Therapist FAQS: Your top 5 questions, answered

One thing I love about the Intentional Private Practice Facebook Community: it’s a great opportunity to dig into some frequently asked questions and process the mindset behind the decisions we make for our businesses.  Today on the blog, I’m sharing my thoughts on some of the top questions I hear from therapists.  For these questions, there is almost always a “it depends” question.  While we have our discipline specific ethics and our state and federal law (for US practitioners) to set boundaries on our decision making, within those boundaries there is latitude for an individual business owner to set policies that best reflect their business’s values.  So grab a cup of your favorite beverage and join me to think through these situations, then hop over to the FB group and share your thoughts!  We’ll be looking at credit card processing fees, therapy across state lines, late fees, how big of a caseload should one carry, and setting rates.  

Question 1: Credit Card Fees

If you accept credit cards in your practice, you are probably aware of the cost to you as a business: typically a percentage of fees collected, and sometimes an additional “per swipe” charge each time you run a card.  You might do this through your EHR, or you might do this separately through a bank or processing service.  A question I frequently hear is, “Can I pass this fee on to my clients?”

The answer is, well, it depends.  First of all, check your state law.  In many states, it is illegal to pass along the fee.  There may be exceptions, and you may live in a state that makes this illegal and yet know of businesses that do pass along the fees. Regardless of how others choose to follow or disregard the law, you would be well served (IMHO) to follow the law.  If you live in a state where you are allowed to pass along the fees to your client, then that is your choice as a business owner.  We all may have opinions on this… but the bottom line is that this is a choice you can make.

It might be important to consider how passing on the fee versus including it in your business expenses reflects your values, and how it will be perceived by your clients.  For instance, if you have a card processor that charges a flat 3%, for every $150 you charge to a card, you will pay the card processor $4.50.  So your $150 session fee essentially returns $145.50 to your business.  Think about what it would be like to say to your client “I can run your card, but there is an additional $4.50 processing fee, bringing your total to 154.50.”  Does that sit well with you, and reflect your business values?  If so, great.  If it doesn’t, then I’d recommend you sit with this and discern the best way to move forward.

Many providers work credit card processing fees into their business costs.  You might hear them say things like “it’s the cost of doing business.”  Well… yes and no.  It is definitely a cost, and it is an expense so you won’t be taxed on it like income.  You can choose not to take credit cards and accept cash and check only (I did this for the first 6 or so years of my private practice).  However, I’ve found that the world is increasingly credit card dependent, and chasing down checks is time consuming and not how I’d like to spend my time.  For me, I’ve adjusted my therapy rates so that they adequately cover my business expenses, including card processing fees, and still allow me to compensate myself in a way in which I feel valued.

Shop around for low card processing rates, and I’ve been told that sometimes you can negotiate the fees to lower them.  Personally, I use Ivy Pay, a HIPAA compliant payment processing service that is specifically for mental health providers.  At 2.75%, it’s the lowest rate I could find, and it’s managed through an app on your phone so that you never actually have access to your client’s card number, keeping the numbers securely encrypted.  Interested in trying out Ivy Pay?  Use my referral link and you’ll process your first $1000 in charges without paying fees!  

Frequently Asked Question #2: Cross-State Practice

A therapist has a client who will be in another state at the time of their appointment.  This could be a client on vacation, a college student returning to dorm life, a client moving to another state, or a client who lives out of the therapist’s home state and would like to start therapy.  Can the therapist see the client for a therapy session? What are the ethical and legal responsibilities of the therapist?

Again, this is not a cut and dry answer. First and foremost, therapy is most frequently defined as occurring where the client is located at the time of the appointment.  This may or may not be the state the client considers home, and the state on the client’s driver’s license is irrelevant if the client is not in that state at the appointment time.  This counts if it is a temporary departure (like a vacation or a client leaving for college) or a permanent departure, such as a client who moves.

Your first step is to get permission from the licensing board for your profession in the state where the client will be physically located at the time of the appointment.  If you are also licensed in that state as long as that state allows for telehealth, you are covered.  If you are not licensed, you can look into temporary reciprocity or permissions, or seek out licensure in that state.  Want a great resource for determining licensure allowances and restrictions?  Check out Person Centered Tech’s 50 State Tool.

You also need to satisfy your home licensing board.  Make sure they allow you to practice telehealth outside of the state.  The final folks to check with are your malpractice insurance providers–make sure they will cover you working across state lines. With permission from the boards where your client will be located, your “home” boards, and your insurance, you have the legal clearance and insurance coverage to proceed.  But, there’s more…

There are also ethical and legal implications to consider when working with clients across state lines.  What will you do in the event of an emergency?  Do you know how to access local-to-client emergency responders? Do you have permission to speak to an emergency contact who can step in and support your client?  How you handle all of this will vary depending on your typical caseload, your theoretical orientation, and the laws and ethics surrounding your practice.  I strongly urge you to seek out further training on remote therapy before making decisions about working with people in remote-to-you locals.  Person Centered Tech is also a great resource for these trainings.

My third question, which is probably the question that seems to generate the most passionate responses from therapists: llate charges.  Is it ok to charge a later charge? Should you charge a late charge?  If a client calls at the 23 hour mark and you have a 24 hour cancellation policy should you charge?

