition coaching) would be different because the packages I sell aren’t based on insurance reimbursement rates?
Hi, Lauren! Yep I do keep all of the old posts open because we continue to get therapists who are new to Private Practice from the Inside Out all the time. And, they, like you, continue to make new points, share new information, and ask great questions. Welcome to Private Practice from the Inside Out!
I’m glad you asked for clarification about this. I’m not sure what you meant by setting fees “based on insurance reimbursement rates.”
While you are not allowed to set different fees for different clients in an unfair manner, you certainly can set different fees for different services. Distance counseling is a different service than face-to-face counseling so you can set up different fees. Coaching is different than counseling, in general, and thus allows for a different fee structure. What you cannot do is charge different rates for the same service based solely or even primarily on different (or no) rates for insurance reimbursement.
Let me know if that doesn’t make sense to you. (It’s a mistake that many therapists make and it can cost them their ability to practice.) Lauren, I hope you’ll drop back in often to chat, learn from others, and share what you know, too, as we grow stronger and healthy private practices!
Thank you! That definitely makes sense that they are different services, so different fees.
except that insurance companies all pay at different rates, and then the eap companies decide what they’re going to pay. so how do you decide? If you go for the lowest you can’t stay in business, but what you’re saying is that the insurance companies will all break out in hives if they find out that they’re paying more than someone else is. the solution then is to go completely off insurance, charge what you want, and then if you’re out of network you can charge whatever you want. is that how they want to work it?
Hi, Monica! Nope. That’s not what I’m saying at all. Your fee should not be contingent upon what an insurance company is willing to pay. Your fee is what you value your service to be worth – not what the insurance company (or for that matter not what you client) chooses to reimburse you for.
Does that make sense to you?
I currently participate in one insurance panel (in network for BCBS). I am using a billing company to handle many of my administrative issues. My fee for one hour is $160, however BCBS fee schedule is $127.
My billing company is submitting on the claim form my fee as being $127(the fee schedule amount). Is it a better practice to submit my fee and then allow the insurance company to make the adjustments on the EOB?
Thanks
Hi, DRK! Welcome to Private Practice from the Inside Out! I’m so glad you are asking this question!
Your billing company is scaring me if they don’t already know the proper way to bill for your services. It makes me wonder if there are other things including rules and laws that may cost you money or get you in trouble without your knowledge. Might I suggest that you consider the possibility of changing to another billing professional?
And, based on what you are stating here, they do not know the proper way to bill for your services. They should always be submitting your bill for the full fee you charge. When payments are received, they should also be noting that they received the contracted amount (rather than your full fee).
I’m in a bit of a situation and having a hard time finding an answer to my question. I have been offering 2 reduced fee or pro-bono slots in my client load of distance counseling clients for about a year now. I don’t offer this for in person clients. As I think about it now I believe I began doing this because I was getting calls from clients who wanted to work with a counselor through video or phone, but their insurance company would not reimburse for this service. I was thinking it was different because I am providing them a specialized service. This week it hit me that I might be illegal in this practice. Am I correct? Can anyone shed any light on this for me?
Hi, April! It’s great to have you back here again! It is my opinion that as long as all of your distance counseling clients are being offered the same opportunity to qualify for this service, then you are not doing anything illegal BUT you should not take my opinion as the final position on this because I am not an attorney. I don’t remember where you are and the laws will differ in different jurisdictions. Your liability insurance often offers you up to an hour of free consultation with an attorney each year. Pick up the phone and call your liability insurance company to inquire about this OR call your national professional association (who also typically offers free risk management advice). That way, you can make informed choices about your pro-bono offer.
Thank you Tamara! I’m still a bit confused… I’ll consult my insurance but maybe some examples would help shed some light.
Here’s my current situation:
1. I am offering phone sessions at a 50% rate to a client who has BCBS of Illinois (I am not a provider for BCBS Illinois). She has been my client since last November. At one point she was using her EAP which reimbursed about 30% of my fee, but now she’s back to private pay.
2. I am offering video sessions to a client at a 25% rate, who I’ve now seen twice and seen his partner for a consultation. They would both like to work with me as a couple. The man has been out of work and is on Medicare. I am a Medicare provider, but Wisconsin Medicare only reimburses for “telemedicine” if provided by PhD provider. His partner has Golden Rule United Health Care. I am not a provider for United, but even if I was I’m not sure if they reimburse for distance therapy.
I moved to Wisconsin from Louisiana where it is written in the law that distance technology services must be reimbursed the same as in office services. BCBS of Louisiana is super easy to work with on this… I feel the effects now of how spoiled I was by this.
