By Ofer Zur, Ph.D.
Money, like time and sex, are the most focused upon concepts in our culture. Most people agree that we can know a person by simply learning about their attitude and practices regarding money, time and sex. Most people admit to never having enough money and time and some, primarily men, complain about not having enough sex (an essay on time). Money has been representing issues of sex, power, greed, gifts, independence, control, love or self-worth. As Freud observed more than half a century ago, money is even a bigger taboo than sex. This statement rings even more true now, at the beginning of the 21st century. People’s relationship to money and time has been closely linked to that construction of meaning (e.g., Needleman, 1994). The modern views of money and time (i.e., “Money is time”) as commodities that need to be accumulated, saved and forever enhanced have left our culture starved, not only for money and time, but also for direction and meaning. Money often carries a negative connotation, as seen in phrases such as “filthy rich” and “money-grubbing.” It is also worth noting that the verb “to charge,” as in the phrase “to charge the patient,” has a certain aggressive quality. The nature of money is captured by Freud’s remark, “money matters are treated by civilized people in the same way as sexual matters-with the same inconsistency, prudishness and hypocrisy (1913/1958, p. 131).
Almost all practice-development experts agree that psychotherapists have very poor attitudes towards money. They primarily ignore the topic both in themselves and too often with their clients, especially with clients who are more financially successful then they are. Many therapists believe in the notion that care and profit are inherently incompatible. Along the same lines therapists have been equated with prostitutes as both are paid to provide love (Author, 2005). The obvious fact that therapists choose to go to graduate school to study psychology or counseling rather than business administration, law or economy seems to be indicative of the inclination and motivation of most psychotherapists. As a result, setting, charging and collecting fees in psychotherapy becomes a burdensome chore for many psychotherapists, which is often not handled well, clinically and ethically.
The issue of fees is addressed clearly in the ethics texts, the Codes of Ethics of all professional organizations and in any book that covers the topic of practice management. The emphasis is most often on clear communication and informed consent in regard to the fee structure. The fee itself, method of payment, role of third party payment and frequency of billing has been emphasized in the literature. Additionally, therapists have been encouraged to be flexible in their fee setting and to allow some pro bono appointments for those who cannot afford therapy.
Like time and space, the therapist’s fee is a basic parameter that defines the therapeutic relationship, differentiating it from social, romantic or other non-professional relationships. Money is the most obvious parameter that defines the business aspect of therapeutic relationships. Fees are considered a boundary issue in psychotherapy along with space, gifts, self-disclosure, home-based therapy, home office and dual relationships (e.g., Gutheil and Gabbard, 1993; Zur, 2004, 2007).
Most Common Ways to Structure the Fees in Therapy:
This is probably the simplest and clearest arrangement for fees in therapy. The therapist is paid his or her full fee, as stated in the Office Policies.
Sliding scale is a very common fee arrangement. It allows clients to pay what they can afford in a flexible individually tailored way. Some agencies and public and other clinics provide a standard chart where clients insert their income and expenses and calculate the therapy fee. The concern with sliding scale is that it can put therapists and clients in a conflict of interest where clients may have an investment in presenting a scaled down financial picture in order to obtain a lower rate. If this negotiation takes place at the beginning of therapy, it can undermine the therapeutic relationship. Some factors, such as retirement investments, expected inheritance, etc. cannot be easily factored into the equation of sliding scale. Regardless of what the arrangement is, it is important that therapists try to come to a fee agreement as soon as possible to the start of therapy.
Many ethicists and authors have advocated that therapists devote part of their practices to a no or very low fee client. Besides having a no-fee arrangement with poor clients, many institutions, such as Veterans Administration, correctional facilities and training sites, provide free therapy.
Third Party Payment:
Third party payments most often represent partial payment for therapists who agree to serve on insurance or managed care panels in exchange for lowering their fees. Most insurance and managed care companies require some amount of co-pay, where clients must pay directly to the therapists a fixed amount which is in addition to the payment therapists receive directly from the insurance company.
