Tough Love: How to Be Firm About Finances

When you decided to go into the field of professional psychotherapy, it's likely that your reasons had little to do with money. Even as you first started, you probably didn't have dollars on the brain all the time (payments, insurance, fees, collections, etc.). Billing specialists deal with that stuff, not us, right? But those of us in private practice quickly discover how important it is to acknowledge and successfully navigate the financial aspect of our businesses. And resigning from managed care panels and switching to a fee-for-service model means that the responsibility to collect fees relies on the individual therapy practice; now, it's our job.

I certainly understand that it can be awkward. People get weird about money. I used to be uncomfortable asking clients for payment after they'd born their souls to me. But thankfully, there's a way to conquer money anxiety, serve your clients, and still meet the needs of your practice and of yourself. Here are some strategies I've discovered about how to be firm about finances and present your stated fees to clients with confidence:

(Re)Consider the Purpose of Money

Your own personal history may lead to your feeling anxiety about money. It may help to rethink the role it plays and the reason why we even have it in the first place: you are offering your time, energy, and skills to therapy, and in return, the client is offering you the resource of money. It's an energy exchange that can be emotionally neutral. It doesn't mean you are greedy or uncaring; not at all!

Value Yourself and Your Services

When I first started, I had a hard time seeing myself as a professional, which meant that I wasn't as confident or assertive about asking for money. But my supervisor helped me understand the training, skills, education, and experience I could offer. Remember what you're worth: you can provide valuable insight to those who are struggling, and you deserve to be compensated for your work. Keeping this in mind will help make it easier to accept payments and communicate about money issues.

Charge Before the Session

It works best to ask for payment at the beginning of the session before attempting to conquer tough emotional issues. This gets it out of the way right away and avoids the potentially awkward exchange at the end. There's no surprise, no uncomfortable conversation about fees owed. There's also something about being paid up front that is gratifying and enforcing for the therapist.

Use a "Money Script"

When possible, it's best to keep a separation between the therapist and the finances because it helps the client not associate his/her counselor with money. Use a planned and rehearsed script to communicate about payments. It may go something like this:

How would you like to pay for your session today?"

When potential clients ask, "Do you work with my insurance company?" I respond, "While we don't bill insurance directly, I'm happy to provide you with a receipt to submit for reimbursement from your insurance company. You may want to check with them and ask if you have out-of-network mental health benefits."

Have a Clearly Stated Payment Policy and Stick to It

Don't skimp on this. Take the time to develop and implement a carefully thought-out policy concerning payments, no-shows, cancellations, etc. By setting clear expectations, you can pave the way for an efficiently run practice with clients who attend sessions and take therapy seriously. Your actions and attitudes about finances will set the tone: if you feel anxious discussing money, your client likely will as well. But if you're professional, positive, and confident, a client will feel at ease.

My clinic policy is that if you are one session behind in payment your therapy is on hold until your account is up to date. Also, we charge full fee for no-shows and late cancellations, even on initial sessions, unless there is an emergency (read here for more about how to get paid for no-shows) . Therapist Leland Clipperton of Counseling & Mediation has a system in place where a client can actually receive a discount by pre-paying for 4 sessions in advance. Do some research, ask around, and get creative and innovative in developing a policy payment or tweaking your existing one.

You may find it helpful to have a system to notify your clients about their upcoming sessions. Making phone calls or using your EHR to send automated text messages or emails a day or two beforehand can serve as important reminders and reinforce the value of therapy. So if they're making the financial investment, we might consider making an extra effort to encourage them to be there.

In my 12 years in private practice, I've gotten extremely comfortable talking about financial issues with clients. With time, experience, and the use of these strategies, I am confident that the same can be true of you.

 How are YOU firm about finances?

What money tips and strategies that have benefitted your practice can you share?

Click here to access my webinar "How to Break Up With Managed Care" and learn more about how to improve your therapy practice.

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Therapist Blog Challenge #4: Answer An FAQ

One quick and easy way to generate content for a blog post is to answer a frequently asked question

What questions do you get asked over and over again about your practice? The questions can be about your therapy approach, about therapy in general, or specific a question about your practice. Make a list of common questions, choose one question and write your answer...and voila! You have a new blog post.