Hey, April, I can see why you might have questions about these situations two situations but . . . I’m not sure what your questions actually are. I appreciate the scenarios but can you please elaborate on your questions for each?
April, the world changes and not always for the better. Because my doctorate program was not approved by the APA in which i am a member as a Pychologist, i am unable to be licensed in most all states. I have lived all over the USA and can legally practice and open my own practice in the state of Vermont. I pay $200.00 a year for a mailing address until i move there.
Employment is hard to find there as where i am right now. I have changed things because of the legality of things in this country. My website is now for mostly the state of Vermont. i have advertised in places where I live now/FL. and recently had a gentleman who was thinking about therapy and ended up telling me I was illegal and he was going to report me! you never know what is going to happen in this world and so many people have emotional issues.
The world sometimes works in oppositions and we just have to go with the flow of things sometimes. I found out so much about education in this country and so much more! it is not a good thing usually.
Good luck and you can offer services in counseling, etc. under religious laws in most states in case you were wondering. But to practice is another thing. I don’t have all the answers and i do know that I will keep trying to help people no matter what.
David, welcome to Private Practice from the Inside Out!
I’m so sorry your journey has been so difficult. But, I am also grateful that you are taking the time to share a piece of your journey here so that others can learn from your trials.
I know you are wanting to help people . . . but I doubt you thought your helping would show up exactly like this. Your experience is a valuable reminder to those just starting in the field to research who / where / when / how one can practice independently as a mental health practitioner. And, it’s a reminder to continue to research those things throughout your education and licensing process. Those things can and do change over time, from discipline to discipline, vary across geographic locations, and actual practices. (For example, Licensed Professional Counselors in Texas are prohibited from certain practices that in another state are considered perfectly legal.)
Until we gain full reciprocity for each of the mental health disciplines across all 50 states, this will continue to be an issue.
I have researched them and found Vermont to be the best in that manner. I do know that many of the northeast states are more liberal than others. I am in Florida now, was in Hawaii. I seem to pick the worst of the worst. lol…I feel i will eventually move to Vermont where I can legally practice. thanks for talking..be well…David
David, based on your website, it looks like you are already in Vermont. Is that incorrect?
No, I am in Florida. my 2 children reside here and i became a grandfather for the first time. Florida is a right to work state, much like Texas and it is a licensed and certification state to make money for the state, not really for the good of the public at all. I know of a Psychologist who is licensed in Az and in OR. and came here to get licensed and the state of Fl. did a background check of over 30 years and found something in his past and said he could never be licensed in Fl. 80% of the therapist in Tampa Bay seem to be females and 90% of the therapist all went to school in FL. Not to sound paranoid, but i observe well and have lived all over the USA, including Hawaii. I pay $200.00 a year for a mailing address and a P.O.Box. Just so i can keep my non-license in Vt. and pay $100.00 a year to keep it. I will eventually move to Vermont, but I have been caring for my elderly parents and been out of work for quite a few years and had to start my own handyman service just to be able to survive. Its tough out there and with all the emotionally challenged people in America alone, you would think I would be put to good use! I went to school as high as one can go and yet employment is just a number and as long as the banks and institutions get their money, who really cares about the people as much as therapist, counselors, nurses, doctors, etc.
Now I understand, David! So your website is really just a holding space until you get back to Vermont?
more or less. yet it will be a few years until i am able to move there. maybe 2. I get newsletters form the psychology board/department of the state of fl. I am actually a non paying member.. The recent newsletter claims that Florida is very strong on taking government laws forced, even with psychology. The APA has a strong hold here. I feel Vermont is one of the last free states we have. I do feel it is possible, if we were lucky enough to have the states, almost like countries in the EU. Otherwise there will be a monopoly in so many items and we will be so controlled with all the new laws coming out. The Nurses and Doctors in Hawaii were all worried about the new Obama Health Plans, for they said many will suffer. And they think Obama is a somewhat God, because he was born and raised there, supposally.
Wow! Insurance sure is confusing! I would love to be able to build a fee-for-service practice but I am not finding that to be a viable option at this time. I am currently only paneled with one insurance company (awaiting approval from several others) and it sure is frustrating to have to constantly refer out individuals who contact me about counseling and then state that they can’t work with me because I don’t accept their insurance (I clearly state what insurance I accept on my website but I get a lot of calls via word-of-mouth referrals).
My question after reading through this thread is this: Say my current rate is $100.00 per hour but I become paneled with an insurance company that reimburses at a rate of $125.00 – does this mean that I have to raise my rate to $125.00 for everyone so that I am not charging different rates to different clients?
