Michael Griffin, JD, LCSW 
Staff Attorney
The Therapist
March/April 2017

Part One of “Starting a Private Practice,” published in the November/December issue of The Therapist, offered a broad overview of issues that should be considered when starting a private practice.¹ Part Two takes a closer look at several topics, including: Initial inquiries and requests for service, intake procedures, record-keeping and documentation, fees and insurance-related issues, and key issues when advertising a practice.

Initial Inquiries and Requests for Service 
Every therapist should give some thought about how he or she plans to respond to initial phone inquiries and requests for service. Generally speaking, there is a need to provide some information to the caller and to gather some information regarding his or her needs. It is obviously not possible to know what the therapist and his or her prospective patient will decide after meeting together. The basic goal when responding to the initial phone inquiry is to make a preliminary determination as to the person’s needs and the likelihood that the therapist would be able to assist him or her.

There is not a single formula, but it is recommended that therapists have a consistent approach when speaking to potential clients. Therapists usually want to briefly inquire about the reasons for contacting the therapist. It is also suggested that providers consider how they intend to provide the following information during the initial phone call:

• Location of the office and directions to the location
• Appointments and expectations
• Expected completion of paperwork during, or prior to, the initial visit
• Other information which the therapist may wish to share about him or herself, including, but not limited to, the type of license held, years of experience, etc.

Intake Procedures 
As mentioned in Part I of “Starting a Private Practice,” it is important to develop a fundamental set of procedures that are applicable to every client/patient.² This does not suggest that it is necessary or desirable to adopt a robotic approach to conducting intake interviews. Every therapist has a fair amount of creative latitude in developing the procedures and systems of documentation that will be utilized in his or her practice.

Necessary Forms and Documents

Therapists in private practice should ensure that they have the following forms/documents available for use: (A variety of sample forms are available on the CAMFT website under Practice Resources, at www.camft.org).

• Intake/informed consent/disclosure forms
• Release of information form
• Consent for treatment of a minor
• Financial agreement forms
• Notice of Privacy Practices form (If HIPAA “covered entity”)³
• Forms or lined paper, etc. for the purpose of writing progress notes
• Forms or logs for the purpose of noting payments made
• Superbills for patients if the therapist is an out-of-network insurance provider
• Claim forms (CMS-1500) if the therapist is in-network and not billing electronically

Required Disclosures

California law requires marriage and family therapists to disclose the following information to their patients:

• Prior to the commencement of treatment, information concerning the fee to be charged for the professional services, or the basis upon which that fee will be computed, must be disclosed to the client or prospective client.4 (Further discussed below under financial policies and procedures)
• If the therapist is an intern or trainee, he or she must inform each client or patient prior to performing any professional services that he or she is unlicensed and under the supervision of a licensed mental health professional.^{5 6}
• If the therapy business is conducted under a fictitious business name, it is necessary to inform the patient, prior to the commencement of treatment, of the name and license designation of the owner or owners of the practice.⁷
• The therapist must conspicuously display his or her professional license in his or her place of business. (A copy is acceptable.)⁸

The CAMFT Code of Ethics requires marriage and family therapists to provide adequate information to patients in clear and understandable language so that patients can make meaningful decisions about their therapy.⁹

Optional Disclosures: What do you want clients to know about your practice?

It is interesting to note that section 4980.55 of the Business & Professions Code provides a disclosure requirement that is unique to marriage and family therapists: “As a model for all therapeutic professions, and to acknowledge respect and regard for the consuming public, all licensed marriage and family therapists are encouraged to provide to each client, at an appropriate time and within the context of the psychotherapeutic relationship, an accurate and informative statement of the therapist’s experience, education, specialties, professional orientation, and any other information deemed appropriate by the licensee.”¹⁰ Section 1.5.6 of the CAMFT Code of Ethics expresses identical language regarding this issue.

