Attorney Articles | Avoid Legal and Ethical Problems Develop Good Practice Habits

Articles by Legal Department Staff

The Legal Department articles are not intended to serve as legal advice and are offered for educational purposes only. The information provided should not be used as a substitute for independent legal advice and it is not intended to address every situation that could potentially arise. Please be aware that laws, regulations and technical standards change over time. As a result, it is important to verify and update any reference or information that is provided in the article.

Avoid Legal and Ethical Problems Develop Good Practice Habits

This article examines a number of key legal and ethical issues which are a part of everyday clinical practice and discusses the importance of developing good practice habits in order to avoid disciplinary actions, lawsuits, and ethics complaints.

Avoid Legal and Ethical Problems Develop Good Practice Habits

Michael Griffin, JD, LCSW 
Staff Attorney
The Therapist
March/April 2015

Therapists are expected to be familiar with the laws, regulations, and ethical codes that apply to their professional conduct. The primary reason for this is simple but incredibly important: Clinicians who fastidiously comply with legal and ethical standards in their day-to-day practice are less likely to encounter disciplinary actions, lawsuits, and ethics complaints.

Generally speaking, therapists enjoy a considerable degree of autonomy when acting in their professional roles: They are free to evaluate their clients’ needs and to employ the type of therapeutic approach that they deem appropriate. However, legal and ethical requirements apply to all therapists, and there are some things that therapists should always do, as reflected in the following examples.1

Establish the fee and responsibility for payment, prior to treatment2 3
It is not uncommon for the Board of Behavioral Sciences (BBS) or the CAMFT Ethics Committee to receive a complaint from an individual concerning the issue of fees. Therapists can reduce the likelihood of encountering problems in this area by thoroughly discussing any and all fee-related issues with their clients from the start and by maintaining clear communication with clients as issues arise.

It isn’t hard to overlook some aspect of fees at the start of treatment, especially if the client arrives in crisis, or if more than one person is involved in the diagnostic process. The therapist may also feel a sense of urgency in responding to the client’s emotional distress before doing anything else. In addition, the client may resist talking about the subject of fees, preferring to engage the therapist in a discussion of his or her immediate concerns. However, regardless of the circumstances, the issue of fees must always be addressed before providing services to the client. This includes all aspects of the fee arrangement; including policies concerning canceled or missed appointments, and the use of health care insurance as a form of payment.4

Clarify insurance plan benefits and limitations5
The need for clear communication with clients regarding the issue of fees and the responsibility for payment is especially true when the client is utilizing his or her health insurance to pay for services. As there are numerous types of insurance plans, with varying benefits and eligibility rules, it is easy for misunderstandings to occur.

Therapists who accept insurance for payment, whether they are contracted with the insurance plan or “out-of-network,” are urged to verify plan benefits at the earliest opportunity. It is also a good idea to recommend that clients contact their insurance plans to double-check their eligibility and scope of coverage. Clients often become upset when they ultimately discover that their insurance plan has a large deductible, and that they are responsible for payment of the entire fee. In some situations, the client may not realize that his or her insurance plan does not cover the cost of services provided by therapist who isn’t contracted with the plan.

Clients may also be unaware of the fact that their insurance plan probably does not cover services that are rendered by a pre-licensed therapist. In a private practice setting, when services are to be provided by a pre-licensed individual, it is extremely important that the client be apprised of the fact that his or her health insurance may not provide reimbursement.

Promptly address payment-related issues 
Should problems arise concerning the client’s fee, the therapist should attempt to address and resolve the issue at the earliest possible opportunity. For example, while it is not unusual for a client to encounter a financial problem, or to request a lower fee for a period of time, it is inadvisable to permit a client to accumulate a large debt over the course of several sessions. When that occurs, there is a significant likelihood that additional problems will occur. Furthermore, the client may also contend that the therapist effectively “waived” the fees in question, by failing to demand payment over an extended period of time.

Ultimately, it is recommended that the client record contain a clear written fee agreement, which contains the relevant office policies regarding the topic of fees, missed sessions, cancelations, health insurance, and any related issues.