Hi, Meredith! Thanks for dropping in this afternoon to chat! What you’re asking is really interesting . . . and backwards in your thinking. In order to determine what your fees should be, you need to start with how much money you need to survive on – and not what you think your clients or the insurance companies will reimburse you for your professional services.
While I’ve never seen an insurance company reimburse at a rate even close to $125 / hour, that doesn’t mean you should / should not charge that rate. If your current rate is $100 / hour then that rate won’t change whether the insurance company is reimbursing at $60 / hour or $125 / hour.
And, by the way, I’ll have a telephone script available for you guys in the next couple of weeks that might help you turn around that initial call you are getting from clients. If you aren’t getting those phone calls converted into paying clients, then that’s where you should be focusing your attention.
Hello,
I have a question. I am a sex therapist and also a Licensed clinician. I am a fee for service provider. I was thinking of accepting insurance for mental health clients and remaining fee for service for sex therapy. Of course I would charge the same fee and understand that I would just be accepting a reduced fee from insurance carriers. Is it ok to accept insurance fro some but not all? Most of my sex therapy clients don’t have a diagnosis or are willing to report to an insurance company that they are seeking help from a sex therapist. Thanks.
Hi, Christina! I just noticed that you don’t have a little photo of you that shows up with your comments here (and on other blogs, too). They are called “gravatars.” Using a gravatar helps others get to know and trust you quicker.
Here’s a link to a quick tutorial that shows you how to set up your own gravatar http://www.allthingsprivatepractice.com/how-a-tiny-picture-of-you-can-help-drive-traffic-to-your-website-or-blog/ . (Don’t worry! It’s so easy that even I could do it and it’s absolutely FREE!)
Hi Tamara,
I’m just looking for clarification to make sure I really understand. What your saying is if we offer a sliding fee scale – this needs to be made available to all clients – even those with insurance. So if a client qualifies for a rate on the sliding fee scale, and their insurance will reimburse more, it is illegal to charge them what the insurance will reimburse – we must charge them the rate they qualify for on the sliding scale. Do I understand what you are saying? Thanks! Alyssa
Hi, Alyssa! Thanks so much for dropping in to chat! I’m sorry if I wasn’t clear about this. I’m not an attorney so for the legal end of your question, please do verify this with an attorney. However, my understanding is that it is extremely difficult to fairly and equitably use a sliding scale fee (which is why I work with clients in other ways when there are financial needs).
But, if and when you do decide to offer a sliding scale fee, you must apply it to all clients presenting with similar circumstances. So what that might look like is if you decide that people with a household income of $50,000 supporting 4 adults and 2 children qualifies for your reduced fee of $50 / hour, then regardless of how they choose to pay – our of their own pocket or by having a parent or sibling pay your fee or using some combination of insurance and self-pay – that cannot be factored in to qualifying (or not) for your reduced fee. Basically, how they choose to pay your fee should be irrelevant to whether or not they qualify based on need.
I hope that’s clearer for you now, Alyssa and that you’ll be back again soon to chat about all things private practice!
I am aware that I must have one fee that is set for both cash-pay and for insurance clients. However It was my understanding that once you become contracted an insurance company that you can not use a sliding scale . . . is this correct?
Hi, Stacey! That’s going to be entirely contingent upon the contract that you sign with each insurance company.
One of the responsibilities (that makes it so difficult for mental health professionals) for those who work directly with managed care is to know (and keep up with the ever-changing) contracts that you have said you are willing to work under.
I’m sorry that I can’t give you a definitive answer.
Hello,
I have some questions in regards to this too- let’s say I only accept one insurance company and my fee is 150.00- (I’m then reimbursed only $80). Let’s say a client comes to me and has Aetna (which I do not take), and needs a sliding scale in which I offer 80-90$ if they decide to not use their insurance. Is this ok? As I have some clients who do have insurance however do not wish to utilize their insurance or out of network benefits..would it be ok to offer them a sliding scale fee of 80-90$ per session and couples 125$…. or am I supposed to charge everyone 150 and make them use their out of network benefits if they have any?
I am a psychiatric NP with a private practice in Massachusetts. I am contracted with BCBS. I also have a license in New Hampshire. Can I open a private practice in New Hampshire and start a cash practice and continue with my Massachusetts practice billing BCBSMA? Do I have to be credentialed with Anthem BCBS on NH because I am in Massachusetts? Am I allowed to build a cash practice there?
