Money Matters in Therapy - Charging Clients, Cancellation Fees, Negotiating and Enforcing Rules

    Money is often an emotion-laden topic that triggers many associations and meanings, for both the therapist and the client. As a therapist starting out in private practice, I had to stumble and fumble my way around decisions regarding setting session fees, enforcing or waiving my cancellation fees and other money matters. I am sharing with you my lessons learnt - and what better way to learn than from mistakes made!

Mistake #1: Adhering to theory or rules, even when it feels "wrong" (i.e., not aligned with my own personal values).

    Something that is ingrained in us therapists, especially for those of us who are trained psychoanalytically, is to "keep the frame" and "set boundaries". Stating and holding clear boundaries within the therapeutic relationship creates safety for the client. This could be translated rigidly into not negotiating around our fee, or enforcing cancellation policies by the rule. However, depending on the client’s situation and their personal history, this can actually backfire, and affect the client and the therapeutic relationship negatively, especially if it is experienced as punitive, shaming, unfair/exploitative or controlling by the client. There has to be some flexibility in all matters to accommodate therapists’ own values and clients’ needs, which translates into a willingness to reconsider session frequency, waiving cancellation fees, or negotiating around the fee on a case-by-case basis. 

Mistake #2: Not examining and having clarity around my own issues with money/fees.

    It is important to examine and have clarity on our own internal conflicts and issues around money matters, as well as to know the limits on our flexibility (e.g., what is the lowest fee that we will be comfortable with for a particular client and their situation?) especially when trying to establish boundaries and set a framework with a client. 

   I had to consider several conflicting needs and values when establishing my regular rate for therapy sessions. I do value my experience, training and what I have to offer as a psychotherapist, and generally, a therapist with a higher fee is often perceived as offering “higher quality” services. At the same time, I think therapy is quite expensive, especially since weekly (or more frequent) sessions are usually recommended. People belonging to lower socio-economic classes face more stressors, therefore making it even more necessary to offer affordable mental health services. In spite of my desire to make my services affordable and accessible, I have a strong aversion to being paneled with insurance companies. With so many competing values, initially I was often riddled with guilt, resentment or doubt as I tried to establish a fee that is “just right”. I have finally found a formula that works for me, embodying the maxim "No size fits all". This uses a combination of a regular rate, sliding scale fees and offering low fee and pro-bono slots via, a non-profit that is committed to making therapy more affordable for low-income families and individuals.  

      Here’s a scenario when I was just starting out in private practice that highlights both Mistake #1 and Mistake #2 mentioned above:

Scenario: Client and I agree on a fee of $120 during the initial free consultation. At the end of the next session, client says she just found out that her insurance does not cover her sessions (she has a very high deductible), and asks for a reduced fee. Since we are already at the end of session (and keeping in mind that I had already provided her with a free initial consultation), I say that she has to pay $120 for this session, and we can work out a lower fee moving forward. She asks for a fee of $80, and I say “That is too low.” (yes, I actually said that, I will have to admit).  Client makes out a check for $120 for the first session. Client does not return to therapy.

What played out in the above scenario, were my own unresolved issues around money, and it negatively impacted the client, unfortunately:

  • I was not completely okay with having provided her with an initial free consultation – I was holding some resentment, or rather, thinking that the client now owes me or is to feel obliged for it.

  • I was unsure about how low I can or should slide my fees. I was conflicted between what I have learnt about enforcing boundaries, and my own flexibility in accepting lower fees. This resulted in me responding “That is too low” for the fee suggested by the client. This was shaming to my client, especially given her history of having grown up very poor.

Mistake #3: Not taking into account client’s culture, history/background and relationship with money.

    What I have seen replayed again and again, is that a client's relationship with money and how they approach the issue of the fee is often an extension of their psychology, and therefore, a clinical issue to be examined in therapy in order to help the client navigate more skillfully around such matters. Sometimes their relationship with money is shaped by culture - I have some clients who are bent on trying to negotiate a lower fee, although they have very high incomes - they cannot imagine paying so much "just" for therapy. Sometimes it is personal history - I had another client who requested a lower fee and I agreed due to her many medical expenses, and then I learn through the course of therapy that this client is a multimillionaire with an inherited fortune. This client, having grown up with financial scarcity and hardship, found it hard to spend or truly enjoy her newfound financial abundance, and she was always looking for "a good deal" or discount. If I, as the therapist, merely see such clients as "manipulative" or if I am offended by their requests, and fail to take into account the client's context and subjective experience, it is a signal for me to look into what is being triggered for me.  I have learnt that I have to be mindful and navigate such issues around money with skill and sensitivity to the client's experience. In other words, letting the client know that I am open to discussing or negotiating the fee, but that it is important for me to first understand more of their history and their subjective experiences and relationship regarding having or not having things.

    Outlined below are my own personal guidelines around money matters in therapy:

  • Rules (such as charging for missed sessions) are set and enforced based on clinical implications and the client's best interest, and not merely from a business standpoint.

  • Own my own issues (including privilege or scarcity) around money, examine my own relationship and views around money, and gain clarity on my limits in flexibility regarding session fees, cancellation policies and other money related issues.

  • A client’s relationship with money (their meanings and associations around money, rather than simply their income or wealth) is an important factor to take into consideration when discussing and setting fees.

  • What works well for one therapist may not work for another. Differences may be due to business goals, theoretical orientation, populations served, and personal style/values.

  • Above all, be authentic.

I am ending with a scenario that was posted in a therapist Facebook group that started me thinking more on this topic and prompted me to write this article. 

Scenario: If a person you were working with needed time off from therapy for a couple of months due to short term schedule conflict, but didn't want to lose their appointment space and they offer to pay for that space until they were able to return (you have no other available appointments), is this ethical? How would you handle this situation?'

The above question elicited some emotionally charged but widely differing responses from the therapist group members. How would you handle this situation?

Please share your thoughts and feedback in the Comments section.