Therapists are not limited to the disclosures that are mandated by California law. The following is a list of topics which therapist’s commonly discuss in their informed consent/disclosure paperwork for new clients. A therapist is free to discuss the topics that are meaningful to him or her, and may modify or add content to the following list as desired:

• Information regarding the importance of therapist-patient collaboration in the treatment process
• Polices regarding possible termination for lack of attendance or frequent cancellations
• Information concerning the limitations of psychotherapy and that it is not possible to guarantee a particular outcome
• Information concerning the limits of confidentiality, including, but not limited to, mandated disclosures for child, elder and dependent adult abuse, and circumstances involving danger to self or others, etc.
• Information concerning the therapist’s theoretical orientation or treatment approach, and his or her professional background
• Information relevant to the treatment of minors regarding issues such as confidentiality, consent, access to records, and writing reports
• Information regarding the treatment of couples or families, addressing issues such as confidentiality, a “No Secrets Policy,” access to records, and writing reports
• Information regarding the therapist’s policy on writing letters or reports in support of litigation
• Emergency Procedures/Information about the therapist’s availability and how best to communicate

Recordkeeping
It is inconsistent with legal and ethical standards for documentation of treatment to keep “minimal” records¹¹ According to section 4982(v) of the California Business & Professions Code, marriage and family therapists are required 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 similar requirements, including the expectation that therapists document when significant decisions or events occur in a client’s treatment.^{13 14}

Key Elements of a Treatment Record

The treatment record is a formal recording of the assessment and treatment that is provided to a client/patient by his/her therapist. No single formula for documentation exists and the style of documentation that is adopted by a given therapist will depend on his or her preferences and the nature of his or her practice. That being said, it is fair to say that every record should include the therapist’s assessment and treatment plan for the patient, and reflect the therapist’s observations regarding the perceived benefit to the patient, (or lack thereof) of the treatment provided.

Records shall be maintained, in either a written or electronic format, for a minimum of seven years from the date therapy was terminated. If the patient is a minor, the patient’s records shall be retained for a minimum of seven years from the date the client or the patient reaches eighteen years of age.^{15 16}

According to section 2.4 of the CAMFT Code of Ethics, marriage and family therapists store, transmit, and/or dispose of patient records in ways that protect confidentiality. When storing records, it is necessary to secure hardcopies in a locked file cabinet or drawer. If records are maintained in electronic form, access to such records should be password-protected and a backup should be made and stored in a safe and secure manner. For HIPAA covered entities, any storage of records on-line should be done using a company who will provide secure record storage and a “Business Associate Agreement.”¹⁷

Fee-Related Policies and Procedures 
One of the ways that a therapist may encounter a complaint to a licensing board, or to an Ethics Committee, is due to an allegation of wrongdoing concerning payments or fees. Typically, such an allegation involves a contention that the therapist either misrepresented, or failed to accurately inform his or her client as to the amount of the fee, or the expectation of payment in a given circumstance. Fee-related disputes also have the potential to disrupt a client’s treatment, or to undermine the therapeutic progress that was achieved over time.¹⁸ Thankfully, most of these problems can be avoided by the existence of written fee-related policies, and clear communication with patients regarding any and all financial issues.¹⁹

Therapists may feel a sense of urgency in responding to the client’s emotional distress before doing anything else, but the issue of fees must be appropriately addressed prior to rendering services to the patient.²⁰ This includes all aspects of the fee arrangement, such as issues concerning payment by a third party, acceptance of the client’s health insurance, and the amount of payment expected during the first visit, and the acceptable form(s) of payment. At the time of the initial visit, patients should also be provided with clear written policies regarding missed appointments, cancellation fees, and any other payment-related issues that a therapist deems worthy of including.

Furthermore, therapists who provide services to patients who are covered by Medicare should inform those individuals that, presently, services provided by marriage and family therapists are not reimbursed by Medicare. Similarly, when services are to be provided by an Intern or Trainee, it is recommended that the patient be informed of the fact that his or her health insurance is unlikely to provide reimbursement for the treatment provided.