Hi, Christina! Welcome to Private Practice from the Inside Out! I’m not quite sure if you are asking me if you can legally open a private practice as a cash-only business in New Hampshire OR if you are asking me if the managed care company that you are credentialed with will allow you to do so. If you can clarify which of these questions your are asking, I’ll do my best to answer it.
I really appreciate all this discussion! The legal aspects of rates and sliding scale, etc. is such a complex issue. I really want to practice both legally and ethically. I could use some pointers with what I suspect is a fairly uncommon dilemma:
Here goes: Recently, the company contracted to provide Medi-Cal mental health OP services in our county recently raised its reimbursement rates Substantially (from an already decent pay rate to 41% higher… I Know! It was quite a pleasant surprise!) BUT now has the potential to reimburse at a higher rate than my private pay fee. Before it was no problem as my cash rate was above any of the discounted contract rates. The new contracted rate is on par with what many licensed folks make around here but my cash fee is lower as I am still collecting the last of my hours towards licensure.
Dilemma:
I’m stuck with a couple uncomfortable courses of action (unless there is another way you can think of):
1. I raise my cash rate to match the highest contract rate and by extension raise the rates on anyone paying this cash rate. I don’t mind a pay raise (would be about 20%), but as an intern I’m not sure how many clients I would get at that fee. But who knows as I know undervaluing ourselves is not good either.
2. Do not change my cash rate and bill the Medi-Cal contracted insurer accordingly, leaving on the table the potential increase in revenue. Ouch.
Dilemma #2
I’m also in the weird situation that I work in a working class town but I am a stones throw away from a more affluent college town (from which I also get clients). I’m challenged in finding a fee and fee structure to meet lower/middle-income needs (and not scare those folks away) while not undercharging affluent individuals who could afford to pay more (doctors and other professionals). On the other hand, I could just consider my seeing Medi-Cal folks as doing my part to offer ‘accessible’ services and then not worry as much about having a higher cash rate that prices out the middle income folks (many of whom want to use insurance anyhow). With low reimbursement rates with most insurers (who btw Refuse to negotiate rates with my supervisor or anyone for that matter), I’m not keen to keep playing that game as much as I like the families I’ve worked with that are middle income.
You thoughts on these two dilemmas? First regarding legal/ethical practices of cash fee and contract rates and second about how to set a fee that meets needs in two very different socioeconomic markets?
Thanks so much!
[As an aside… RE: how I bill insurance as an Intern (this often comes up) – my supervisor has negotiated with most of the insurers to accept charges from interns of hers (we bill as the providing entity with our own NPI and the billing agent is my supervisor). I also attach a letter with each claim stating clearly the billing arrangement so there is no ambiguity. I charge my rate, not that of my supervisor. The claims get paid but the main hassle is submitting paper claims as electronic would muddy the waters of how was actually providing the service.]
Hi, Brett! I apologize for the delay in getting to your questions. The underlying issue for both of these situations is that you don’t know how to charge for your services.
Too many therapists make the mistake of basing their fees on the wrong things. Forget what insurance / managed care will reimburse and consider instead what you want to ultimately earn in order to be comfortable. That is going to tell you how many clients you need to see, how many hours you need to work, and what you’ll need to charge to reach that financial goal. It’s fine and good to know what you colleagues are charging and what insurance / managed care will pay, but don’t make your income contingent upon their numbers. There is only one you and your gifts / talents are unique.
Think I’m misguided? Check out Chris Guillebeau’s Ideal Lifestyle Costing and then drop back in to let us know what changes for you.
And, your third situation shows your own ethical stance. Good for you! It is important that you make sure the insurance company knows that you are the provider and are not yet licensed. Your current practice is an excellent way of insuring that they know. However, if you wish to file electronically and want to make sure that your insurance company understands the details of your practice, you might call Provider Relations to discuss this with them. Assuming they have no issue with you providing services under this scenario, you can then follow up with a letter detailing your discussion with Provider Relations and request that a copy of the letter be put into your file.
Hi! great discussions! I recently opened my practice and am an in-network provider for a few insurance companies but also see cash-pay clients. My question is related to fee charging for clients who have not met their deductibles. For example, my customary fee is $130 for 45-min but lets say my contacted rate with one particular insurance company is $90. Should I be charging the client my customary fee of $130 even though only $90 out of the $130 would go toward their deductible or should I be charging the client my contracted rate of $90? I understand that I would be charging my customary fee of $130 and would receive $90 from the insurance company once the client’s benefits kick in after the deducible is met, but I am a bit confused about what to charge the client prior to the client meeting the deductible. Any clarification on this issue would be greatly appreciated!