Again, this is not a one size fits all question.  Your answer–the answer that is best for your business and reflects your business’s values–will likely be unique.  It’s not a bad idea to think through how a cancellation policy is working or would work in your business, as well as how it works for your clients.  You can set your policy however it works best… as long as you clearly articulate this to clients.  You may want to include it in your practice policies, and review it with clients before booking.  Should you charge full fee, a smaller fee, a scale of fees, waive the first fee?  Yes, yes you should… you should do any and all of those if they are appropriate for your business.  Only you can answer that question. Sitting with your values around these issues will likely help you clarify your thoughts and policies. My Values-Aligned Practice Development Guide in the Resource Vault can help you dig into your practice values.  

What do you do if your client has an extenuating circumstance, cancels just inside of your “cut time”, or has some other unusual circumstance?  Again, let your values guide you to make a decision that is right for you and honors your business’s boundaries.  Giving some intentional thought to this ahead of time will help you to give substance to your policies and articulate these clearly in the moment when the boundaries feel challenged.

Question 3: Late Fees

This may be the question that brings up the most heated therapist discussions. Is it ok to charge a late cancellation/no show charge? Should you charge a late charge? If a client calls at the 23 hour mark and you have a 24 hour cancellation policy should you charge?

Again, this is not a one size fits all question. Your answer–the answer that is best for your business and reflects your business’s values–will likely be unique. It’s not a bad idea to think through how a cancellation policy is working or would work in your business, as well as how it works for your clients. You can set your policy however it works best… as long as you clearly articulate this to clients. You may want to include it in your practice policies, and review it with clients before booking. Should you charge full fee, a smaller fee, a scale of fees, waive the first fee? Yes, yes you should… you should do any and all of those IF AND ONLY IF they are appropriate for your business. Sitting with your values around these issues will likely help you clarify your thoughts and policies. Want more on values? Grab my Values-Aligned Practice Development Guide in the Resource Vault.

What do you do if your client has an extenuating circumstance, cancels just inside of your “cut time”, or has some other unusual circumstance? Again, let your values guide you to make a decision that is right for you and honors your business’s boundaries. Giving some intentional thought to this ahead of time will help you to give substance to your policies and articulate these clearly in the moment when the boundaries feel challenged.

Question 4: Caseload Size

Our fourth question is, “How do I know when my caseload is full?”  There is no one definition of “full.”  One clinician might see 40 clients a week in private practice, and one might see 10… or 5… or 3.  Guess what?  Any and all are ok.  (Doubting yourself and your choices, go back and re-read that sentence until it sinks in, and check out my values guide and book for more mindset support).  You could choose to see one client a week, and as long as that works for you and your business, go for it.

Your warning signs of too large of a caseload will be unique to you.  You might evaluate your energy levels, your ability to “let go” of work when you’re not working, the balance in your life, and any sense of resentment that your clients are “getting more of you” than you and/or your family are.  Those would be red flags for me that I was working too much.  The type of work may also influence this.  You might be able to manage working a larger number of hours, but limit yourself to only a few hours of more intensive need clients.  That’s ok, too.  Use your own internal signs to determine what size caseload works best for you.

If you have clients that attend therapy less than weekly, it might be hard to get a handle on your number of client facing hours per week.  Guess what?  It’s all a math formula and I’ll walk you through the process in my blog article on determining your caseload.

In a perfect world, your ideal caseload will give you your desired income.  We’ll look at that as we address our final FAQ: How do I set my rates?  How much should I charge?  Is it really ok to charge X amount?

Question 5: Determining Fees

Deciding on the rate for your appointments is a big question.  Once again, there’s some work to be done on exploring one’s values as a business owner, as well as digging into money mindset in order to answer this question in the way that is right for you.  There is not one right answer regarding fees, and you won’t find your answer in what others around you are doing.  This is such a big question that I devote an entire chunk of my workbook to money.

Sure, there’s something to be said about geographic region and varying costs and income levels, and this will ultimately be reflected in your fees.  However, your own needs as a business owner will also inform your fees such that you are paying your key employee (yourself!), and any other employees, in a way that allows them to feel valued and supported.  Otherwise, they run the risk of becoming resentful about the work that they are doing without adequate compensation, and may devalue the business and even quit.  And if you are that employee, quitting means closing shop… just think of all your clients that would not be served if you were to resign!

There are formulas for setting rates, and while I can share the simplest version here, there’s also some important context to arriving at these numbers. I dig into this in my workbook, which you can find here.

The workbook will walk you through determining all of your business expenses–of course, consult your tax professional to make sure this is a fit for your business model.  Once you have your business expenses, you can add your needed income (including taxes) to have a total operating expenses number.  To generate your total operating expenses in revenue, you will need to take your number of client sessions per week, multiply by your number of weeks per year worked (no vacation at all is 52, 4 weeks off is 48, etc), and, finally, multiply by your hourly rate.  In other words, total operating expense = total sessions per year X rate.  You can work with each of these variables until you find a sweet spot.  As an example, if you see 20 clients per week, at a rate of $165, for 48 weeks a year, your total revenue will be $158,400 (this is gross revenue, before taxes etc).  If this is sufficient to cover your business expenses and income/taxes, great.  If it’s more than you need, you can consider reducing your fee, taking some pro bono or insurance contract work, or working fewer hours.  If this number is not high enough to cover business expenses and income, then your options are to raise your fee and/or raise the number of hours worked.

I love diving into these frequently asked questions and, as you’ll see, there is often not a one-size-fits-all answer.  Your business will be uniquely yours, reflecting your passions, your creative energy, your skills and expertise, and your values.  I’d love to answer more of your questions–hop over to the facebook group and ask away!  Interested in gaining a personally tailored view of your business and exploring how coaching can support your launch, growth, or refinement of your work?  Reach out for an initial discovery call.  Have a great day!–Kim