While we are in the midst of bootcamp, we are continuing our series of starting a counseling practice. This series is meant to inspire but also to give you specific resources and tools to help you in your practice.
When you start your private practice, part of your business plan is to decide your procedures around payment for your services because you need money to run a business. Before you form your payment policies, first you want to know the types of payments you accept.
Cash – Cash is one of the easier types of payment to accept. Pros: Instant, in your hands money. Cons: Requires you being diligent about your tracking. This payment is only acceptable for in-person sessions since you can’t send cash via the mail in the US.
Check – Pros: Easy for the client and is easy to account for on the books. Cons: There is a time delay to having the money in your account. Checks can bounce so make sure you have as part of your policies a fee for bounced checks. Use your banks’ app on your phone to deposit same day instead of driving to the bank.
Credit Card – You can accept a credit card directly from the client and use a processing terminal, manually input into a separate system or use a swipe adaptor for your smart phone. If you have an electronic health record that has processing capabilities, you can store the credit card information in the file and handle the processing separately out of session. Pros: Super easy for the clients. It allows people to have access to care that would otherwise be unable to pay for services due to lack of cash flow. Keeping a credit card on file for missed appointments reduces your no-show rate and ensures payments for late cancellations. Cons: There are fees, but there are fees to many things in business. If this stresses you out, before you nickel and dime every credit card processing platform you research – charge a fee that accounts for the expenses to run your business.
Health Savings Account – Some clients have health savings accounts where they can use money, tax free to pay for medical, health and wellness services. Pros: Less financial burden on the clients because this money is being automatically saved and must be used solely for services. Cons: Sometimes your credit card payor won’t accept the card used for HAS monies however this is getting less common. It can be more of a hassle for the client if they are required to submit receipts for reimbursement.
BitCoin – a lesser known form of payment, but one I want to address. This is a digitally created, decentralized form of payment. There are therapists that accept BitCoin. Pros: It is easy to use and is something to offer that is unique and attractive to other bitcoin users. Cons: It's a little controversial as to its value and if it will stick around.
Paypal/Square – There are many others I could name but these are some of the most recognizable names. These online services for payment also allow for offline transaction capabilities, usually with a swipe attachment to the smartphone. You can email invoices and request payments. Pros: If the client has paypal, it’s a one click transaction and easy for them. Easy to add a payment button on your website as well. Easy for your bookkeeper to track as well. Cons: There can be a delay from payment to actual money in the bank. There are fees, but the same thought applies to credit cards. This is part of doing business, so account for that when determining your rates for service.
Insurance Reimbursement – You can receive payment directly from insurance companies, typically in the form of a check. If you are thinking about getting on an insurance panel, we recommend you check out Barbara Griswold as a resource.
Pros: More affordable for the client when they just pay a copay
Cons: You have two payments to track – the one from the client and the one from the insurance company. Use a biller to save your sanity. Your reimbursement will be less than your full fee 9.9 times out of 10.
EAP, Victim Witness or other grant funded programs – You may choose one of these options because it is your way to give back to the community. Pros: This makes therapy accessible to people that might not otherwise call on their own. The client never has to deal with payment. Cons: There can be serious time lags with some programs reimbursing you for your services. We have heard stories of people waiting over a year or having a victim witness claim denied. However, if you consider these options of payment as part of your sliding scale or giving back time, then it might take the sting out of things.
Once you decide what forms of payment you will accept, now you need to have policies in place to handle the transaction between you and the client.
-Handle the payment at the beginning – Fees should be discussed before coming in and at that time of the first session. Let the client know that the fee is due at the time of service, before session begins. From a business perspective this ensures payment before services are rendered. From a clinical perspective, it is an opportunity to discuss the relationship of fee for service between you and the client. If this is handled at the end, sometimes these issues get buried or put off and not processed.
-Don’t forget the payment is happening. When you take a credit card and then the client never has to think about the payment at the beginning of session, this does not mean they don’t realize they are paying. When they get their credit card statement or their billing statement they are reminding that therapy is an expense. You have to be more cognizant of this issue because the idea of fee for service is truly grist for the mill in your work with a client.
-Never allow debt to incur. If a client forgets their check book one day, no worries. But if a few more sessions occur without payment, you have developed a relationship with the client that needs to stop. You are not a loan officer. Do not allow payments to back up. If the client has financial hardship, then address it and if appropriate make adjustments to the fee according to your plan for your business. Debt between client and therapist is never to be encouraged.
-Keep a credit card on file – I mentioned this earlier when discussing credit cards but I want to reiterate. Keeping the credit card, on a secure and encrypted file, means you have more security in payment and it makes it easy for the client. Just make it part of your routine at intake that you take a credit card number.
-Allow advanced payment options. You may allow people to pay in advance. There are differing opinions from state to state, country to country on how much in advance you can accept so please consult with your local board or credentialing organization. This is a nice feature for clients and for your business. This is a great option for those that see clients weekly at the same time every week in their slot. You do have to track sessions used and have a policy in place for unused funds.
-Never charge more for different kinds of payment. In the US*, it is illegal to charge $3 in addition to your fee if a person uses a credit card or giving a discount for cash is also on the shady side. You have costs to running a business. Do not hand those costs over to your clients. This makes for poor boundaries and communicates to the therapeutic relationship a lack of responsibility on your part. (Ammendment 1/3/15: It is illegal in 10 states. California is one of them. You need to check with your state. It also may be against your contract with your merchant processing company regardless of your state. Visa and Mastercard have surcharge notification surcharge forms. There are also some merchant processors that allow you to do surcharges but not for debit or pre-paid cards with the Visa or Mastercard logo. Please read your contract before using surcharges in your business. If you are seeking to not lose income, we encourage you to consider factoring this cost into the cost of doing business when you determine your fee from the outset. Having a clear and simple fee structure might be what is best for your and your business.)
-Get a biller if you are on panels. We cannot stress this enough. Many therapists are losing income because they struggle to keep up on reimbursements from companies or they are losing time doing billing when they could outsource this and be seeing clients.