Accepting Health Insurance 
Therapists in private practice have to decide whether or not to accept health insurance as a form of payment. There really is no single determining factor that dictates whether a therapist should, or should not, bill health insurance. When considering this issue, it may help to consider the various pros and cons, which are commonly cited by therapists in private practice when dealing with health insurance:

In general, unless one has an endless source of cash-paying clients, the willingness to bill insurance is a way to increase the number of clients who can afford to receive services. The flip side, of course, is that the more reliant a therapist becomes upon insurance as a source of revenue, the more likely it is that his or her total income will be impacted by insurance reimbursement rates, and that he or she will encounter problems, at least occasionally, involving reimbursement.

Options to Consider

Therapists who contract with an insurance plan have agreed, among other terms, to accept a specified rate amount, depending on the type of services rendered to a patient. If a therapist is not contracted with his or her patient’s insurance carrier, and the plan is a PPO with an out-of-network benefit, the therapist could be paid by his or her patient and provide the patient with a superbill. A superbill is simply a type of receipt, which contains the information that is necessary for the insurance carrier to reimburse the patient for his or her payment to a provider, including: An ICD-10 diagnosis, a CPT procedure code and corresponding date of service for every visit, the amount paid by the patient, the name, address, license type and license number of the provider, and the provider’s federal tax ID number.^{21 22} In addition to the foregoing, it is also recommended that a therapist obtain a National Provider Identification Number (“NPI”) to include on his or her superbill.^{23 24} Information regarding ICD-10 diagnoses, CPT codes, and a sample superbill is available on the CAMFT website under “practice resources,” at www.camft.org.

Another option that a therapist may consider is to bill his or her patient’s insurance plan as an out-of-network provider. In such an instance, it is advisable for the therapist to promptly contact the insurance carrier to inquire about the level of benefits applicable to services provided by an out of network therapist. Circumstances vary, and depending on the plan, it may reimburse a specified amount, or, the level of reimbursement may be based upon a percentage of the “usual and customary” fees, which are charged by like therapists in the geographic area. The therapist and his or her patient must determine the specific amount of any co-insurance or co-payment that is expected from the patient in this situation.

Contracting with Managed Care Companies

Patients who are covered by an HMO insurance plan are generally limited to providers who are contracted with the particular plan. If a patient has what is known as a “PPO” insurance plan, he or she has the option of seeking services from a contracted (“in-network”) provider, or, from an out-of-network (“non-contracted”) provider, usually at a lower level of benefit. The rates that are paid by insurance carriers vary from plan to plan, depending on the policies of the plan, the type of license held by the provider, and the usual and customary fees that are paid to similar providers in the geographic area. In some instances, providers may be able to contract with a health plan to reimburse at a rate that is greater than the customary amount, depending on certain factors, including, but not limited to the therapist’s level of experience, his or her specialties, and the need for such therapists in the geographic area. Generally speaking, plans tend to have minimum experience requirements for joining their networks and there are often many therapists interested in joining a given managed care network, particularly in congested metropolitan areas.

The CMS-1500 Insurance Claim Form

All billing to an insurance company by a health care provider must be done using a standard CMS-1500 insurance form.^{25 26} The CMS- 1500 form is the product of the Center for Medicare and Medicaid of the US Department of Health and Human Services. The form, and instructions for completing the form, is available from the US Government Printing office.²⁷ The CMS-1500 is also available for purchase from numerous private vendors on the Internet.²⁸ (Be sure to purchase the version of the form that was revised on 2/12.)

