Tamara Suttle | Private Practice from the Inside Out

How To Inform Clients When Your Fees Or Reimbursement Policies Change

Apr
26
2012

On Tuesday, I talked with you about how to terminate contracts with managed care companies. That’s just one of several reasons that you may need to change your fees or reimbursement policies in private practice.

During the last month, I’ve been having a really interesting discussion via email with a psychologist in South Carolina who is trying to decide whether or not to continue working as an in-network provider with managed care. One of her concerns is about how to let clients know once she decides to make that transition . . . .

. . . after reading your blog I just realized that it takes a weeks worth of insurance clients to pay my overhead AND I spend the time at night filing the insurance. I am considering letting people know now [that I am going to resign from managed care panels] but making my termination date in 6 months to give more time for patients to transfer to another therapist or reach and end point. How did you go about making the change?

Thanks so much”

Not So Fast!

Assuming that you have signed a contract as a preferred provider with a managed care company, you cannot simply quit accepting clients from them on the day you decide that you no longer want to work directly with managed care. Nor can you start charging those managed care clients your full fee without legally taking the proper steps.

Every managed care company for which you are a provider had you sign a contract in order to be on their preferred provider list. Each contract stipulates the manner in which you must resign. Virtually all companies require written notice of your intent to resign. Some may require you to complete the work that you have begun with current clients at your contracted rate. Others will specify the length of notice that you must provide to the managed care company and your clients that you are working with. Bottom line – read and comply with each contract. They are legally binding.

Beyond the legal stuff, what is most important for you to remember when making any change in your fiscal policies is respect – respect for your needs as an individual clinician and also respect for your clients’ needs.

Heads Up

With that in mind, I encourage you to give your clients as much notice as is reasonably possible when it comes to changing policies related to fees. Once I have made that decision, I typically tell my clients at the end of the next session that “I expect that my fees will be changing in the next few months. When you come back, I would like to talk about this with you so that you are not caught by surprise.”

Talk about The Change

At our next appointment, I begin the session by talking about whatever those changes in fees are. That allows me to explain why and how my policy on fees or reimbursement is changing i.e. “I will no longer be a preferred provider for United Behavioral Health” or “I’ve now completed my certification in EMDR.” This also allows ample time for my client to bring up his / her concerns related to this change.

Put It in Writing

I also advise my client that s/he will receive a follow up letter from me outlining the policy changes so that s/he will have the information in writing. ( I usually send this letter immediately after we have had this initial discussion about the change.) I also reassure my client in this session (and the letter) that my services will continue to be available to him / her after this new policy goes into effect. I stress that the only thing changing is my fees or methods of payment and that, as in the past, I will continue to work with him / her and remain available to answer questions or problem solve related to this and all other issues.

Check In

About one month before the new policy takes effect, I remind my client of the impending policy change and ask if there are any concerns or need for me to do anything to assist in making this a smooth transition. It is possible that a client may need help with budgeting to continue working with you. It is also possible that a client may want to wrap up treatment prior to the new policy taking effect. It is also possible that you may need to refer a client to another colleague as a result of this transition. Or, you may need to be creative in finding other ways to support your client based on his / her unique needs.

Timing Matters

I typically give my clients two to three months notice prior to making these changes. The psychologist noted above is considering giving her clients six months notice. For most clients, I think that may be excessive. Both your circumstances and those of your clients may change significantly in six months. Your clients may not even remember your discussions five or six months down the road. Likewise, you don’t want to burden your client unnecessarily.

However, there may very well be extenuating circumstances that would support such a lengthy notice. If your practice is psychoanalytically based and you typically see clients for years at a time, perhaps your clients are planning that far out. Or, if your practice is focused on working with clients who struggle with unstable interpersonal relationships and tend to personalize easily, you may indeed need a longer period of preparation with your clients before actually implementing these changes.

Never Lost a Client

I have never lost one client due to an increase in my fees; however, I have had to get creative in meeting client needs.

I have never lost a client due to ending contracts with managed care; nor have I struggled to fill my appointment book after terminating those contracts.

And, I’ve never lost a client due to changing my policies related to reimbursement for my fees; in fact, I’ve had clients respond by saying “You should have raised them a long time ago.”

Here’s the Reason Why . . .