Bartering, generally defined, is the exchange of goods and services. It has been part of humankind’s culture since our beginnings, thousands of years before gold, silver or other forms of money were introduced. Bartering in psychotherapy and counseling is the acceptance of services, goods or other non-monetary payments from clients or patients in return for psychological or counseling services. Koocher (Koocher & Keith-Spiegel, 1988) suggested that perhaps because of the history of bartering in our society, bartering often has a magnetic appeal. Bartering for Goods is the exchange of goods, such as rice, sculpture or vegetables for therapy. This form of payment is more popular in agricultural and rural communities and with cash-poor and talent-rich artist-patients. Bartering for Services is the exchange of services, such as billing, auto repair or painting for therapy. All bartering arrangements are boundary crossings. While bartering for services is always dual relationships, bartering for goods is mostly only boundary crossing. Bartering for goods, especially if full market valued can be assessed, is often viewed as less complicated than bartering for services, which create dual relationship situations. The latter can be complicated if the clients did less than a satisfying painting job or if the car engine blew up right after the client’s work on the car. Extensive article on bartering
Sometimes patients lose their jobs, homes or health insurance, get sick or are faced with unexpected new financial burdens. It is important that therapists are open and flexible to adjusting the fee arrangements to accommodate changes in clients’ lives. Less common are the cases in which therapists and clients come to an agreement at the beginning of therapy where the therapists’ fee fluctuates with clients’ income or ability to pay. Such agreements may include variations of the amounts and methods of payments. For example, a patient who just got a full-time, temporary, well paid job will pay a full fee. When the job ends, the patient pays only 50% of the full fee for the first few months, and thereafter the patient may pay with agreed upon artwork.
* * * * *
There is a prevalent view among therapists that clients who pay more for therapy value it more and are likely to benefit more from it. Cultural idioms such as “You get what you pay for!” or “There is no free lunch!” are examples of this attitude. Some go further and suggest that the higher the financial and other sacrifices that clients make for therapy, the more likely they are to gain from therapy. These self-serving beliefs are not conclusively supported by research. Some research has shown that those patients who are engaged in no-fee therapy neither value it less not gain less than those who pay or even those who pay full fee.
Some of the commonly cited ethical and legal concerns with fees have been mis-diagnosis in billing and not reporting procedure codes accurately in billing. The most often cited concern is the use of the individual code for couple or family sessions in situations where only individual therapy is reimbursable by insurance.
Fees can be an important clinical consideration and, when appropriate should be explored with the client. Different fee arrangements have different meaning for different clients. For example, some cash poor clients welcome a no-fee arrangement; others may feel indebtedness, while others may prefer a bartering arrangement to a no-fee arrangement. Providing low fee therapy for active drug addicts can be viewed as collusion and can be counterclinical. Over-spenders or hoarders are likely to have different views of the money spent on therapy. Men and women may also differ in their attitude towards the fees and so do clients of different ages, generations, cultural backgrounds and geographical locations. The difference in attitudes towards money are often most apparent in couple therapy (Mellan, 1994; Needleman, 1994). Exploring the meaning of money with clients and their resulting attitude towards the therapeutic fee can be clinically valuable with some clients but definitely not all. As with any intervention and treatment plan, the discussion of money should be carried only when appropriate, relevant and, most importantly, can increase clinical efficacy. Different theoretical orientations sometimes guide the type and extent of discussion regarding fees. Psychodynamic psychotherapists are more likely to focus on unconscious and transferencial and countertransferencial dynamics regarding fees. Feminist therapists may focus on justice issues and reducing the power differential between therapists and clients by reducing the fee (Zur, 2007).
At the beginning of therapy, therapists and clients must be clear about the fee schedule and how late payments are handled. Due to changes in economic status or for emotional reasons, some clients fall behind in their payments and start accruing unpaid bills. Not collecting fees in a timely manner and allowing a client’s debt to accumulate have been frequently cited as clinical or ethical boundary concerns. The primary concern is that if a client’s debt grows without the therapist openly discussing the problem, negotiating and revising the original fee agreement or agreeing upon a new payment schedule, can negatively affect the clinical process. Do not accumulate debt unnecessarily. Large debts by clients tend to be clinically very tricky and burdensome. If you do let a client accumulate debt, document the reasons (e.g., patient’s house is on the market) and consult in complex cases. Negotiating a new fee or payment schedule must not only be discussed and agreed upon with clients but also documented in the treatment records. Similarly, forgiving a client’s debt should be handled with clinical sensitivity, and its rationale should be documented in the treatment records.