Electronic vs. Paper Billing

Some insurance plans offer providers the opportunity to submit claims electronically, either through the plans’ own encrypted website, or by using the services of a medical claims clearinghouse. Clearinghouses, such as “Office-Ally,” or “MD OnLine” provide a mechanism for providers to login to their secure website and complete a standard insurance claim form. After ensuring that the claim-form is correctly completed by the provider, the clearinghouse forwards the claim electronically to the patient’s insurance carrier.²⁹ Another company for practitioners to be aware of is “Simple Practice,” which can be found at www.simplepractice.com. Simple Practice offers an array of practice-management tools, including electronic claim filing, client billing services, secure document storage, and various forms for documentation of treatment. These companies comply with HIPAA security standards for the storage and transmission of private health information, and offer HIPAA-covered providers with the required business associate agreement.^{30 31 32} This is important because a provider who submits his or her claims electronically is a HIPAA “covered entity.”³³ Providers who are not “covered entities” and who rarely engage in insurance billing should consider whether the convenience of being able to submit claims electronically is worth having to comply with HIPAA.

Accepting Credit and Debit Cards 
It is possible for therapists to accept credit or debit cards as a form of payment from patients. To do so, it is necessary to have some mechanism for processing cards, or a device that works with a mobile phone or tablet to accept cards and/or other forms of payment using “NFC” (near field communication) such as “Apple Pay” or “Samsung Pay,” etc.³⁴ The process is usually pretty simple, but there are lots of options to consider and no shortage of companies who would like to sell you their technology. One company that is popular among small businesses (including therapists in private practice), which offers a variety of processing options using a standard mobile phone or tablet, is Square. Square accepts all major credit cards at a flat rate of 2.75 percent per swipe, or 3.5 percent plus 15 cents per transaction for manually keyed-in cards.³⁵ After credit or debit payments are made, funds are typically transferred into a merchant’s designated bank account within a day or two. “Simple Practice” also offers credit card processing services to therapists who are interested.

Therapists who elect to accept credit or debit cards for payment should be aware of the fact that, under California law, retailers and service providers, including health care providers, cannot impose a surcharge on an individual who elects to use a credit card to pay for products or services. As a result, a therapist may not require his or her patients to pay an additional fee for the convenience of paying with a credit card.³⁶ In spite of that fact, it does not mean that accepting credit and debit cards is necessarily a bad idea. The use of checks and cash is becoming less frequent over time and the ability to accept payments via credit or debit card is not only a convenience to patients, it avoids the unpleasant (and expensive) reality of a patient’s check returned for insufficient funds, or, an individual stating that he or she is unable to pay due to a “forgotten” checkbook.

Key Advertising Issues 
Legally, advertising includes the use of e-mail addresses, letterheads, and websites, as well as communications by means of mail, television, radio, motion picture, newspaper, book, list or directory of healing arts practitioners, business cards, and office signs.³⁷

When constructing advertising in any form, whether it is a simple business card, a brochure or flyer promoting a professional service, or a professional profile in an online directory, it is important to be aware of the various advertising laws and regulations that apply.³⁸

Required Elements in Advertisements

Licensees and registrants are required to include their license or registration numbers in their advertisements.³⁹ Furthermore, advertisements by an MFT Registered Intern should include the name of his or her employer, and information stating that they are supervised by a licensed therapist.⁴⁰ The use of the abbreviation “MFTI” in an advertisement is prohibited unless the title “marriage and family therapist registered intern” is included in the ad.⁴¹ It is important to note here that, effective January 1, 2018, the title of Marriage and Family Therapist Registered Intern will change to Associate MFT.⁴²

Fictitious Business Names

A licensed marriage and family therapist who conducts a private practice under a fictitious business name (“DBA”) may not use a name that is false, misleading, or deceptive, and is required to inform the patient, prior to the commencement of treatment, of the name and license designation of the owner or owners of the practice.⁴³

Advertising “Specializations”

When advertising him or herself as a “specialist” in a particular issue or type of therapy, the therapist is representing to the public that he or she tends to focus on such issues in his or her practice, and/or that he or she has a degree of training or experience which is likely to be beyond that of a non-specialist practitioner. A therapist who advertises him or herself as “specializing” in one or more areas must exercise caution, and be prepared to offer reasonable support for such representations if challenged by a complaint to a licensing board or an ethics committee.^{44 45}

Advertising Fees

Any advertisement for professional services that includes your fees must be exact, without the use of words or phrases such as:

