(p. 623) Handling Money Matters and Gifts in Psychological Practice
Fees, financial arrangements, and other money matters, along with the issue of gifts from clients, constitute important boundary issues in the professional relationship that require careful forethought and application by psychologists due to the significant potential for how they may impact both the treatment relationship and treatment outcomes. Boundaries are typically thought of as the ground rules of the professional relationship. In addition to fees, financial relationships, and gifts, examples of other boundaries present in psychologists’ professional relationships include self-disclosure, touch, personal space, time, and location. At times, each will have relevance for the professional relationship and will require the practitioner’s attention consistent with the client’s best interests. Failure to manage these boundaries appropriately may result in harm to the client and to the professional relationship or in charges of unethical and/or illegal practices. We recommend addressing these issues openly with clients and considering decisions about boundaries thoughtfully since each client’s individual circumstances and needs may result in different actions on the psychologist’s part. Widely accepted general standards applying to managing these boundaries, including fees, exist in the American Psychological Association’s Ethical Principles of Psychologists and Code of Conduct (APA, 2010). We advise psychologists to become familiar with these standards.
Getting Comfortable with Money and Being a Business Person
Most psychologists enter this profession, at least in part, out of a desire to help others. In general, psychologists are caring and compassionate individuals who seek to make a positive difference in the lives of others. Additionally, practicing psychologists provide services of value to others for which they receive compensation. As such, practicing psychologists operate or work in businesses. Most psychologists have little training in the business aspects of the profession and may feel ill equipped to manage this aspect of their work, both practically and emotionally.
All psychologists must become comfortable with their role as business persons. In this role, psychologists must directly address money issues and overcome any discomfort that they may have, including feelings of guilt associated with charging and collecting fees from clients for the services they provide. While they provide a caring, compassionate, and emotionally supportive relationship to clients, psychologists simultaneously provide professional services and they must be comfortable with the business and financial aspects of this relationship. It is essential that psychologists not see the roles of compassionate helper and business person as contradictory because both roles will prove important for the client’s success. For (p. 624) example, failure to collect agreed-upon fees for professional services provided will likely result in business failure, and thus an inability to help future clients, as well as possibly leading to a clinical failure to respect and consistently apply agreed-upon boundaries.
The issues of fees and financial arrangements should be addressed with each client at the outset of treatment. Clients have the right to know the cost of services to be provided and should understand all expectations of them. We suggest that in addition to a general informed consent agreement, psychologists have a specific financial agreement with each client, or with the financially responsible party if the client is a minor whose parent is paying for treatment. Similarly, when a third party, such as a court or an employer, makes requests for professional services, one should clarify financial responsibility at the outset.
The psychologist should ensure that the client (or the other responsible party) fully understands all services to be provided and the accompanying fees. While most clients will naturally expect to pay a specific fee for each 50-minute psychotherapy session, they may not anticipate fees for other services that may incur a charge and these should be specified in the financial agreement as well. Examples include fees charged for telephone consultations in between in-person sessions, e-mail correspondence, written reports, and the like. Nothing requires psychologists to charge for these additional services, but if one does, this requires clarification in advance. Because of the importance of the relationship between the psychologist and the client for successful treatment outcomes, psychologists do not want to engage in actions that may jeopardize it. This relationship, which is founded in large part on trust, can be promoted through open and direct discussions of fees and related financial arrangements. It is important to ensure that clients have reasonable and realistic expectations for the professional relationship, to include all fees charged, when and how payment is due, and all related expectations.
In discussions of financial policies with clients, include whether the psychologist requires payment at the time services are rendered or if the client will be billed for fees owed at some specific interval, such as monthly. Clients should also understand what form of payment is expected of them. Psychologists will also want to clarify all policies with regard to fees charged for returned checks, missed appointments, and cancellations. Many psychologists require 24 hours notice or they will bill for the appointment time. Such practices can qualify as ethical as long as the client has previously agreed to this policy as part of the informed consent process. Explaining the reasons for such policies to clients, such as psychologists reserving a specific time for each client that cannot easily be reassigned to another, will prove helpful. For those who accept automatic credit card payment from clients, including any information about charges for missed appointments or similar fees in the informed consent agreement will avoid later misunderstandings.