Now, I will admit that I do have exceptional clients. They are, in fact, my favorite clients. But, that’s simply because that’s who I market my practice to – my favorite clients. And, the results that I get are directly related to our relationship with each other. These are the same building blocks that I write about in this blog and that I consult with clinicians about every day. When you build your practice on respect and relationships, your foundation for building a strong and vibrant private practice is virtually unshakable.

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Filed under: Money Matters, To-Do's Tagged with Change, Policies & Protocols

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How To Disentangle Your Private Practice From Managed Care

Apr
24
2012

by Tamara Suttle

Sometimes managed care companies change the terms of their contracts. Most contracts allow either party to terminate the contract without cause i.e. “a material breach of a contract term” at their discretion. Sometimes a therapist’s finances change such that s/he needs to resign from a provider panel. Sometime disputes arise between providers and managed care companies. And, sometimes, therapists realize after contracting with managed care that they cannot do their best work under the constraints of managed care.

Whatever your situation is, when you get ready to disengage from working directly with manged care, here are the steps you need to take . . . .

Step 1

Review your contracts with managed care. Not all panels are equal. If you want to gradually transition your practice from being managed-care dependent to being an independent practitioner, then you won’t want to terminate all contracts at once. I recommend that you begin by making a list of each company’s name and rate of reimbursement.

Step 2

Next, identify the company that has the lowest rate of reimbursement. This is the first provider panel that you should resign from. (Yes, even if this is your biggest referral source.)

Step 3

Decide how you will handle clients currently being seen under this managed care contract who cannot afford your full fee.

Step 4

Notify your clients of your intent to terminate your contract with this company.**

Step 5

Call the Provider Relations Department for this managed care company to get detailed information about how to legally end your contract with this company and follow their directions. Most companies require one to four months notice to end a contract without cause. Simply sending in your written notice with intent to terminate is not sufficient.

Note that after terminating your contract, it is not uncommon for providers to continue being reimbursed by this company for their clinical work at the previously contracted rate.

If this company has been a significant source of your referral base, you will want to wait until your income stabilizes before ending your contract with another managed care company. However, when you are ready to do, simply go back to Step 1 and identify the next company that has the lowest rate of reimbursement and repeat these steps.

Have you resigned from managed care panels already? How about dropping in to let us know what the process has been like for you? I’ve told you before . . . for me, it was the most freeing decision I’ve made to date. I only wish I had done so sooner!

**Pssst – Don’t know how to let you clients know that your fees or reimbursement policy is changing? I’ll let you know on Thursday!

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Filed under: Insurance | Managed Care, Money Matters, Referrals, Stress Busters, To-Do's Tagged with Contracts, Fees, Provider Relations, Transitions in Private Practice

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How To Avoid Collection Agencies When Your Clients Owe You Money

Apr
19
2012

by Tamara Suttle

Last year I was hanging out on LinkedIn when I noticed a therapist had started a thread of discussion on using collections agencies to recover money owed by a client. The therapist was asking for other mental health professionals’ experiences and opinions.

My colleague and e-friend, Jay Ostrowski, MA, LPC, LPCS, NCC, DCC wrote such a thoughtful and thorough response that I asked for his permission to share it with you. Here is what he said . . . .

I did try that a while back. It was not a great experience. If you are going to use an agency, you should put something to that effect in your consent forms.

Collections is difficult in therapy. Having worked with hundreds of therapists, I often joke that therapists are “allergic” to money. We are comfortable asking clients to do all sorts of things – except pay their bill. I’ve gotten good at it, but I still feel weird.

I have a few preventative medicine ideas and a collection idea for you.
1. Consider asking for payment at the beginning of the session. If there is an issue it can be discussed in treatment and the treatment plan can be adjusted to fit their financial reality.

2. If they can’t afford you, transfer them to financially appropriate care as soon as possible. This is painful, but it is the right thing.

3. Never let balances get big. Just like child behavior problems, if you treat them while they are small, they never get big.

4. Consider asking for a credit card routinely and set up automatic payments for services. Write this out in the initial paperwork and get it signed. This will do wonders for your practice flow (i.e. staying on time) and your cash flow. I have more thoughts if you are interested.

Collections: More important than the money is the relationship with the client and the reputation that this person will share about you with others. Sometimes it is fear of breaking the relationship that keeps us from collecting. However, when a client’s bill grows to a certain point, they are going to cease coming to therapy anyway.