“ as low as,” “and up,” or “lowest prices.”⁴⁶ Advertising regarding the issue of price must not be fraudulent, deceitful, or misleading in any way.^{47 48}

Deep Breaths! 
Therapists who are starting a private practice may feel initially as if they are faced with a bewildering array of legal and ethical guidelines. But it is important to keep it all in perspective and remember that it takes time to be successful. Private practice can be an enjoyable and rewarding experience. The procedures for operating a practice should, ideally, reflect the particular interests, personality, and expertise of the therapist, while ensuring that legal and ethical standards are consistently met, from the time of the prospective client’s initial phone call to the conclusion of his or her treatment.

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

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Endnotes

¹ Griffin, Michael, JD, LCSW, “Starting a Private Practice-Part One,” The Therapist, Nov/Dec, 2016 
² The terms “client” and “patient” are used interchangeably in this discussion. 
³ 45 CFR 160.103 HIPAA only applies to organizations and providers who qualify as “covered entities.” Covered entities are defined as (1) health plans, (2) health care clearinghouses, and (3) health care providers who electronically transmit private health information (“PHI”) in connection with certain administrative or financial transactions, aka, “covered transactions.” 
⁴ Business & Professions Code, §4982 (n) Prior to the commencement of treatment, failing to disclose to the client or prospective client the fee to be charged for the professional services, or the basis upon which that fee will be computed is unprofessional conduct. 
⁵ Business & Professions Code, §4980.44(c) Prior to performing any professional services, a marriage and family therapist intern must inform each client or patient that he or she is an unlicensed marriage and family therapist registered intern, provide his or her registration number and the name of his or her employer, and indicate whether he or she is under the supervision of a licensed marriage and family therapist, licensed clinical social worker, licensed professional clinical counselor, licensed psychologist, or a licensed physician and surgeon certified in psychiatry by the American Board of Psychiatry and Neurology. 
⁶ Business & Professions Code, §4980.48 (a) 
⁷ Business & Professions Code, §4980.46 
⁸ Business & Professions Code, §4980.31 
⁹ Code of Ethics, §1.5 Therapist Disclosures 
¹⁰ Business & Professions Code, §4980.55 
¹¹ Montgomery, Alain, JD, “Patient Records Under California Law: The Basics,” The Therapist, May, 2015 
¹² Business & Professions Code, §4982(v). The failure to keep records consistent with sound clinical judgment, the standards of the profession, and the nature of the services being rendered is unprofessional conduct. 
¹³ Code of Ethics, §3.3 Patient Records: Marriage and family therapists create and maintain patient records, whether written, taped, computerized, or stored in any other medium, consistent with sound clinical practice. 
¹⁴ Code of Ethics, §1.15 Documenting Treatment Decisions: Marriage and family therapists are encouraged to carefully document in their records when significant decisions are made, e.g., determining reasonable suspicion of child, elder or dependent adult abuse, determining when a patient is a danger to self or others, when making major changes to a treatment plan, or when changing the unit being treated. 
¹⁵ Business and Professions Code, §4980.49 This section applies only to the records of a patient whose therapy was terminated on or after January 1, 2015. 
¹⁶ Griffin, Michael, JD. LCSW, “On Writing Progress Notes,” The Therapist, Mar/Apr, 2007 
¹⁷ 45 CFR 160.103 A “Business Associate” is a person or entity that performs certain functions on behalf of, or offers services to, a HIPAA-covered entity, involving the use or disclosure of individually identifiable health information. 