Here are a some sample questions to choose from or feel free to come up with on of your own:

• How do I know if a therapist is the "right fit" for me?

• Do you work with my insurance?

• How do I know if I need therapy?

• Is therapy confidential?

• I think my partner is depressed. How do I get my partner to go and see a therapist?

• My daughter is losing weight quickly. Could she have an eating disorder?

• What's the difference between a therapist and a coach?

• How does talking to a therapist differ from talking with a friend?

• How long does therapy take?

• How will I know when I'm done with therapy?

Ok, colleagues. This challenge is so easy. Let's get blogging! I'm excited to read what you come up with.

Additional reminders about the 2013 blog challenge

• Write and post your blog article in the next 2 weeks. If you miss the deadline or you read this article months later, that’s OK too.
• Post a link for this blog challenge in the comment section of this blog post.
• Read, comment, and share other therapist’s articles.
• Tweet your post using hashtag #therapistblog and tag @julie_hanks so I can retweet it.
• Pin it on the challenge Pinterest Board. I’ve invited everyone who posted a comment on the initial blog challenge post as collaborators so you can pin onto the group board.
• Spread the word and invite mental health colleagues to join the challenge. Articles can be added anytime throughout the year.
• Write no more than 600 words, make it easy to read, use a conversational tone, and gear your articles toward your ideal client (not other professionals).
• The goal of a professional blog is to provide value your website visitors, help them get to know your professional perspective, increase traffic to your private practice website, and build your practice.

5 Steps To Resigning From Insurance Panels

One of the most common questions that private practice therapists ask me is "How do I get off of insurance panels?" This question just came up today in my Private Practice Toolbox Facebook Group so I thought it would be a great topic for a blog post. In previous posts I've written about why I broke up with managed care (part 1) & (part 2), but this post will focus on how to do it.

The thought of letting go of the comfort of being on insurance panels can create a lot of anxiety for private practice therapists. After all, if we don't have clients, we don't get paid. Find comfort in knowing this equation. You only need about half the number of clients in a self-pay practice to make the same income (or more) than you made in an insurance based practice. Once I realized this fact, I felt a lot more comfortable resigning from insurance panels. Let's do the math...

Insurance:

Say you are seeing 20 managed care clients per week and you are reimbursed an average of $70 per client.

20 clients x $70 session = $1,400

20 clients x $70 session x 4 weeks = $5,600 per month

(then subtract your time or money spent in billing and paperwork)

Fee-for-service:

2o clients x $125 = $2500/wk

20 clients x $125 session x 4 weeks = $10,000 per month

10 clients x $125 session x 4 weeks = $5,000 per month

(with NO extra paperwork, NO delay in payment, NO denied claims, NO required diagnosis...)

So often we focus on number of clients instead of the quality of clients and the amount collected per client.

5 Steps To Resigning From Health Insurance Panels

1) Rank the insurance companies

Make a list of insurance panels and rank them from your most favorite to least favorite based on:

• reimbursement rates
• paper work requirements
• how quickly you're paid
• number of clients you see from each panel
• the type of clients generally referred
• your general feeling working with each panel

2) Resign in waves starting with your least favorite

Generally, I recommend to my consulting clients to resign in waves over the course of a year. Resign first from the panels with the lowest ranking - the ones that pay the least and are the most difficult to work with.

3) Check your contract for resignation requirements

Review your contract to check on the resignation process that you agreed to. Look at the time frame required. Do you need to give them 30, 60, or 90 days notice? Do you need to send in a written letter?

4) Beef up your web presence

As part of your plan to resign from insurance panels, it critical to invest in creating other referral sources. The most important being your web presence. Google is my #1 referral source. The majority of our clients who come to my clinic Wasatch Family Therapy find us online. The benefit of clients finding you online is that they've already read about you, your services, and your philosophy on your website and have chosen to contact you. This increases the likelihood that they will be willing to pay your full fee.

• Website - If you don't have a website, make that a top priority. If you have a website, make sure it's effective. Here are some common website mistakes and how to fix them.
• Blog - If you don't have a blog on your site, add one and start blogging weekly.
• Therapist finder sites - join PsychologyToday.com, GoodTherapy.org, and your professional organization's "find a therapist" site to help potential clients find you.