Practice within your scope of competency Every professional is required to practice within the scope of his or her competency, which is based upon his or her education, training and experience.6 7 Consequently, in every case, the therapist has to determine whether he or she is the right therapist for the client.

It is important for the therapist to consider whether the clients’ problems and concerns coincide with the skills and abilities of the therapist. The treatment record should reflect the fact that the therapist is competent in his or her treatment of the client.

No therapist is qualified to work with every client or to provide therapy for every issue and it is up to the clinician to discern whether he or she possesses the requisite skills and abilities to provide effective treatment to an individual. When such is not the case, the therapist is expected to refer the individual to another therapist, or to recommend treatment resources, which are more appropriate to the person’s needs.

Seek consultation when necessary 
When problems arise, it is often extremely helpful for therapists to consult with other professionals. The fact that the therapist sought consultation regarding the treatment of his or her client should be documented in the treatment record, as it helps to reflect the prudent and responsible actions of the therapist, under the circumstances.

As it may be difficult to find a qualified consultant at a moment’s notice, therapists are advised to develop a network of trusted colleagues who are willing to offer the benefit of their experience when necessary.

Maintain appropriate professional boundaries 8 9 10 11 
No therapist sets out to develop a relationship with his or her client that will lead to problems, but nearly every list of disciplinary actions taken by the Board of Behavioral Sciences includes one or more cases involving a lack of professional boundaries between the therapist and his or her client. In order to avoid such a scenario, the fundamental principal for a therapist to remember is that the therapeutic relationship exists for the sole benefit of the client. When a therapist allows his or her relationship with a client to sway from that primary purpose, (whether intentionally or otherwise), there is often a failure on the part of the therapist, to maintain clear and appropriate professional boundaries with the client.

Problems with professional boundaries often arise in the context of a dual-relationship involving the therapist and his or her client. According to the CAMFT Code of Ethics, a dual relationship occurs when a therapist and his/her patient engage in a separate and distinct relationship either simultaneously with the therapeutic relationship, or during a reasonable period of time following the termination of the therapeutic relationship. Dual relationships are not unethical, per se, unless there is a corresponding conflict of interest, but they are generally avoided, if possible, because they pose a risk of creating a conflict of interest.

Some examples of unethical dual relationships include engaging in a joint business venture with a client and hiring the client to provide a particular service. Another example of a potential unethical dual-relationship involves circumstances where the treatment takes place over a long period of time without identifiable goals, and the client and his or her therapist frequently talk about the therapist’s life, and/or meet at locations outside of the office without a clear reason for doing so, In these instances, the therapeutic relationship may seem more like a personal friendship than a therapistclient relationship.

Create and maintain a proper treatment record 
The treatment record is a formal recording of the assessment and treatment rendered to a patient by his/her therapist. Therapists have a fair amount of latitude in their method of recordkeeping. California law expresses the general requirement that a therapist maintain a treatment record that would be typical of other, reasonable and prudent therapists. According to the California Business & Professions Code, a therapist may be charged with unprofessional conduct for the “Failure to keep records consistent with sound clinical judgment, the standards of the profession, and the nature of the services being rendered.”12

The CAMFT Code of Ethics expresses a standard using similar language to that which is found in the Business and Professions Code, requiring therapists to create and maintain patient records, whether written, taped, computerized, or stored in any other medium, in a manner that is consistent with sound clinical practice. 13

Utilize progress notes to document treatment 
Progress notes are brief, written notes in the client’s treatment record, which are produced by the therapist to describe his or her work with a client. Without them, it would be difficult, if not impossible, for a therapist to create a health care record, which reflects his or her sound clinical judgment, the standards of the profession, and the nature of the services being rendered.14

By completing a written progress note for each and every therapeutic session, the therapist is able to convey his or her exercise of clinical judgment in the case. For example, progress notes may reflect the therapists’ effort to assess the severity of his or her clients’ depression. Furthermore, should the client, or the licensing board challenge a therapist’s conduct, progress notes may help to establish that the therapist was competent, and that he or she acted lawfully and ethically.

