Once you’ve worked hard to build your 
practice and you’ve been on your own for several years, at some point you are going to need to raise your fees.
(Uh-oh . . . another area that didn’t get talked about in graduate school!)
It’s not a dilemma that you will face often but it is important to know how to handle it when the time comes.
Here are the steps that I take and the choices I make when it’s time to raise my fees.
Step 1
How much do I need to raise my fees?
I have raised my fees about 10% each time I have raised them.
Whatever your increase, be prepared to justify the amount.
Step 2
Whose fees are going to be raised?
That’s right – you have choices.
Barring any contractual constraints, you may choose to raise the fees only for new clients, for all of your clients, or for only certain hours or types of services (like groups or family therapy).
I have chosen to keep my fees the same for current clients and increase fees just for my new clients.
When a client terminates with me and then returns for services 12 months later, s/he is charged my new (and higher) fee.
Step 3
How should I inform my clients and how much notice should I give them?
Once I decide that I am going to raise my fees, I mention this to my clients at the end of counseling sessions.
I let them know that they will be receiving letters from me that will formally notify them of my intent to raise my fees on a specific date.
It is important to provide ample notice to each of your clients.
I typically give a full 90 days notice in writing.
You may choose to give less notice but I would recommend always giving at least 30 days notice in order to allow your clients ample time to reassess their financial situation, make other financial arrangements, or find another therapist if needed.
Step 4
What’s the result of my change in fees?
After initially mentioning my intent to raise fees and again after mailing the written notice of my intent, I make a point to check in with each of my clients to make sure that they understand why, when, and how much fees will increase.
At the same time, I am also checking out how that fee increase is affecting my client . . . .
Is it met with understanding or apprehension or resentment or something else?
The truth is that all of us have lots of emotional baggage related to money.
Therapists do.
And, our clients do, too.
Changes in money – plus or minus – typically bring up baggage.
Taking care of yourself – financially, physically, emotionally, spiritually – are what you are ethically required to do.
That means that if you are successful in private practice for the long haul, you will need to raise your fees at some point.
When it comes time to raise your fees, don’t let your money-related baggage get in the way.
I think this topic along with the otehr topics you have raised are so pertinent to new teherapist, interns, and veterans. Keep up the good work!
Hi, Sherly! Thanks for dropping in here at Private Practice from the Inside Out! I appreciate you taking time to let me know these topics of helpful to you. Feel free to offer suggestions on other topics that will help you and other mental health professionals grow your practices!
This brings me back to a post you did some time ago about when to reduce your fees, and whether or not you could take care of your own financial needs. It helps me to remind myself, that taking care of myself is therapeutic for my clients as well, because they will benefit from a balanced and secure therapist.
Hi, Jill! Thanks for dropping back in here! Yes, it really is something that all professionals need to remember . . . . If we aren’t taking care of ourselves, we are not taking care of our clients, either!
Hi Tamara,
Thank you so much for this post! I have recently made the decision to raise my rates, in large part because of the increase in gas prices, since I travel to facilities and clients’ homes. This rate increase has been a long time in coming though – it is the fact that we now have a baby to take care of that has helped me feel less guilty about raising my rates. It is always a great reminder that we therapists have to take care of ourselves financially if we are to be able to continue serving our clients.
Hi, Rachelle! It’s so nice to have your voice in the mix here! Welcome!
It’s funny, isn’t it, how mental health professionals can take care of others on a daily basis but often struggle to take care of ourselves!? You might also be interested to know that being in private practice as a mental health professional is actually one of the more expensive businesses to be in. You and I have many hidden and “soft” costs that often go unnoticed. I should probably write a post about that, shouldn’t I?
Thanks for dropping in here to chat, Rachel! If you are finding the info and community here to be useful, I hope you’ll pass it on to your music therapy colleagues. It’s important to me that we have all of the mental health professions represented here at Private Practice from the Inside Out.
Hi Tamara,
Such a timely post as I just decided last week that it’s time to raise my fees. I’ve decided to do so only for new clients to simplify matters. I would be interested in a post about the “soft” costs that you mentioned.
Hi, Dawn! It’s nice to have your voice here at Private Practice from the Inside Out! I am putting the “soft” cost post on my to-do list and hope to crank that out within the month! (If not, feel free to remind me!)
By the way, I just checked out your website and noticed that you’ve done a really nice job of getting media attention for your practice and your pet issues. That’s something that we can all do to build buzz about our businesses as well as topics of concern. Nice job!
I hope you’ll drop back in often to chat and send your social worker colleagues this way, too!
Hi Tamara! It’s right that they don’t teach us about this in graduate school…or a lot of other practical things too. We’re glad you’re around!
I had a question about how you decided to add consulting to your business as well. I know diversifying your services can often lead to the ability to reduce fees for individuals, as has been mentioned in previous comments. I have just received my LPC and I’m thinking about starting a small business (as you recommended in another article, starting as small as possible and then build from there!) I am wondering how you decide when and if to add consulting services, and if you have to have any special licenses to practice legally.