¹⁸ Griffin, Michael, JD, LCSW, “On Ethics: Avoiding Problems with Fees, Payment Agreements, and Health Insurance,” The Therapist, Mar/Apr, 2012 
¹⁹ Tran-Lien, Ann, JD, “10 Reminders for Therapists About Fees,” The Therapist, Jan, 2014 
²⁰ Business & Professions Code, §4982 (n) 
²¹ “CPT code” stands for current procedural terminology. CPT codes are developed and copyrighted by the American Medical Association. Insurance companies utilize CPT codes to determine the amount of reimbursement owed for specified health care services. 
²² Griffin, Michael, JD, LCSW, “Starting a Private Practice-Part One,” Supra. By applying for an Employer Identification Number (“EIN”) from the IRS, a therapist is relieved from having to utilize his or her Social Security Number as a federal tax ID. One may apply for an EIN on the IRS website at: www.irs.gov. It takes approximately 4-5 weeks to receive the EIN. 
²³ Id. A National Provider Identifier Number (“NPI”) is a 10-digit numeric identifier that is issued by the Centers for Medicare and Medicaid Services (CMS) National Plan and Provider Enumeration System. Providers who are “HIPAA-covered entities,” are required to obtain an NPI. An NPI number is required by insurance companies in order to process electronic claims. It is generally recommended that private practitioners obtain an NPI to avoid potential delays in reimbursement. 
²⁴ Johnson, Anastasia, JD, “Applying for your NPI,” The Therapist, Jan/Feb, 2016; Jensen, David, JD, “HIPAA and the National Provider Identifier: When Was the Last Time You Were Enumerated?” The Therapist, July/August, 2010 
²⁵ See video: “How to bill insurance in an Outpatient Office Setting,” by Johnson, Anastasia, JD, and Ziccardi, Karen, LMFT. Available under “Practice Resources” on the CAMFT website at www.camft.org. 
²⁶ See, “Navigating the Insurance Maze,” by Barbara Griswold, LMFT, at: www.navigatingtheinsurancemaze.com 
²⁷ https://bookstore.gpo.gov/products/sku/017-060-00663- 3?ctid=503. 
²⁸ CMS-1500 insurance forms are available via Amazon.com at: https://www.amazon.com/NEW-CMS-1500-Claim-Forms/dp/ B00HNDPJMQ 
²⁹ `http://coa.org/docs/WhitePapers/Clearinghouses.pdf 
³⁰ 45 CFR 160.103 Supra. 
³¹ The clearinghouse, “Office Ally” is available at: https://cms. officeally.com 
³² The clearinghouse, “MD On-Line” is available at: https:/www. mdon-line.com 
³³ 45 CFR 160.103 Id. 
³⁴ See, Angeles, Sara, “Credit Card Machines: Answers to Frequently Asked Questions,” Internet article, at, http://www. businessnewsdaily.com/8940-credit-card-machines-faq.html 
³⁵ “Square” is available at: https://squareup.com
³⁶ l Code, §1748.1(a)
³⁷ Business and Professions Code, §651 
³⁸ “Tran-Lien, Ann, JD, “Ten Advertising Mistakes Made by Therapists,” The Therapist, March/April, 2013 
³⁹ Code of Regulations, §1811 
⁴⁰ Business and Professions Code, §4980.44(c) 
⁴¹ Business and Professions Code, §4980.44(D)(2) 
⁴² SB 1478 
⁴³ Business and Professions Code, §4980.46 
⁴⁴ Business and Professions Code, §4982(f) Misrepresenting or permitting misrepresentation of one’s education or professional qualifications is unprofessional conduct. 
⁴⁵ Code of Ethics, §10.4 False, Misleading or Deceptive: Marriage and family therapists do not use any professional identification, including but not limited to: a business card, office sign, letterhead, telephone, or association directory listing, Internet, or any other media, if it includes a statement or claim that is false, fraudulent, misleading, or deceptive. A statement is false, fraudulent, misleading, or deceptive if it a) contains a material misrepresentation of fact; b) fails to state any material fact necessary to make the statement, in light of all circumstances, not misleading; or c) is intended to or is likely to create an unjustified expectation. 
⁴⁶ Business and Professions Code, §651 
⁴⁷ Id. 
⁴⁸ Code of Ethics, § 9.3 Disclosure of Fees: 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.

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This article is not intended to serve as legal advice and is 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 this article.