Because each psychologist’s time is valuable and failure to earn compensation for their time will not yield a sustainable business model, take care in implementing the policy mentioned earlier. While it is an important policy to have in place, exercising good judgment in when to apply it will prove helpful. For example, one may see a big difference between a client who lands in the emergency room following an automobile accident and clients who acknowledge forgetting to enter the appointment date and time on their calendars. When a client fails to pay agreed-upon fees, one may feel tempted to utilize a collections agency or take legal action through a small claims court. Psychologists should exercise extreme caution when considering this, as it may feel antagonistic to the client and it may precipitate the filing of an ethics complaint or malpractice suit. Instead, include in the financial agreement a maximum allowable outstanding balance, such as the fees for three sessions, and specify the actions to follow should the outstanding balance reach that point (e.g., meeting less frequently until the balance is paid, referring the client elsewhere, etc.).
(p. 625) Setting and Changing Fees
Each psychologist must appropriately value the professional services that he or she provides. Factors to consider when setting fees include the number of years one has been in practice, particular skills and areas of expertise one has, the uniqueness of the services one offers, what others with similar expertise charge for their services, and prevailing community standards to include what the local population can likely afford. One may research what other professionals offering similar services charge, but ultimately each psychologist must decide on his or her own fees. This has business implications (charging too much may result in few clients; charging too little may result in low income) as well as clinical implications (the ability to offer services to those in need). Each psychologist must decide on the appropriate balance between promoting one’s business and providing needed services to one’s community that are accessible financially.
The APA Ethics Code (APA, 2010) makes it clear that psychologists should not exploit those that they provide professional services to and this includes financial exploitation. An example of possible financial exploitation would be charging one fee initially and then dramatically increase it after the client becomes dependent on the psychologist. Yet each psychologist has the right to increase fees over time to maintain a viable business. As expenses increase over time, an increase in fees will be needed; however, the manner in which one increases fees has important ethical implications. We recommend that any anticipated increases in fees be addressed in the initial financial agreement as part of the informed consent process. Thus, one might note that the fee charged will increase by $15 each January 1. Or one can give clients notice before increasing fees, if one has not discussed an annual increase on a specified date previously. One should give sufficient notice for clients to have time to make alternative treatment arrangements in the event they find themselves unable to continue due to financial limitations.
Alternative Payment Arrangements
At times, clients may seek services they cannot afford. This may occur with prospective clients seeking treatment or with current clients who experience changes in their ability to pay for continued treatment. This may occur when a client loses his or her job or health insurance, when other expenses such as medical care for an ill family member occur, and in numerous other situations. We recommend that psychologists stay mindful of the possibility of such events arising during the course of treatment and have a written policy for payment alternatives in the financial agreement.
When an ongoing client experiences financial hardship, the psychologist has a number of options to consider. These include referring the client to a clinic or practice that charges a lower fee, lowering one’s own fee, meeting with the client less frequently, providing services to the client pro bono, or engaging in barter with the client. We address each of these topics next.
A sliding fee scale involves charging clients based on their ability to pay. Psychologists willing to use this approach should include how they determine clients’ fees in their written policy. This may include requiring documentation such as a client’s recent tax returns or copies of recent pay stubs. The written policy should specify how the fee may change based on different income levels. One may advertise the availability of this fee structure to all clients or only share this information with those who inquire about it or display such a need.
The APA Ethics Code (APA, 2010) encourages providing professional services pro bono as part of each psychologist’s responsibility to promote access to needed care for those who might not otherwise be able to receive it. Each psychologist will need to determine how many billable hours he or she can donate to pro bono services and still maintain a viable business. But one hopes that each psychologist will donate some portion of his or her time to those in need consistent with ethical principles of our profession.
In some communities and under some circumstances psychologists may engage in the practice of barter, the exchange of goods or services by the client for the psychologist’s (p. 626) professional services. Ethical standards make it clear that barter with clients in not necessarily unethical, but that bartering for services requires great care. We recommend fully discussing the possible use of barter with those clients interested in using it, including potential benefits, potential risks, and available alternatives before making a decision to use it. If barter is used, establishing the value of the goods or services to be exchanged up front will prevent problems later. It may prove to be easier to agree on the value of goods than on the value of services. Yet, in doing so, it is important to ensure that clients are not exploited and that fair value is agreed upon. Each party’s satisfaction with the arrangement will require monitoring and open discussion throughout the course of the arrangement to ensure that the bartering does not adversely impact the client, the psychologist, or the success of the professional relationship.