Hi, Tristan! This is so strange because I keep responding to this question, think I have posted a reply to it, and then come back days later and . . . it’s gone! Trying one more time . . . .
I’m glad you came here to ask this question because it comes up often for those who are new to private practice and taking on their own billing tasks. You fee is always what your fee is. Your fee is $130 for 45 minutes. On your receipt, you will always note that your fee is $130. The account will get credit for $90 when the client or the insurance company pays that amount. And, you will have a remaining balance of $40 that you will “waive” due to the contract that you have with the managed care company. This shows the client what your “normal fee” is.
When your client has a deductible to reach before insurance benefits kick in, what you accept from that client is going to be entirely contingent upon the contract that you have signed with the managed care company. For most – but not all – you have likely agreed to accept no more than $90 / session from your client. Under this circumstance, the receipt will look the same; only the source for the income will change.
Hello Tamara. I have read posts and responses to what fees legal/illegal in private practice.
Myself, in a process of starting a practice. My ethical dilemma is that as practitioners we should be able to accommodate the clients who for multiple reasons cannot afford paying high fees.
NBCC code of ethics does refer to that counselors should allow certain percentage for these type of clients.
This should have absolutely nothing to do with what ins. companies charge but should be structured that people with low income should be able to receive services.
I saw you said that this is illegal, however it is unethical to refuse the service in our profession.
My thinking is that we should not be clouded by thinking of profitability only, because then, we can easily forget why in the first place we came to help people. Yes, our lifestyle is important but we should not be forgetting about the Why we came into this profession.
So, knowing that this is illegal, how do we accommodate those who cannot afford?
Thank you
Maya
Hi, Maya! Welcome to Private Practice from the Inside Out and thank you for taking time to ask for clarification. I think you misunderstood what I was saying. You certainly can and should accommodate clients’ financial needs as you are able. However, it’s imperative that you do so systematically and across your entire caseload. In other words, you cannot randomly (or with bias) choose to accommodate one client and not the next just because you feel like it. Instead, you need to create a fair and systematic way to assess these needs.
Hi, I’m a biller and recently the psychologist I bill for signed up for Medicare and in the training she learned that she should be consistently billing to all insurances even those with contracted rates at her published rate. They told her that it’s important to show that she has the same rate for everyone. Is this correct? I thought it only applied to cash private clients.
Hi Tamara,
My fiancé is in the process of starting up a part-time cash pay private practice one day per week. She currently works part-time in a community mental health clinic where she primarily sees patients with state insurance and is paid hourly and plans to continue doing so once the practice is open. She also has been hired to work in a separate group practice part-time and is currently in the process of being placed on insurance panels for this group.
My question is, does her current situation place her at risk for violating insurance fraud?
Thank you! Very informative site.
Ryan
I am in private practice and am contracted with a number of insurance companies who only pay for 45 minute sessions.
Several of my clients would like (and need) longer sessions (60-75 minutes).
Is it legal to charge for the additional time spent with the client?
For example, if a client has a $25 copay for the session and I spend an extra 15 minutes with them, is it OK to charge him $50 (the copay plus $25 for the additional time since my usual fee is $100 for a 55 min session).
I can’t seem to get an answer on this anywhere. Thank you!
Hi, Beth! Welcome back to Private Practice from the Inside Out.
Is it legal to charge for the time you spend with your client? Yes.
However, it is also legal for you to have entered into contracts with insurance companies in which you have agreed to charge only a copayment and / or to be reimbursed by the companies for X amount – and I suspect that that is what you have done.
For those clients that you are seeing under a managed care contract, you are still ethically responsible for doing what is in your clients’ best interests.
If the truly “need” additional time, then you are ethically responsible for providing that service or making sure that their needs are met in some other way; if they merely “want” additional time, then you have more leeway to decide how you want to handle those situations.
However, if you have entered into legally binding contracts with managed care companies, you are also legally obligated to comply with the billing practices that you have agreed to – and each one of those contracts may stipulate something different.
The scenario that you describe – one in which your ethical obligations and your legal obligations are in conflict – is exactly what led me to disentangle my practice from working directly with managed care.
I remember feeling torn between my clients and not being able to legally do what was sometimes in their best interests – so I got off of every one of those panels and it was the best thing I ever did – for my clients and for myself.
I know this isn’t what you really want to hear, Beth, and I hope you are able to find a resolution that works best for you.
Whatever choices you make, know that there are many many other therapists out there who are struggling with the same issues when it comes to managed care.