When an insurance plan requires a provider to submit evidence of the “medical necessity” for treatment, progress notes may provide evidence of the person’s need for treatment at a particular time. And, in the event of a dispute over the amount or type of services rendered, progress notes may be utilized to substantiate the fact that services were rendered on a given date and that the therapist’s billing accurately reflects the services that were rendered to the client.

Retain treatment records 
Therapists should be aware of the fact that, as of January 1, 2015, California law requires them to retain treatment records for a minimum of seven years from the date therapy is terminated. If the client or patient is a minor, the client’s or patient’s health service records must be retained for a minimum of seven years from the date the client or the patient reaches 18 years of age.15

Appropriately conclude therapeutic relationships 
It is difficult to overstate the importance of an appropriate termination to a client’s treatment. The termination process may help a client to acknowledge the progress that he or she has made in therapy, and has a major impact on the client’s final impressions about his or her experience in working with the therapist. It is no wonder, therefore, that problems with the termination process are often reflected in complaints that are submitted to licensing boards and ethics committees.16 17 Although no single method of termination exists, it is expected that therapists will use sound clinical judgment when terminating a therapeutic relationship. As with any other aspect of treatment, therapists should also consider whether the termination process that is planned for the particular client is consistent with the relevant standards of care pertaining to the treatment of that individual.

Clarify the status of treatment 
It is important to ensure that the treatment record reflects whether an individual is, or is not, a current participant in therapy. This is no small matter: If the person is a current client, the therapist continues to be responsible for meeting the standards of care, which apply to the treatment of the individual. If the person is not a current client, the therapist does not have a continued “duty of care” to him or her.18 While all of this may seem perfectly obvious, the fact is that it is not always clear to some therapists whether a person is, or is not, a current and active client.

On occasion, a therapist may remark that his or her client has failed to attend several therapy sessions or that his or her client declared that he or she intends to “take a break” from treatment. In this situation, the therapist cannot state with any certainty whether he or she is currently serving as the client’s therapist. The problem is, unless the therapist can unambiguously say that the clients’ treatment has been terminated, there is a chance that the therapist has a continued responsibility to the individual, because the therapist-client relationship has never ended.

It is up to the therapist to clarify with his or her client(s) whether treatment is, or is not continuing. Depending on the circumstance and the therapist’s clinical judgment, this may mean that the therapist will need to contact the client and insist on a face-to-face meeting with him or her or, a telephone conversation to clarify the matter. The therapist is free to recommend that the client continue in treatment, or that termination be conducted, depending on the circumstances. If a client declines further treatment, or if he or she fails to communicate with the therapist, the therapist should attempt to inform the client, in writing if possible, that the client’s therapy will be considered as concluded as of a specified date.

Develop good practice habits 
Most of the legal and ethical problems that therapists are likely to encounter in clinical practice are avoidable. By developing, and following, clear procedures related to issues such as fees, scope of competency, professional boundaries, and documenting the treatment record, most issues can be easily managed in day-to-day practice.

Michael Griffin, JD, LCSW, is a Staff Attorney at CAMFT. Michael is available to answer member calls regarding legal, ethical, and licensure issues.


1 This discussion is intended to provide information about the general application of legal and ethical standards to common circumstances. While the laws, regulations and ethical standards and recommended actions that are discussed in this article have broad application, every situation is unique, and the actions that therapists take are impacted by the client’s needs, and the relevant facts and circumstances. This discussion is not intended to provide an accounting of every relevant legal or ethical standard and therapists’ are advised to consult the ethical standards that are established by their professional organizations.

2 §4982(n) of the Business and Professions Code requires a therapist to inform the client or prospective client, prior to the commencement of treatment, the fee to be charged for the professional services, or the basis upon which that fee will be computed.

