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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5 Common Barriers to Building a Fee-For-Service Practice

Building a fee-for-service practice can be scary, especially if it means resigning from insurance panels and finding other ways to attract clients. Others may have already made the switch, but don't know how to successfully navigate the change. I have found some strategies to help ease the transition. Here are 5 common barriers to building a fee-for-service practice and ways to overcome them: 1) "I'm uncomfortable marketing myself"

I often hear therapists say that marketing themselves feels like bragging or tooting their own horn by self-promoting. In order to move past this barrier, it's helpful to reframe the way you think about marketing. Consider it instead as REST: Relationships, Educating, Serving, and Trust Building. You are building relationships with potential clients who might see your website or other media, you're serving your community by educating them about important topics related to your niche, and you're establishing rapport and building trust with those who encounter you through your (online) content (REST is essentially why you're in the profession in the first place, right?). If you can focus on these 4 things, you can (and will!) attract clients who will pay your full fee. While your "marketing" strategy (I'm not a fan of that word, by the way) REST strategy is meant to benefit you by helping your community become familiar with you and your services, it's really about those who you can potentially help through receiving services through your practice. Don't be shy in getting the word out about yourself; it's a way for you to use your professional skills to serve and educate your community.

2) "I'm afraid of the ethical issues surrounding social media"

Those new to the world of social media may be wary to fully embrace it because of the potential ethical problems that may arise. Potential for unethical dual relationships, confidentiality concerns, and lack of knowledge are common fears. But these fears (and others) can be overcome: having an official social media policy included with your intake packet, avoiding directly soliciting your additional products or services to existing clients, being familiar with privacy settings online, and overall just using your ethics training and common sense will help you be prepared to face these potential issues.

Click here to read a more comprehensive article about overcoming fears associated with social media.

3) "I'm not good with technology"

The internet gives us incredible opportunities to communicate and reach an audience that is unprecedented in size. However, for those unfamiliar with all the ins and outs, it can also be intimidating, overwhelming, and frustrating to start. Mari A. Lee, an LMFT who specializes in sex addiction recovery, understands this feeling all too well. She describes being scared and resistant to learning new technologies. But she was able to overcome her "technophobia" by starting with manageable goals, finding a patient and persistent mentor, asking lots of questions, and setting aside time to devote to learning and practicing new tech skills. Her success in building an online presence paid off big time; she's currently a best-selling author! "If I can figure out how to blog, attend and facilitate webinars, host online trainings, navigate my Facebook business page, and so forth, anyone can... If this 52 year-old former tech scaredy cat can do it, so can you!" Mari explains (read more about her experience here). 

Understanding and applying the language of technology does not happen overnight. Be patient with yourself, as there's certainly some trial-and error learning here. Remember that everyone starts somewhere. And just like Mari, look for a mentor to guide you and bounce ideas and questions off of. You've proven yourself to be an apt and competent learner by becoming a licensed therapist; have the courage to learn another skill set as well.

4) "I can't do media appearances or speaking engagements because I hate seeing and hearing myself"

Therapists tend to get shy about media interviews. It's one thing to sit in front of a client and offer counsel in a one-on-one session, but speaking in front of large audiences can bring out anxiety in even the most confident clinicians. But remember how much you know; you are a trained and experienced expert. The aesthetic and "performance" aspect of media appearances will come with time. The more prepared you are, the more comfortable and relaxed you'll be. And if by chance you do feel like you bombed a television interview or radio podcast, learn from it and try to move on. It's not the end of the world if you make a mistake!

Read here for more tips on how to look good and sound professional in your media appearance.

5) "If I'm a great clinician, my work will speak for itself"

Some therapists plan to rely on their hard-earned reputation as an excellent mental health professional to be their main source of client referral. They then focus solely on refining their clinical skills, as they don't see the need to engage with their community beyond private sessions. While referrals can be an effective strategy to build your clientele, depending on others in the field to refer to you should not be the only way you attract people to your services. The harsh truth is that there are a lot of excellent therapists who fail in developing a successful private practice. Everyone has to start somewhere, and it takes time and experience to gain a loyal following and individuals who actively seek you out.

You may find that by being persistent in building trust in you and your services over time will be the major benefit to the growth of your practice. Because we have worked hard to establish ourselves as trusted professionals by embracing social media and building our online presence, my practice, Wasatch Family Therapy, receives most of our referrals from Google searches. This is something I feel very grateful for, and it's largely due to the fact that I stopped participating on managed care panels and consequently had to work within the community to build trust directly with potential clients.

Embracing a private pay practice model brings more than a few questions, unknowns, and worries. But by using these strategies, you can overcome barriers and build a thriving practice.

Besides the obstacles presented in this article, another major reason why clinicians may be wary of switching to private pay involves how they think their clients will be affected. I address (and debunk!) these fears here.

Click here to view my webinar and learn more strategies and tips about breaking up with managed care!

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Sign up for the Private Practice Toolbox Newsletter here.

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

Why I 'Broke Up' With Managed Care

At times, working with managed care insurance panels in private practice felt like dating a bad boyfriend. I was constantly investing more time and attention than "he" was in the "relationship" and it started to wear me down. I got up the nerve to break it off for good. I've never looked back. I understand that building a practice free of managed care isn't for every therapist. I am grateful for excellent colleagues who participate on insurance panel because and there is a great need for their services and I frequently refer clients to them. However, if you're a private practitioner considering building a practice outside of managed care, I share my experience of resigning from managed care to give you the courage to take the leap, and the faith to know that it can work. So here's my story...

After I received my clinical license I started applying to any health insurance panel. I just assumed that's how you're "supposed" to get clients in a private practice because every therapist I'd known had followed this path to get referrals. I was accepted to many panels and my practice started to grow. I was ecstatic.

However, as time went on I started to resent many aspects of working with managed care panels and it began to effect how I felt about my work in general. I felt overworked and drained and knew that something needed to shift if I was to be in private practice for the long haul. Here's what I started noticing about my relationship with managed care.

• Excessive paperwork: I was spending almost as much time performing unpaid work (paperwork, phone calls, tracking authorizations, and billing) as I was spending seeing clients. I went into this field to do therapy, not paperwork.
• Reduced income: I resented writing off 40-60% of my fee upfront just to be placed on a list with dozens and dozens of other therapists. The managed care companies weren't doing anything to market my practice and yet I was being asked to take a huge pay cut to work with their clients.
• Mandatory diagnosing: I grew tired of having to diagnose every client who walked into my office in order to get paid. When I met with a client who didn't have clearly diagnosable symptoms I was faced with a dilemma. Do I stretch a diagnosis just so I can get paid, or do I do free therapy because insurance won't reimburse without a diagnosis?
• Denied or delayed payments: Being denied reimbursement for a variety of reasons and receiving payment weeks or months after I had performed the service grew frustrating.

My uneasiness led me to critically look at the financial numbers and I was astounded by the amount of money I was writing off just to participate on managed care panels. I decided that there had to be a better way to for me to run my practice. I realized that if I resigned from managed care panels and transitioned to a fee for service practice, I could see half the number of clients weekly and make the same income. Or, I could see the same number of clients and double my income. To top it off, I could eliminate most of my unpaid paperwork hours. Work less and make more? It was a dream come true for a private practitioner and mother of young children.

I resigned from all managed care panels in 2007 and raised my fee by 10%. Since then, my private practice, Wasatch Family Therapy, has grown from a solo practice of one to a thriving clinic employing several therapists. We are adding a second office location later this month. It has taken some relentless marketing, consistent networking, and social media skills to keep a practice growing without managed care or any outside contracts, but it has worked. If I can do it, you can too.