The longer the balance is on your books, the less likely you are to collect the money. The client is most motivated to pay when they are interested in continuing therapy and least likely when the relationship has grown cold and they feel guilty over the debt.

The solution: This will sound strange at first, but what you need to do is put your receivables “on sale.” No kidding. For those who already have a big balance with you over 60 days, call them up and offer to reduce the amount by X percent if they can pay off the balance today with a credit card.

You’ll have to fight off that inner sense of justice that reminds you what you went through to earn that money and thoughts of others who didn’t get a discount. Frankly, business isn’t fair and you are not likely to get any money from these clients if they are not given a discount.

The second alternative is to put the client on a small monthly payment plan where you charge their credit card until it is paid off. This too, will likely need some discount arrangement. However, collecting less of the bill is better than none.

If you approach the client with a few solutions, you may be able to collect the bill. You may also find that they re-engage in therapy or at least say nice things about you. In the end, you may have to write down some of these debts as bad debts. That is the fuel that will help you create and enforce new financial policy. It happens to everyone in private practice.

Training yourself in collections is difficult. But as one of my mentors told me -”No margin, no mission.” We have to collect and make a profit in order to keep on helping people in the long run.

I’m sure there are other tactics out there. These are just the ones that worked for me.

I hope this helps,

Jay”

I couldn’t have put it any better myself, Jay! Thanks for letting me share your experiences and your wisdom with my online community here at Private Practice from the Inside Out!

And, if you guys are on LinkedIn and would like to see the many other therapists who chimed in with opinions, you can find them right here!

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Filed under: Insurance | Managed Care, Money Matters, Risk Management Tagged with Credit, Debt Collection, Fees

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How To Create And Use A Sliding Fee Scale

Apr
17
2012

by Tamara Suttle

Licensed Mental Health Counselor, Barbara Olson wrote in from Monroe Washington talking about her own struggle to provide services to clients in need while also setting limits on how low she should slide on her fees . . . .

Dear Tamara,

I just wanted to drop you a note and tell you how wonderful your site is. It’s very helpful. I especially appreciated your perspective on avoiding managed care and panels . . . .

I have had my own private practice (Monroe Counseling in Monroe, Washington) and have done well with pay-for-fee service or just being an out-of-network provider. I am just at that cross roads of trying to decide if I want to go onto panels, or just stay out of network. Call after call want to use their insurance because the economy is so bad and they can’t afford out of pocket fees.

Would you share with me if you use a sliding scale in your practice and if so, how do you come up with the scale?

I am struggling with just how low a fee will I accept, and yet want to earn a living, and charge a respectable/fair fee for service...just not sure how to come up with that fee.

In WA, the market seems to be $85 – $125 per hour session . . .yet is that what they are really getting, or are they dropping it down for out of pocket clients…just thinking out loud!”

Barbara, thank you so much for your kind words! I’m so glad you are a part of our online community here at Private Practice from the Inside Out.

I do not use a sliding fee scale and I recommend that mental health professionals find a different way to help their clients meet their mental health needs. I’ve address some of this in previous posts when I’ve talked to you about How I’ve Dealt with Clients’ Financial Needs, Reduced Fees, Sliding Scales, and Lessons Learned, and I’ve reminded you of some things you need to consider Before You Reduce Those Fees . . . . And, here’s a post where I’ve cautioned you about Setting Different Fees for Different Clients.

However, should you decide that you do want to create and use a sliding scale fee, here are the steps you need to take to do so.

Step 1 – To set your minimum fee on your sliding scale, identify the Usual and Customary Fee for mental health services in your geographic area. Use this a starting point.

Step 2 – Identify all costs (both soft and hard) related to running your business for 12 months.

Step 3 – Add the annual salary that you desire to make to the costs above.

Step 4 – Add the numbers in Step 2 and 3. Then divide by 12 to get the minimum monthly income you need to make in order to keep your business running.

Step 5 – Identify the number of clients that you have seen in the last 12 months. Then divide by 12 to get the average number of clients you see per month.

Step 6 – Divide the minimum monthly income you need to bring in from Step 4 by the average number of clients you see per month from Step 5. This number will give you the minimum amount you can charge your clients without putting your business in jeopardy.