Hi,
I’ve read through the thread and want to clarify, is there any way to be able to charge one set fee for all my in network insurance clients and one set fee for all private pay clients in a legal way so that my clients who don’t have coverage will be able to the afford services? Sorry if this is a repeat question, I’m just a bit overwhelmed by all the back and forth
Thanks so much
Hi Tamara!
In researching other nutritionists in private practice I’ve found that it seems to be common practice in my city for providers to offer lower rates to cash paying clients. Its often worded as a “discount” (not reduced rate) for “full payment at time of service” or something similar. Nutrition benefits vary greatly among ins plans so its not uncommon for in-network clients to either not have coverage for nutrition visits or to have exhausted their allowed number of visits and would elect to not use their insurance if they received a reduced fee for paying upfront. What’s your opinion on the legality of offering a discount when payment is made in full at time of service if it is offered to all clients equally (in-network, out-of-network, or non-insured)?
Related to that, if I gave a superbill to an out-of-network client who paid at time of service and received said discount, how would I reflect that on the superbill? Would I list the full fee, or the amount after discount?
Thanks in advance for your time and thoughts! I really appreciate reading your blog posts and the comments from others!
Hi, Marlene! Welcome to Private Practice from the Inside Out!
We have quite a few nutritionists in our community here and they may be able to speak with more authority specific to your field.
I can’t give you any legal advice.
I am not an attorney.
But, I can make a few points related to your inquiry.
If you have signed contracts with various third party payors like EAPs or insurance companies, then there are very specific practices that you have legally obligated yourself to comply with.
Furthermore, if you are in the United States, you may find that your state laws also dictate what you may and may not do concerning the offer of reduced fees for “cash pay only.”
Some therapists try to circumvent these restrictions with “payment same day discounts” but again it’s likely that your contracts with third party payors (and possibly state laws) will not permit this.
The only way to be sure that this is going to be legal is to seek the advice of an attorney in your own jurisdiction.
I know, Marlene, that this is likely not what you wish to hear but I think one of the reasons so many of us in the helping professions struggle is because we have been told (or simply made up in our own minds) things that were not . . . and are not accurate or true.
If you want to specify which state you are in, I may be able to refer you to an attorney in your area.
Best wishes on your journey!
Hi, thanks for a great discussion. I know this is an old posting but I feel like I am still confused about one thing. If I am seeing a client who has insurance and I am an in-network provider, what do I charge them before their deductible is met? Lets say my fee is $150 per session. Do I charge the client that until their deductible is met? When it is met, I know that I will be accepting the contracted rate from the insurance company (far less than $150). But in that meantime that the client still hasn’t met their deductible, I know I charge them directly, but is it legal to charge the full fee? Thanks. Great website, it has been immensely helpful.
Hi, Andrew! Thanks for following this discussion and letting me know that this website has been helpful to you!
You’re asking something that most of us have wondered at one time so I appreciate the opportunity to address this right here.
As an in-network provider, you have entered into a legal contract with a third-party payer.
That contract stipulates what you are allowed to charge your client.
It will be the same rate before, during and after their deductible is met.
This has been the most helpful 15 minutes of my career!! I am feeling much more comfortable about being private pay or being an out-of-network-provider.
I want to touch on what you are referring to as insurance fraud. I had a GREAT ethics professor in grad school and she spent a lot of time on this subject. She and I have had many private conversations about it as well. She has pounded it in my head, that no matter how logical it may seem, it is fraud and unethical. I was lucky to have that knowledge before I even began working. thank you so much for this blog. I have just found it and will be spending a lot of time on here!
Sheila! You have made my day!
Thank you for dropping in to let me know that you are finding this info to be helpful!
I love that you’re also tipping your hat to your ethics professor in grad school!
Care to share her name and where she teaches or taught?
I would love to pass on your words to her!
Hello,
Is this true for raising rates? I’m curious because I have asked a few Counselors and have received mixed answers about raising rates for new clients.
I would like to raise my rates for new clients only, and allow my existing clients to remain at their rate for the remainder of the year. I work with insurance, so I’m wondering if this is possible? There have been many blogs that state this as a common practice as well. I’m wondering if this is only possible when running a cash-pay practice?
Any insight would be so helpful! Thank you!
Liz
Hi, Liz! Welcome to Private Practice from the Inside Out and thank you for bringing up this particular aspect.
If I understand you correctly (and, please, correct me if I’m mistaken), you are asking if you can increase your rate for new clients while allowing your existing clients to remain at your old rate.
You absolutely can do that because you are allowing all of your current clients the same access to you and you are allowing all of your new clients the same access to you at your new fee.
In other words, you are not showing a preference for or “playing favorites” with some clients; you aren’t punishing or preventing some client from accessing your services.
