One of the most important decisions when setting up a private practice is how to charge for therapy services.
It can be tricky to find a balance between charging a rate that covers operational costs and lets you earn a living while accommodating clients who might need help to afford fees.
One way to address this is by using sliding scale fees.
Sliding scale fees are based on the client’s income and ability to pay, allowing those who can’t afford full fees to access therapy at discounted rates.
These fees can be negotiated with individual clients on a case-by-case basis and often have guidelines that dictate what percentage will be charged depending on income level.
Sliding scale fees can ensure that those who need treatment have access without sacrificing your well-earned income as a therapist.
Should I offer a sliding scale fee?
Offering sliding scale fees for therapy is a way to make mental health services more available and accessible to individuals who may otherwise be unable to pay your standard rates.
The lower price point makes therapy an option for people with lower incomes or tight budgets. It reduces the financial burden and allows these clients to access professional care they wouldn’t have had before.
Sliding scale fees also open up a broader population of potential clients, helping therapists expand their client base and open themselves up to diversifying their practice.
Reducing financial stress might also lead to more engaged and productive sessions to help clients progress in their therapeutic journey.
It may be best for those starting out in private practice to wait until they have built up a stable client load before implementing a sliding scale system. This way, they won’t be pressured to take on more sessions than necessary to compensate for discounted fees.
Offering payment plans, free first therapy sessions, or creating subsidies for marginalised community members are all viable alternatives.
Therapists are not obliged to offer a sliding scale; their professional code of ethics requires them to support their communities, but there are many other ways besides lowering session rates.
Only you know what will fit best with your practice’s ethical standards and financial responsibilities – decide what that may look like and go from there.
How to set a sliding scale policy
When you’re ready to start setting out a sliding scale fee, a practice fee-setting calculator is a great place to start!
If your practice is already established, balancing your session numbers, costs, and new referrals can take some brain work.
If you’re just starting out and want to implement slide scale fees, consider including this in your business model from the outset.
Here’s how to get started, no matter where you’re at in your private practice:
1. Set a limit on the number of clients you will see on sliding scale fees
To ensure that you can make a profit, take care of yourself, and avoid burnout, it is important to decide how many hours you ideally would like to work each week and then adjust your caseload accordingly.
While each practice is different and will have different needs in terms of client numbers, it is generally suggested that 20% of your caseload should consist of sliding-scale patients.
Ultimately, the number of clients who utilise your sliding scale fee system will depend on the size of your practice and whether or not you expect to pursue new clients who need this payment option actively.
A balanced caseload may help maximise client engagement and financial success while offering tailored sessions.
2. Set a minimum fee for your sessions
The minimum session fee is important when calculating how much to charge clients.
Based on your financial budget, it is the lowest amount you can charge per session. When deciding on this figure, ensure it accurately reflects your experience and qualifications – don’t sell yourself short! Maintaining fairness in pricing will give you credibility with clients.
By creating a minimum session fee and having a system depending on financial need, you demonstrate that you’re serious about your work while accommodating and understanding to those who might only have a limited budget.
3. Set a time or session limit
Depending on the size and scope of your practice, you can set start and end dates for each client receiving sliding scale services or limit them to a certain number of sessions over the course of treatment.
4. Keep your sliding scale policy consistent with your practice policies
When implementing a sliding scale policy, ensure that your practice policies comply with any contracts you have in place.
Double-check that you don’t have standing agreements preventing you from charging different client session fees.
For example, some insurance companies include clauses stipulating that providers cannot charge lower fees for clients who do not have insurance. Reviewing any relevant contracts is essential to prevent potential legal issues and complications down the line.
How to discuss sliding scale fees with clients
Discussing fees with potential clients can be a difficult but important step in the therapy process.
It is essential to arrive at a fee structure that the client and therapist agree on before starting therapy. Some therapists offer a sliding fee scale based on the client’s income.
Prepare the sliding scale using the treatment fee calculated above and link it with the average salary in your treatment area or of the group of clients that you already have in your practice.
When clients come to the first session or even in the discussion over the phone, you can present the scale. In most cases, clients are asked to self-identify their place on the scale, and you may sometimes need to ask for evidence of their income.
Once you have determined a fee with your client and signed off on it, document it in writing to avoid confusion.
Reasons not to offer sliding scale fees
A sliding scale fee structure isn’t for everyone.
For instance, offering a lower session fee could devalue your services and dishearten therapists who are just starting out or have yet to gain their desired clients.
It also presents some ethical issues as you’ll need to decide on an acceptable range of fees for different people based on their circumstances. This could become complicated and create difficult decisions if you proceed.
It may also take more time to assess an individual’s ability to pay and keep track of everything. To do this, you can utilise practice management software that accommodates different payment amounts, making it much easier to organise.
Alternatives to sliding scale therapy
Some therapists may have reservations about the sliding scale fee structure (and that’s OK!) If that’s you, there are other options available.
One possible alternative is offering free services to select individuals or groups. This can help make therapy available by providing free sessions of varying lengths depending on the client’s needs.
You could also offer group therapy sessions which are more cost-effective than individual sessions. Group work offers a sense of community and provides an effective platform for sharing experiences and exploring common issues among multiple clients.
Another approach is to utilise technology such as telehealth and take your practice online. This allows you to provide remote services while allowing greater access to clients in distant locations.
Finally, look into reciprocal referrals with other therapists who offer similar services but with different fees, which helps keep costs down while maintaining a supportive referral network.
Need a helping hand running your practice?
Private practice software like WriteUpp is easy to use and affordable, and it lets you take client bookings online, reduce admin time, and improve the overall client experience.
It helps you to put everything involved with running a private practice into one secure and automated place.
Basically, it’s there to save therapists time and money!
You’ll spend less time looking for information, preparing notes, and writing client emails and text messages, giving you more time to grow your practice.
With just a few clicks, you can access a ton of features, including
- Taking bookings from your clients online, 24/7
- Cashless, online payments
- Online prescriptions
- Accessing reporting to analyse your business income
- Eliminating paper
- Improving your client’s experience
- Simplifying your compliance with key regulations like GDPR
- Reducing the threat of virus transmission
You can grab us for a live chat if you have any questions about what an integrated practice management solution can do for you and your practice.
The button is just there in the bottom right corner of your screen.