Managing Fee Arrangements

by Kellen Von Houser, M.A.

No Fee and Low Fee Therapy

In the therapeutic community there are ways of dealing with the desire to work with indigent clients who need our services. There is also pro bono work within our own private practice. Though no fees or low fees may be arranged to reduce a client’s financial burden, it is still important to recognize the effect this arrangement may have on the therapeutic relationship. New or beginning therapists may work for free or for lowered fees due to feelings of being inexperienced or inadequate. Though working for a lower fee helps assuage their guilt, it does have consequences, both for the therapist and the client.

  • Free or low fee therapy may represent a test of the therapist’s willingness to collude with a client in effort to foster dependency.
  • Providing free or low fee therapy for a client who is actively using drugs, gambling, overspending, etc. may be viewed as collusion and can be counterclinical.
  • The client may perceive the reduced fee as indicating they are “special” to the therapist in some way. The client may experience pressure to speak or behave in a particular way in order to maintain their special status.
  • Instead of the client interpreting free or lowered fee therapy as meaning they are special, they may assume that they are so despicable it takes someone “special” to work with them. The client may perceive the therapist as being a savior or a rescuer in the absence of payment for services which contributes to idealization of the therapist. This may feed the therapist’s own desire to be perceived as savior or rescuer. Clients may become more submissive or obsequious as a result. Other clients may withhold attendance in an effort to punish the therapist.
  • Free or low fee therapy may also produce feelings of inadequacy, in the clinician, in the client, or in both. The free or low fee may translate in the minds of either party that the therapy is therefore less valuable, or even worthless. Both the client and the therapist may devalue themselves as a result of the belief, “You get what you pay for.”
  • Free or low fee therapy may reinforce beliefs of inadequacy in the client. The client may feel like a charity case or “less worthy” than other clients. They may feel as if the therapist doesn’t believe they are capable of paying regular fees like other clients. They may experience humiliation or a loss of dignity.
  • The client may wish to foster some indebtedness within the therapist. This may allow the client to unconsciously justify a lack of progress in therapy or become submissive or obsequious. They may feel a need to remain “interesting” to the therapist in order to repay the therapist. Clients with a history of sexual abuse may experience feelings of needing to repay the therapist with sexual favors which could fatally compromise the therapeutic alliance. The client may be careful not to “rock the boat” for fear of destroying a good thing or seeming ungrateful. Feelings of indebtedness create an imbalance of power. Therapists may unknowingly exploit this by asking favors from clients which range from inappropriate rescheduling to blatant seduction. Clients may experience feelings of lack of entitlement, fears of burdening the therapist, or a wish to avoid further indebtedness. Feelings of indebtedness on the part of the client can also result in missed appointments or therapeutic stagnation.
  • Indebtedness and imbalance of power may also complicate the termination process. Clients may feel the therapist is making ongoing sacrifices to see them or they need to remain in therapy in order to please the therapist. The indebtedness of a free or low fee arrangement may also cause the client to perceive the termination of service not as a successful completion of therapy, but as the relief of a burden on the therapist.
  • As a reaction against feelings of indebtedness clients may also experience feelings of hostility and make demands on the therapist as a result of an intense sense of entitlement.
  • Other clients may feel the need to create a state of indebtedness toward the therapist.
  • In full fee therapy clients may withhold payment as a way of retaliating against the therapist. They may also use non-payment as a way to intensify the bond with the therapist by holding on to something which belongs to the therapist. Since this option is not available in no fee therapy, clients with this arrangement may miss appointments instead, withholding their presence instead of the therapist’s money in order to punish or purse them.
  • The therapist may experience reactions to the imbalance of power in a relationship of free or low fee therapy. Such reactions may include; subtle exploitation of the client’s complicity or an exaggerated sense of responsibility to the client.
  • The therapist may also use the reduced fee or free therapy as an unconscious (or perhaps conscious) justification to exploit the client in other ways.
  • Free or no fee therapy may be a therapist’s attempt to enhance their own self-image or repress guilt from feelings of inadequacy.
  • If a client insists on free or low fee therapy, it may be an attempt to make the therapist inferior.
  • Free or no fee therapy may be a therapist’s way of feeling superior.
  • Free or no fee therapy may also indicate a powerful countertransference on the part of the therapist.
  • The client may also engage in a projective defense as a result of feeling inadequate. They may adopt the attitude, “What’s wrong with the therapist if he will see me for free?”
  • The therapist might devalue the client as a way of deflecting his or her own feelings of inadequacy.
  • The therapist, choosing to work for free, may foster resentment if this creates a financial burden in his or her life.