3 §9.3 of the CAMFT Code of Ethics provides that marriage and family therapists disclose, in advance, their fees and the basis upon which they are computed, including, but not limited to, charges for canceled or missed appointments and any interest to be charged on unpaid balances, at the beginning of treatment and give reasonable notice of any changes in fees or other charges.

4 See, Tran-Lien, Ann, JD, “Ten Reminders for Therapists about Fees,” The Therapist, May/June, 2014

5 See, Griffin, Michael, JD, LCSW, “On Ethics: Avoiding Problems with Fees, Payment Agreements and Health Insurance,” The Therapist, March/April, 2012

6 §1881, Code of Reg?s. Unprofessional Conduct The board may suspend or revoke the license of a licensee or may refuse to issue a license to a person who: (g) Performs or holds himself or herself out as able to perform professional services beyond his or her field or fields of competence as established by his or her education, training and/or experience.

7 §3.9, CAMFT Code of Ethics, Scope of Competence: Marriage and family therapists take care to provide proper diagnoses of mental and emotional disorders or conditions and do not assess, test, diagnose, treat, or advise on problems beyond their level of competence as determined by their education, training, and experience. While developing new areas of practice, marriage and family therapists take steps to ensure the competence of their work through education, training, consultation, and/or supervision.

8 See, Jensen, David, JD, “Unlawful and/or Unethical Dual Relationship? A Word to the Wise,” The Therapist, Sept/Oct, 2005

9 §1.2 CAMFT Code of Ethics, Dual Relationships: Marriage and family therapists are aware of their influential position with respect to patients, and they avoid exploiting the trust and dependency of such persons. Marriage and family therapists therefore avoid dual relationships with patients that are reasonably likely to impair professional judgment or lead to exploitation. A dual relationship occurs when a therapist and his/her patient engage in a separate and distinct relationship either simultaneously with the therapeutic relationship, or during a reasonable period of time following the termination of the therapeutic relationship. Not all dual relationships are unethical, and some dual relationships cannot be avoided. When a concurrent or subsequent dual relationship occurs, marriage and family therapists take appropriate professional precautions to ensure that judgment is not impaired and that no exploitation occurs.

10 §1.2.1, CAMFT Code of Ethics, Unethical Dual Relationships: Other acts that would result in unethical dual relationships include, but are not limited to, borrowing money from a patient, hiring a patient, engaging in a business venture with a patient, or engaging in a close personal relationship with a patient. Such acts with a patient’s spouse, partner or family member may also be considered unethical dual relationships.

11 Various professional associations have similar, but not identical definitiions of unethical dual relationships. Relationship with a person during a reasonabler period of time following the termination of his or her therapy may be considered a type of dualrelationship, other ethical codes may differ.

12 §§4982(v); 4992.3(t) and 4990.90(v). Bus.&Prof. Code (applicable to marriage and family therapists, clinical social workers, and professional clinical counselors)

13 §3.3, CAMFT Code of Ethics

14 See, Griffin, Michael, JD, LCSW, “On Writing Progress Notes,” The Therapist, March/April, 2007

15 §4980.49, 4992.10, 4999.75, Bus. & Prof. Code (As of Jan. 1, 2015, applicable to marriage and family therapists, clinical social workers, and professional clinical counselors). Health service records may be retained in either an electronic or a written format.

16 §1.3.1, CAMFT Code of Ethics, Termination: Marriage and family therapists use sound clinical judgment when terminating therapeutic relationships and do so in an appropriate manner. Reasons for termination may include, but are not limited to, the patient is not benefitting from treatment; continuing treatment is not clinically appropriate; the therapist is unable to provide treatment due to the therapist’s incapacity or extended absence, or in order to avoid an ethical conflict or problem.

17 See, Griffin, Michael, JD, LCSW, “Parting Ways: Anticipating and Avoiding Problems Which Commonly Occur During Termination,” The Therapist, Nov/Dec, 2011

18 A legal duty is an obligation, recognized by the law, which requires a person to conform to certain standards of conduct. Black, H.C. (2009) Black’s Law Dictionary, St. Paul MN: West.