Ann Tran-Lien, JD
Staff Attorney

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Therapists often have questions regarding fees, such as whether fees can be raised and how to collect unpaid balances from clients. The following reminders are intended to help therapists exercise care in managing fee policies to comply with legal and ethical standards and to minimize the possibility of fee-related disputes.

1 Prior to rendering services, provide clients with disclosures regarding fees for services as required by law and ethical standards.
The BBS requires therapists to disclose to a 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.¹ Furthermore, Section 9.3 of the CAMFT Code of Ethics states, “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.”

Although not legally required, it is recommended that fee disclosures be written. Your policies regarding fees may be presented in your Disclosure of Services Statement, Informed Consent Form or a separate fee agreement, which the client acknowledges and signs. The disclosure should include your usual and customary fee; how fees may be raised; information regarding insurance billing; policies on fees for cancellation and missed sessions; and acceptable forms of payment. This ensures clients are fully aware of your fees and any policies concerning fees.

Be clear about your fee-related policies. If you provide the disclosures in writing, make sure you take the time to discuss each policy with the client, especially policies regarding charges for missed and canceled sessions. If you fail to disclose such policies to your client at the outset of treatment, it is recommended that you not charge your client for a missed or canceled session.

Think of your practice and the needs of your clients. If there are items that need to be billed outside of therapy sessions, you should consider including those items and the associated fees in the client’s fee agreement. If you intend to charge a client any professional service not fully described in your fee agreement, such as writing a report or appearing at a deposition, you should discuss with your client in advance and ensure the client agrees to the fee before the client is charged for the service. It is prudent to document this discussion and the actions taken.

2 Make sure advertisements that include your fees are in compliance with California law.
Any advertisement for professional services that includes your fees must be exact, without the use of words or phrases, including, but not limited to, “as low as,” “and up,” “lowest prices,” or other similar words or phrases. The law states that price advertising must not be fraudulent, deceitful, or misleading, including statements or advertisements of discounts or premiums, or any statements of a similar nature. The fee for each service must also be clearly identifiable.2 Advertisements include, but are not limited to, websites, flyers, signs, social media profiles, brochures.³

3 It is important to communicate your policies and procedures regarding insurance reimbursements with clients prior to rendering services.
Many therapists are contracted providers for insurance plans. Those who are not contracted providers typically produce a “superbill” so the client can seek reimbursement from the insurance plan directly.⁴ Your policies regarding insurance billing should be clearly stated in your fee agreement, Informed Consent Form, or Disclosure of Services Statement. If you are a contracted provider, your written fee policy may include information about your contracted fee schedule; your billing procedures; and the client’s co-payment, if any. If you are not a contracted provider, your fee agreement may state your policies regarding insurance billing and payment, such as, who is responsible for verifying eligibility and benefits; when payment is collected; and when and how superbills are offered. The fee agreement may also specify that the client is responsible for paying for the service rendered, regardless of whether or not the insurance plan actually reimburses.

A common issue regarding insurance reimbursements is whether Registered Interns can bill for insurance when working under supervision of a licensed professional. California’s Freedom of Choice laws do not mandate that services of Registered Interns be reimbursed, so it is unlikely insurance companies will reimburse for services rendered by Interns.⁵ If requested, the Intern may submit claims on behalf of clients or provide a claim form to clients to seek reimbursements for services rendered by the Intern. According to Section 9.6 of the CAMFT Code of Ethics, therapists “represent facts regarding services rendered and payment for services fully and truthfully to third-party payers and others.” Therefore, if a claim form is submitted, it should clearly indicate the Intern as the provider of services and both the supervisor and the Intern should sign the claim form. A cover letter may also be attached to the claim form pointing out that the services were provided by the Intern who is registered and under supervision.

It is important for clients to be informed that his or her insurance plan may not provide reimbursement for the treatment provided by the Intern. It is best practice to disclose this information in detail to the client at the outset of treatment and to present it in the Disclosure of Services Statement, Informed Consent Form or in a separate fee agreement. Clients may not be aware of this fact and it is the Intern and employer or supervisor’s responsibility to articulate this information to clients.

4 Familiarize yourself with the antitrust laws so you do not inadvertently violate them by discussing fees with other independently practicing therapists.
The Sherman Act and the Cartwright Act are federal and state antitrust laws that prohibit two or more otherwise independent actors engaging in concerted activity to restrain trade or competition. What do antitrust laws have to do with therapists and fees? First, concerted activity occurs when there is an agreement between independently practicing therapists. Second, courts have concluded fixing fees is a restraint of trade. Hence, independently practicing therapists who agree to set certain fees for their professional services would be violating antitrust laws. The agreement does not have to be formal or in writing. An understanding between two or more therapists that leads to parallel conduct can be sufficient to raise antitrust concerns.