Illegal Activities and Fees

When working with clients who are engaging in illegal activities in order to pay their fees (i.e. prostitution, stealing, embezzling, drug dealing) it is important to realize that this may have a negative impact on treatment. The therapist’s acceptance of such monies from the client may unknowingly endorse the client’s behavior. It has been recommended that treatment be postponed until the client can pay for therapy by legitimate means.

Missed Appointments and Fees

Clients miss appointments for many reasons. It might be something as insignificant as transportation problems or difficulty obtaining childcare. Or it might be something significant, such as avoiding processing painful material during critical points in the therapeutic process. It’s important for the therapist to assess the client’s reasons. Whether the therapist distinguishes between these reasons and how they handle absences are fundamental parts of the therapeutic process.

Experienced practitioners give conflicting opinions on how to handle missed appointments. Some argue that there should be a rigid policy regarding missed appointments. They view appointments as leased time that has been reserved for the client and feel the client is responsible for it even if he or she doesn’t use the time.

Other clinicians believe the policy should be more lenient and allow clients not to be charged for missed sessions if there is a legitimate reason for missing. argue for more leniency in handling the situation. They argue the client should not be charged for services which were not rendered. However, this puts the therapist in the position of arbitrating whether the reason for the absence is legitimate or not. It is never possible to be absolutely sure whether a client’s excuse is valid, whether it represents an unconscious resistance, or whether the client is simply lying. This process also allows rooms for the therapist’s biases, including their attitudes toward the loss of income due to the absence and their feelings about the client to affect the decision.

Each therapist has to examine their own beliefs about this issue and be very clear within their own minds as to what their policy is concerning missed appointments – and why.

Criteria for Setting Appropriate Fees

Fees should be set based on the therapist’s credentials, education, licensure, and specializations. They may also reflect the unavailability of the services the therapist provides or the difficulty of the problems which the therapist’s services address. If a therapist is working in an area of specialization where few therapists work their fees may be higher. If a therapist is working with an especially difficult population their fees may be higher.

Ethics and Fees

The issue of fees is addressed clearly in the Codes of Ethics of all professional organizations. They typically address the following issues:

  • Clear communication and informed consent in regard to the fee structure
  • Amount of the fee
  • Method of payment
  • Role of third party payment
  • Frequency of billing
  • 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.

At the beginning of therapy it is important for therapists to clearly communicate the fee structure and their policies regarding fees. Clearly communicating the fee policies can avoid confusion and possibly ethical and clinical complications later in the therapy process. If a client falls behind in their payments and starts accruing a bill due to changes in economic status or for emotional reasons there are certain factors which a therapist should be aware of.

  • 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.

Other ethical concerns involving fees which are discussed in the literature include:

  • Misdiagnosis in billing
  • Not reporting procedure codes accurately in billing
  • Use of the individual code for couple or family sessions in situations where only individual therapy is reimbursable by insurance.

Using Collection Agencies

If a client refuses to pay their bill the therapist has the option of contacting a collection agency as long as the client was notified that this would be the course of action for unpaid bills in the original fee discussion. It is important to have this documented. Though contacting a collection agency is an option, it is not generally recommended. Most authorities in the field recommend that therapists work out a mutually satisfactory agreement with clients if possible. Risk management experts warn that contacting a collection agency may lead to a complaint with the licensing board and therefore advise against it.

Alternative Financial Relationships with Clients

Loaning money to or borrowing money from clients creates serious ethical, clinical and legal issues. Financial gifts by either therapist or client are equally problematic. Such situations create secondary relationships, can impair the therapeutic process, and can result in a conflict of interest. Most ethics codes clearly prohibit such practices.

Referral Fees

The practice of paying a referral source a fee for referring clients is usually prohibited by most ethics codes. It creates a third party in the therapeutic process and can result in a conflict of interest. It is strongly recommended that therapists avoid such practices.
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