Thanks for your always-insightful articles!
Stephanie! It’s good to have your voice back here! I’m with clients this afternoon and I want to do this justice because it’s really important. I think I’ll take a few days and then write a post on this so that everyone can access it more easily. I hope you don’t mind the delay!
The last time I raised my fees was when I relocated to a new office. The move was an upgrade as the new space was much larger, more accessible to two major interstates and more family friendly. I not only raised my fees but went from 50 minute child therapy sessions down to 45 minutes. I gave 30 days written notice to current clients and new clients were given the new fee structure. It was a smooth transition.
Thanks, Pam, for dropping in here to comment on this. I think it’s so helpful – especially when we are considering doing something new like changing our fees – to have lots of input from others rather than just my lone voice. Your experience has been similar to mine. It’s run smoothly every time I’ve made the decision to raise my fees, too. I think it’s because it has been a fair decision and I have respected client’s needs along the way.
I know I’m late getting to read all of your posts, but this is topic that I’ve been wondering about lately. My costs for running a limited practice (part-time) seem to be higher than I had originally thought they would be, which means I’m not bringing much home. I keep getting calls for evening sessions, so my one night during the week (I work 3 days, but only 1 evening) is always booked. I don’t want to work evenings at all, but that is the time clients call for appointments. Wondering if I should bring back my other evening time slot has me dreading it (telling me I’m about to overstep a boundary I’ve set), so when I looked at your website at how you structure your fees and saw that you charge a higher rate for evening appointments I found a great way to have a higher fee but also have keep the limit of my sessions in the evenings. You have a great blog and provide so many ideas! Thank you for your time put into helping all of us with our practices!
Hi, Desi! Welcome back! I’ve missed you! No worries about when you get around to reading or commenting on a particular post! If you are like me, you always have more to read than hours in a day! My idea of a fantasy vacation is a beautiful, peaceful location and time to read everything on my to-read list . . . including my favorite blogs!
Thank you for your kind words. It’s really so much fun to help new therapists get their practices started on the right foot and to help more seasoned therapists either correct bad business habits or simply grow their practice to the next level. Your comments help me know when I’m on track (and when I’ve gone astray!)
I do structure my fees to increase the likelihood that I am working my preferred hours and that includes charging more for those hours I prefer to not work. In fact, I used to hate working evenings, weekends, holidays, etc. I value my family time and I value my ME time.
However, clients need you when they need you and I learned by trial and error that I should always charge such that I am only too happy to present – fully present – with my clients during their sessions at all times. While it might be unusual to do so, I find that my clients are all too happy to begin a session at 4:30 p.m. to avoid that higher fee (which sets in starting at 5 p.m.)!
It may be time, Desi, for you to reassess all of your fees beginning by taking a look at your budget and expenses. If they are already realistic, then increasing your evening fees may be just what you need. However, if you have misjudged the cost of doing business as a solo practitioner, you might need to go back and tweak more than just those evening fees!
Let me know if I can help. Happy to consult with you to help you set up a budget or develop a fee structure that works for you!
Question.
I don’t want my clients to know I only made 15 k last year gross.
I want them to think I’m more successful than that. Too many of my clients pay $70 in west LA, this is super cheap. Some pay $150.
I’m tempted to raise my minimum fee to $100.
Is this too fast? Should I go to $90/hr.
Do I say office expenses gas driving offering to meet when room expenses are higher, combined with no retirement plan…is the reason plus cost of living increases??
What do most people say are the reasons for raising.??
Hi Tamara! I was just wondering if the rate increase letter is one that is given to the client or if the letter is one that is signed by the client and goes into their file? Thank you.
Hello – I do the insurance and client billing for a large group of solo practitioner psychologists, psychiatrists and LMHC providers. Some of them bill LNI (workers comp) who just raised their reimbursement to more than their current fee/rate so they want to raise their fees a bit. Commercial insurances pay less than 50% of their fee/rate so they may increase their reimbursement a bit but not much. These providers want to raise their fees for 90837, 90834 and 90791, and I’m wondering if I need to send all of their insurance-pay patients a letter about the rate increase? LNI clients do not pay a copay/coinsurance, but if commercial insurances raise their reimbursement it may cause some coinsurance to increase a tag. Any advice would be appreciated!
Hi, Nancy! I’ve never had someone ask this before! Thank you for asking!
Any time a therapist raises their fees, clients should be given notice.
Obviously, for whatever reason, if a client is not paying a copayment or coinsurance, practically speaking they will likely not care.
However, it is a patient’s right to know what their fees may be; and it is also a good business move to let clients know that although their therapists’ fees are increasing, their personal responsibility remains zero.
I suggest you either send out a form letter OR have the therapist had a letter to each client noting the increase in fees and discussing whatever impact that will or won’t have on the individual.
And, don’t forget to have your therapists document that they discussed this with their clients – each one!