Calling on a collection agency to collect unpaid bills is an option, albeit not a recommended one. The original fee discussion should indicate that clients must be notified beforehand that a collection agency may be employed if they do not pay their bills. Therapists have been strongly advised to try to come to a mutually satisfactory agreement with clients prior to engaging a collection agency. Risk management experts accurately warn that involving a collection agency may lead to a licensing board complaint by the client and, therefore, strongly advise against it.
Therapists loaning money to clients, clients loaning money to therapists or financial gifts by either one are additional, challenging ethical, clinical and legal issues as they involve additional business or financial dual relationships between therapists and clients. Such secondary relationships can be highly complicated as they can lead to a conflict of interest situation and interfere with the clinical process. Some codes of ethics clearly declare such practices as unethical. If therapists choose to engage in such relationships, they should carefully review the codes of ethics, conduct “in full daylight” and consult with attorneys and experts to make sure that they are operating within the standard of care.
HIPAA has introduced many new complexities in regard to the standard of care and billing. It is the opinion of the author of this article that every clinician should be HIPAA compliant because HIPAA is becoming the standard of care. For a list of Eight Reasons for ALL Therapists to Become Compliant go to https://www.zurinstitute.com/hipaa.html#reasons. Even under HIPAA, therapists can conduct a fee-for-service practice and avoid electronic and most other billings.
Fee splitting, or what is better known as a “kickback”, is a practice where a referral source gets a fee for their services. While common in medicine, business and law, it is more complex in mental health. This is an ethical concern as it indirectly draws a third party into the therapeutic relationship and can also create a conflict of interest. Many codes of ethics sanction such practices.
Money in our culture is a highly potent issue and, correspondingly, the matter of fees in therapy is a highly emotional issue. While agreement, informed consent and regular communication is extremely important, the metaphor and meaning that money has for different clients must be taken into consideration in all financial dealings with them. This is especially true with clients with boundary problems, those who historically view themselves as victims, litigation prone clients and those with a history of emotional entanglements around money issues. Therefore, any fee agreement, especially when it varies from the standard full fee, must be handled with professional, clinical and ethical sensitivity and consideration for the individual attitude to money complexities of that specific client (Zur, 2007).
One of the biggest obstacles for therapists handling fees and money issues appropriately with their clients is their own attitude towards money. Many clinical and ethical complications stem from therapists mishandling money due to their ambivalence about money issues and lack of training and education on how to handle it. It is therefore very important that therapists explore their own attitudes towards money. They should look at the cultural attitude, their role model and issues of gender and philosophy of life. This course introduces a series of questions that may help therapists identify their role models and difficulties in regard to their relationships to fees in therapy.
- Author, 2005: Psychotherapy and prostitution: A dialogue. Retrieved on July 1, 2005 from http://www.uea.ac.uk/~j339/Gestaltmoneyforlove.htm#_edn3
- Freud S: On beginning the treatment (1913), in The Standard Edition of the Complete Psychological Works of Sigmund Freud, vol 12, translated and edited by Strachey J. London, Hogarth Press, 1958 , pp 123-144.
- Gutheil, T. G., & Gabbard, G. O. (1993). The concept of boundaries in clinical practice: Theoretical and risk-management dimensions. American Journal of Psychiatry, 150, 188-196.
- Koocher, G. P., & .Keith–Spiegel, P. (1998). Ethics in psychology: Professional standards and cases (2nd edition). New York: Oxford University Press.
- Mellan, O. (1994) Money Harmony: Resolving Money Conflicts In your Life and Relationships, Walker and Co.: New York.
- Needleman, J. (1994) Money and the Meaning of Life, New York Doubleday Books, 1994.
- Zur, O. (2004). To Cross or Not to Cross: Do boundaries in therapy protect or harm. The Psychotherapy Bulletin, 39 (3), 27-32, 2004.
- Zur, O. (2007). Boundaries in Psychotherapy: Ethical and Clinical Explorations. Washington, DC: American Psychological Association.