Insurance and Managed Care
Many clients will wish to utilize their insurance coverage to help pay for the psychological services they receive. Potential clients will want to know whether the psychologist’s services will be covered under their insurance and what their financial responsibility will be. It is important to ensure that potential clients understand whether the psychologist participates in their insurance plan before initiating services (and before incurring any fees). One does not want clients to assume that their insurance plan will cover the fees charged, only to find out when a claim is rejected that they are responsible for the fees.
For those psychologists who do participate in a client’s insurance plan it is vital that all benefits and potential limits to coverage be clarified and confirmed from the outset. Clients may assume that certain services or levels of service are covered by their insurance when in fact this is not the case. Verifying each client’s insurance coverage from the outset helps the psychologist and client to agree on a realistic treatment plan based on the client’s financial resources and insurance coverage. It would not be appropriate to develop a treatment plan that will likely take 50 or more sessions to complete when the client’s insurance only provides coverage for 12 sessions each year and the client cannot afford to pay out of pocket.
Some insurers require each client’s treatment plan undergo a utilization review process. The goal of this process for insurers is to lower costs and ensure that unneeded services are not provided. At times, utilization review personnel may exert pressure on the psychologist to limit the professional services provided in an effort to reduce costs to the insurer. Psychologists’ ethical obligations require that they make clinically sound treatment decisions, not fiscally motivated decisions based on the insurer’s needs. Similarly, psychologists should exercise caution about conflict of interest situations that would promote such fiscally motivated treatment decisions. For example, fear that failure to keep costs to the insurer low might result in being dropped from a provider panel should not drive decisions about client needs.
Gifts from Clients
As with other boundaries, psychologists should exercise a thoughtful approach to offers of gifts from clients. While it is important to act consistently with one’s theoretical orientation, each client should be considered individually. Issues to consider include the client’s motivation for offering the psychologist a gift (e.g., an expression of thanks vs. an effort to influence the psychologist), the circumstances of the gesture (e.g., at a holiday time vs. when asking for a report to the court), and the type and value of the gift (e.g., artwork made by a child vs. an expensive car). It is also important to consider cultural and other diversity factors that may shed light on the meaning of the gesture and how declining or accepting would likely impact the client and the treatment relationship. Finally, one should consider how accepting the gift would impact the psychologist and what the psychologist’s motivations are for making this decision. If accepting the gift would likely adversely impact the psychologist’s objectivity and judgment, great caution is recommended. (p. 627) Open discussions of such issues with a client may prove helpful when it is unclear if the psychologist should accept or reject the gift or if the psychologist feels uncertain about any of the issues raised earlier. Furthermore, in such situations, consultation with experienced colleagues may prove helpful. But, at times, having such discussions and exploring the client’s motivations may be countertherapeutic. A gift of homemade cookies during the winter holidays may represent an expression of appreciation that contains no hidden motivations and no potential for impacting the psychologist’s objectivity or judgment. In such circumstances, questioning the meaning or rejecting the gift may damage the treatment relationship.
When dealing with finances, fees, and gifts, psychologists should do the following:
Utilize the informed consent process to discuss financial expectations and responsibilities, ensuring their understanding of fees and any planned increases to prevent clients from feeling exploited.
Remain aware of one’s own financial needs and intentions and how clients may perceive your actions.
Consider each client’s background and culture, among other diversity factors, when establishing financial expectations and when responding to gift gestures.
Anticipate potential limitations to client finances and be flexible in response, choosing the treatment and payment options best suited to the client’s situation.
Ensure clients understand any limitations to insurance coverage for services to be provided, set treatment goals consistent with insurance coverage, and ensure that all treatment decisions are made with the client’s best interests in mind.
When presented with gifts from clients, evaluate the nature of the gift, any cultural factors relevant, and how your decision may impact future therapeutic progress.
References and Readings
American Psychological Association. (2010). Ethical principles of psychologists and code of conduct. Retrieved February 2013, from www.apa.org/ethics
Barnett, J. E., & Walfish, S. (2011). Billing and collecting for your mental health practice: Effective strategies and ethical practice. Washington, DC: APA Books.Find this resource:
Haber, S., Rodino, E., & Lipner, I. (2001). Saying good-bye to manage care. New York: Springer.Find this resource:
Hunt, H. A. (2005). Essentials of private practice: Streamlining costs, procedures, and policies for less stress. New York: W. W. Norton.Find this resource:
Knapp, S., & VandeCreek, L. (2008). The ethics of advertising, billing, and finances in psychotherapy. Journal of Clinical Psychology, 64, 613–625.Find this resource:
Chapter 22, “Interpreting Clinical Scale Scores on the MMPI-2”