You are treating everyone fairly.
This doesn’t have anything to do with how you are reimbursed i.e. insurance, private pay, etc..
Insurance companies don’t dictate what you can charge; your contracts with the various insurance companies stipulates the amount (or percentage depending on the individual contract) that you can be reimbursed for.
I know that sounds like semantics but it is a little different; your fee doesn’t change – the amount you receive changes per your agreement.
Many therapists choose to keep their existing clients at the current rate while raising the fees for their new clients.
If you would like more information on raising your fees, you may find What to Do When It’s Time to Raise Your Fees to be helpful.
Tamara,
Thank you for all this information. I have a coaching practice and I like the creative idea of suggesting a more flexible payment plan! I never thought of that as an alternative to just reducing fees…..because I DO pay rent and want to be ethical and yet be paid for the help I am giving.
I appreciate your time in putting together this information and sharing it!
You are so welcome, Christine! I appreciate your voice here!
My normal self-pay rate is $180/session. I have a few clients through Crime Victims Compensation and only charge them the $90 for their sessions that Crime Victims Compensation pays out to me so there is no co-pay. I also have some clients paying through an out of network provider and submitting a super bill so I lowered my rate to the rate of their maximum insurance payment which was $110. Is this problematic for insurance? How do I sustain my self-pay rate where I need it for my business to continue and support clients through negotiating rates if I don’t have an official sliding scale?
Lauren, it is problematic if you “lower your rate to their maximum . . . . ”
Your rate should not change – even when billing your clients who rely on insurance for reimbursement; what will change is the amount you will receive but the amount you bill should remain your $180 / session.
Here is How I’ve Dealt with Clients’ Financial Needs and here is How to Crush Private Practice with Cash-Paying Clients.
Let me know if these are what you are looking for!
Hi Tamara!
First, I’d like to say that your work has been a lynchpin in my growth and development in starting my own practice. I have scoured the comment section on this blog, and am hopeful that you would be able to provide me with some clarity. I currently see only cash paying clients, and my rate was set because of the population and the demographics I work with. As I have started to receive more client referrals who want to use their insurance, I have decided to begin accepting insurances. With that being said, the rate in which I am currently charging my cash paying clients, is the rate in which I bill to the insurance companies, correct? ex; if I charge $100.00 for an intake for my cash paying clients, do I bill that to the insurance companies for those clients who want to use their benefits? Or is there any way to be able to charge one set fee for all my in network insurance clients and one set fee for my cash paying clients in a legal way so that my clients who don’t have coverage or opt to not use their benefits, can still have access to services? Thanks so much!
Thank you, Jasmine! I am so encouraged to hear you say this about my work! May I quote you, please?
Your fee will be the same for all potential clients who are offered the same service.
So if $100 / hour is your fee for private pay clients, it will also be the fee you record for your insurance-paying clients.
However, because you have chosen to enter into contracts with some insurance companies, those contracts will dictate the amount that you are being reimbursed.
So what that looks like is that your fee is $100 / hour (and this is the rate that you will send in to the insurance company but you actually receive $80 / hour – and no . . . You may not “write off” the difference as a loss on your income taxes.
Each insurance company – or at least each managed care company – will have a set amount (that they have negotiated with you) and that you will then receive from them for your services.
That amount will likely differ between companies.
So, yes – your rate will stay the same; what will differ is the amount you are reimbursed as it will vary company to company.
Clients may or may not choose to use their private insurance coverage and I make that clear to them.
Some opt to not use it for privacy and / or security concerns; others don’t give those things a second thought.
Because I want my clients to be fully informed about the choices they are making with their finances and their health care choices, sometimes I will actually run through the numbers with them – comparing their likely out-of-pocket costs when seeing me for 6-10 sessions.
For short term clients who have not even paid their insurance deductibles, there is often no difference in cost.
Thank you so much for providing thorough clarity to my question!
And yes, absolutely feel free to quote me! I stand by what I said—your work has helped tremendously!
Great! Thank you, Jasmine! Let me know if I can help in any other way and please let your colleagues know about my work, too!
Hi Tamara! I know I’m late to this post but am taking a chance anyway!
I have four patients scheduled for my private practice thus far. After talking to some other therapists in the area and really thinking about my worth, I realized that I would like to set my fee higher, especially with an additional training I’m spending a lot of time and money to pursue. I obviously am not going to change the fee of those I just scheduled since we only recently had the discussion about fees.