5) Know the benefits of self-pay and be prepared to educate clients

There are benefits to the client for paying out of pocket, instead of going through their insurance company, that they may not be aware of. As you make the transition away from managed care to a fee-for-service practice it's important to familiarize yourself with these benefits so you can educate your clients. A few of those benefits are: control over which provider you choose to work with, the course of treatment decided on by client and therapist instead of insurance company, and no diagnosis requirement.

Here's an example of how a provider educates her patients on the benefits of self-pay. Utah Psychiatrist Kelli Hyland, MD my colleague and consultation client, shares her philosophy in this blog post "Why Self-pay?"

(c) Can Stock Photo

Practicing Outside The Box: Psychotherapy On The Client's Couch

Michigan therapist finds niche providing in-home psychotherapy services

Would you travel to a client's home to provide therapy? After witnessing the high no-show rates while working at community mental health centers Michigan, therapist Tomanika Witherspoon, LMSW, CEO of Growing Counseling Services, decided to do just that.

She created an "outside of the box" specialty practice by focusing on providing in-home therapy.

In Witherspoon's experience, individuals who discontinued traditional therapy cited transportation, time and family responsibilities as the biggest barriers for receiving treatment. By providing in-home therapy, Witherspoon saves her clients travel time, travel expenses and time spent in an office waiting room.

What about her own travel time and expenses? Witherspon said that she does not bill for her travel time. However, to minimize the unpaid travel time and expenses, she only sees clients within a 20-mile radius of her location.

What about safety issues? "I typically do a phone-screening to gather the client's demographic information, insurance info, and the assurance that we will have somewhere to meet privately," Witherspoon says. "Safety is generally not a concern, but if it ever becomes one, I would meet in a colleague's office."

Providing in-home therapy services is not for everyone, but Ms. Witherspoon makes it work for her and her clients.

Visit GrowingCounseling.com to find out more about Tomanika Witherspoon, LMSW's "outside the box" practice.

Have you found a creative niche, a unique office space, use non-traditional interventions, or have something that sets you apart from other private practice clinicians?  I want to hear about it! Email me with "outside the box" in the subject line.

(c) Can Stock Photo

5 Signs It's Time To Raise Your Fees

It's common for therapists in private practice to have anxiety around money issues like how much to charge per session, how to ask clients for payment, and when to raise your fees. Getting comfortable talking about fees with clients is crucial to private practice success. After all, you own a business. In general, I think therapists charge too little for their services.

Several years ago, I resigned from managed care and I raised my psychotherapy fees at the same time. Fortunately, my practice didn't suffer financially from those decisions. What surprised me most about raising my per session fee was that the perceived value of my services went up. "You don't take insurance and charge a lot? You must be really good," was a sentiment that I heard frequently from potential clients.

Interestingly, I've found that clients tend to invest more in the therapy process because they are investing more money out of their own pocket for treatment.

If you're considering raising your fees, consider these 5 signs that the time has come to raise your fees.

1) You haven't raised your psychotherapy rate in over 5 years

If it's been over five years since you've raised your therapy fees, it's time to revisit the issue. Your cost of living goes up approximately 2% every year due to inflation. If you haven't raised your fees you are likely making less than you made five years ago.

2) Your full fee is equal to insurance reimbursement

If you set your fees based on what insurance companies are willing to reimburse, then your fees are too low. Historically, insurance companies reimburse at a much lower rate than the providers full fee.

3) You aren't making enough money to pay your bills

Your private practice needs to serve your clients and provide a sufficient income for you. If you are not making ends meet in your practice or your personal life you may need to reduces expenses and increase your rates.

4) You have a waiting list

A waiting list is a sign that your services are in demand and that clients will pay more for your services.

5) You've completed specialized training or certification

Your added expertise deserves additional compensation. If you have recently completed advanced training, like certification in DBT or Emotionally Focused Couples therapy, for example, you may want to charge more.

When is the last time you raised your rates? How do you decide when to increase your fees?

photo credit: Corey Holms