Note that most new professionals undervalue their services and often struggle to build a strong practice. If you do not have enough clients coming in to see you, offering a sliding scale will not result in a bigger, stronger, healthy business. You cannot give what you do not have.

Step 7 – You are now ready to create your sliding scale. Determine what the breakdown of income levels and fees will be based on the high and low fee points you have calculated. Many businesses use the Federal Poverty Guidelines as a starting point . Here is an example of the 2011 U.S. Federal Poverty Guidelines and samples of sliding fee scales.

Step 8 – Remember that you cannot offer a sliding fee scale to some of your clients and not to others. Consider how you will gather and document your fairness in administering your sliding scale. One way of doing this is to create a form that gathers relevant information from each client. Such information may include proof of annual household income, number of dependents, chronic / debilitating illnesses, etc. (Remember to update this form regularly.)

If you have an example of a sliding fee scale that you have used, feel free to share it with us here!

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Filed under: Grow Your Practice, Money Matters Tagged with reduced fees, Sliding Scale, Washington

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5 Places To Grow Your Professional Community

Apr
12
2012

by Tamara Suttle

Several months back, Sarah Fudin and I exchanged emails about the possibility of her writing a guest post related to online professional development. As the Social Media and Outreach Coordinator for the University of Southern California’s MA program in teaching, Sarah’s post is a reminder of the many ways social media can serve mental health professionals in continuing to develop both our networks and our competency.

(If you are interested in writing a guest post, check out the guidelines here.)

_______________

A Guest Post by Sarah Fudin

Professionals in any field can benefit from sharing knowledge, experience and resources with peers. One of the best ways to keep your career on track and stay current within your field is by developing a professional learning network, which is essentially a group of professionals who exchange information, answer questions, and share the benefits of their knowledge and experience. By providing an environment for learning, sharing, mentoring and collaboration, your professional learning network can help you expand your knowledge base and broaden your professional perspective.

Today it’s possible to build a professional learning network from any location. Opportunities for making both face-to-face and online connections can be found by visiting professional websites, blogs, forums, social network sites, like Twitter and Facebook, and professional directories, like LinkedIn.

Here are some tips for growing your professional learning network:

Join a professional social network. Professional social networks are web services that provide forums for discussion, links to resources, online classes and webinars. They may also host conferences and other events in the real world. Examples of professional social network for physicians and other health care professionals are Social Media for Health Care, Sermo and Medscape, online communities with more than 100,000 members. Find out more about professional social networks in your field by searching online and talking to colleagues.
Join Linkedln. This popular platform for professional networking allows you to create a profile that will help you connect to peers in your field who share your interests. You can also join professional LinkedIn groups and participate in online professional discussions. For example, there are currently more than 300 special interests groups related to the mental health profession on LinkedIn.
Join Facebook and Twitter. Any professional who wants to network online needs to be familiar with these two. You can join professional groups on Facebook and post information about your professional status and achievements. On Twitter, you can participate in focused chats through hashtags (such as #mshm for Mental Health Social Media and #mentalhealth for Mental Health). To learn more about using Facebook and Twitter for professional communication, read this blog post.
Join the blogging community. Professional blogs are easy-to-access resources for information and contacts. By following blogs and adding comments, you can become part of an informal online community that shares information about your field. The professional social network that you join should provide links to popular blogs related to your field, and you can find others through online searches. Many blogs will allow you to become a subscriber and follow the conversation via email updates or RSS feed.
Create your own blog. Establish your online professional presence by creating your own blog. You can register for a free blog on Blogger or WordPress, or integrate a blog into a professional website. Establishing a regular schedule for posts about subjects that are relevant to your field will help attract readers. It’s also important to use other online platforms, like email, Twitter and social media sites, to let people know that you’re blogging. When you comment on posts by other bloggers, be sure to include a link back to your own site.

There are times when the amount of professional information available online seems overwhelming. Avoid information overload by seeking out professional resources that inform, instruct and inspire. Most importantly, don’t forget the importance of face-to-face contact. As you develop your professional learning network, don’t forget to get in touch with colleagues in your local community.

Sarah Fudin currently works in community relations for the University of Southern California’s Master of Arts in Teaching program. Outside of work Sarah enjoys running, reading and Pinkberry frozen yogurt.

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Filed under: Professional Development, Technology Tagged with Guest Post, Social Media

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How To Inform Clients When Your Fees Or Reimbursement Policies Change