However, if I decided to up my fee going forward for all new patients, would this put me in a bad spot if I get on insurance panels in the future? I have read that, in some instances, insurance companies may try to get you to apply with the lowest rate your are charging a cash paying client. I don’t want to get into any insurance fraud type situation. If so, would I eventually just raise the fees to match my other clients in order to avoid any insurance fraud when and if I do go on panels?
Thoughts or advice about this? When I have asked other providers about this, they sort of just give me a “ahh whatever it’s fine” answer or act like they don’t know what I’m referring to. In fact, I have realized that many therapists I know just set fees arbitrarily while also taking insurance. It’s very frustrating!
Thanks so much! Your blog is one of the only resources I have found that has been helpful and straightforward. I find it very comforting!
BCole, I am so sorry to have overlooked your question.
I just found it today.
I realize that it may no longer be relevant to you and your practice; however, it is a question that many therapists grapple with so I want to address it here just in case someone else is looking for the answer, too.
Congrats to you on those 4 clients!
I am sure more will be coming your way!
All therapists raise their fees (or at least need to raise their fees) at various points during their stints in private practice.
As long as you are honest with the insurance companies when they ask what your current fees are, you are not committing insurance fraud.
And, yes, down the road you may choose to raise the fees of clients that you are continuing to see even though they started off at paying a lower rate.
I appreciate your thoughtfulness in setting your fees, BCole and thank you so much for your kind and encouraging words about my blog here on Private Practice from the Inside Out!
I hope you will bring your colleagues and peers back here with you next time!
Hi Tamara,
I’m not sure how old this thread is and whether this an appropriate place to ask my question. I’m just now starting my own private practice and have decided that I will not be accepting insurance. I do want to help clients who may not be able to afford my fee of $100/session. I have decided to make available reduced-fee scholarships for some clients. I had a question about whether I am able to provide superbills to clients who are getting a reduced-fee. My initial understanding is that I am not. Thank you for making your insight and knowledge widely available. I’ve learned a lot from reading your blogs 🙂
Sri! Welcome! Yes, we’re alive, active, and well at Private Practice from the Inside Out!
Thanks for dropping in; I so appreciate your question here.
As a professional, you should always offer a superbill, invoice, or receipt to each client even if they are seeing you at a reduced fee.
Hi There! I am very confused, to say the least. I feel the information you are providing is extremely misleading. What is the problem with offering a discount to customers who are self-pay or choose not to use/disclose their insurance (they are legally allowed to do so)? Many large hospital systems do this. Often, they are not transparent about their rate, however, with recent legislation, new light is being shone on rate discrepancies. There is no law that states it is illegal to offer a discounted self-pay rate.
As long as this option is presented transparently to every client, and the self-pay rate remains the same for every client, I have a hard time figuring out the problem. Here are links to articles and statutes I have used to do my research.
https://www.cms.gov/files/document/gfe-and-ppdr-requirements-slides.pdf
https://www.ktvb.com/article/news/health/paying-with-cash-or-insurance-little-known-way-to-possibly-save-on-medical-bills/277-3075953b-6e78-4587-8f0c-ef0da35554b2
https://www.nytimes.com/interactive/2021/08/22/upshot/hospital-prices.html
https://www.nytimes.com/2021/05/13/business/health-insurance-cash-Biden.html
I’m so glad I found you! You have some wonderful information here which is greatly appreciated. I am the office manager/biller for two separate private practices, one who just moved from a group to their own practice in May. Here’s my question…I’m going to set it up briefly in the hopes of making some sense!
We understand billing the insurance and private pay clients the same rate. The way we reduce rates when needed is by offering a shorter appointment time. The rate for the shorter visit is also the same for those paying direct or with insurance. Here’s my question: she would like to raise the rate of the shorter visit but would like to only affect those new clients coming on board. She doesn’t want to raise the amount on the clients who came with her from the other practice. Is there a way to legally do that, or does she have to raise the rates across the board? Thanks!!
Hi, Shannon!
I am not an attorney and encourage you to contact your favorite mental health attorney if you are truly seeking a legal opinion.
I’ll bet in 10-15 minutes, that attorney could give you all sorts of great advice related to insurance and billing practices.
What I can tell you is that it is my understanding that she can ethically raise her prices whenever she chooses as long as she is raising her price for the same service(s) as long as she is offering the same service(s) to all clients.
Offering longer / shorter appointments is an excellent way to do that.
Other ways to fairly increase fees in spots is to consider offering lower rates on certain days of the week or months or during certain hours of the day; but, again . . . those lower rated opportunities must be offered to her entire practice without prejudice.
I hope that helps you think about this more clearly!
Thanks for dropping in!