The following are examples of an agreement or understanding between therapists that would generally constitute fee-fixing that may trigger antitrust scrutiny:

Four independently practicing therapists have an understanding with one another to charge the same fees for psychotherapy sessions. A written agreement does not exist, but the therapists have informal discussions concerning fees every six months, and all therapists charge the same fees.

Two separate therapy professional corporations agree to have matching sliding fee scales for their psychotherapy services.

A group of independently practicing therapists agrees with one another to raise their fees by ten percent.

Concerted activity does not occur when joint conduct is taken by therapists who are owners or employees of a completely integrated therapy business entity, such as a professional corporation. Therapists in such business entities are not independently practicing and do not have independent competing business activities, hence, their practices are integrated into the business entity. In other words, if you co-own a therapy professional corporation with another therapist, you and your partner can discuss and agree on the corporation’s fees.

The key is to exercise independent judgment when making decisions about fees. It is important for therapists to take steps to avoid even the appearance of collusion with another therapist, as what may appear as harmless discussions regarding fees can lead to allegations of antitrust violations. You may scan the advertisements of other therapy practices, as well as public surveys regarding other therapists’ fees to determine your fee structure, but fee setting decisions must be made individually and not in concert with other therapists.⁶

5 It is unlawful to require a client who uses a credit card to pay a surcharge.
Under California law, retailers and service providers, including health care providers, cannot impose a surcharge on a cardholder who elects to use a credit card to pay for products or services.⁷ Therefore, therapists may not require clients to pay an additional fee when they are paying with a credit card. The law does allow for the retailer or service provider to offer a discount for the purpose of inducing payment by cash or check. Nevertheless, therapists should determine whether it would be ethical or clinically appropriate to offer a discount to clients for this purpose.

6 Consider the legal and ethical implications when faced with a request from a client to barter for therapy services.
While bartering services is not prohibited by law or ethical standards, it is not generally encouraged. You should exercise good judgment when faced with a situation in which clients are requesting to barter for therapy services. According to Section 9.5 of the CAMFT Code of Ethics, “Marriage and Family Therapists ordinarily refrain from accepting goods, services, or other non-monetary remuneration from patients in return for professional services. Such arrangements often create conflicts and may lead to exploitation or distortion of the professional relationship.” Consider the difference between allowing a client to pay for a session hour with gardening work and allowing a client to pay for a session with bags of vegetables equal to the therapist’s hourly rate. Also consider whether the barter could potentially lead to exploitation of the client or impairment of the therapist’s judgment. Seeking clinical and legal consultations in these situations is highly advisable.

7 Avoid accepting fees or paying for the referral of professional clients.
It is unlawful and unethical for therapists to offer or accept payment for referrals, whether in the form of money or otherwise.8 A conflict of interest or exploitation of this nature could harm a client.

A therapist who terminates his or her employment relationship may find his or her former employer demanding a certain percentage of fees for services provided to clients who continue with the therapist in his or her new practice. Such contractual provisions may be deemed unenforceable and in violation of the law. Therefore, you should consider seeking legal consultation if you are faced with a similar situation.

8 Take into account certain legal and ethical issues when pursuing collection against a client.
Occasionally, a client, for one reason or another, fails to pay the agreed upon fees for therapy services. As a service provider, you are able to collect unpaid balances from clients, if done so in a diligent manner. You should consider the following if you desire to collect from a client: Which collection route do you want to take? What is the possibility of a client retaliating by filing a claim or complaint against you? Is it worth pursuing the debt?

Section 9.4 of the CAMFT Code of Ethics, provides that “Marriage and Family Therapists give reasonable notice to patients with unpaid balances of their intent to sue or to refer for collection. Whenever legal action is taken, therapists will avoid disclosure of clinical information. Whenever unpaid balances are referred to collection agencies, therapists will exercise care in selecting collection agencies and will avoid disclosure of clinical information.” It is generally recommended that you attempt to settle the matter with the client before taking legal action. Consider contacting the client to discuss feasible financial arrangements that work for both you and the client.

If all attempts fail, the remedies available to a therapist when collecting debt include referring the claim to a collections agency; taking the client to small claims court; or agreeing to mediation. It is important that you provide the client with reasonable notice of your intent to take legal action. For instance, if you choose to forward your client’s claim to a collections agency, you should send a certified letter to the client informing the client of the client’s outstanding balance and the deadline in which your client has to either contact you to discuss financial arrangements or to send payment, and if the client fails to respond, that the client’s claim will be forwarded to collections.

If you want the least time-consuming route and limited involvement on your part, referring the claim to a collection agency may be the route to take. After providing specific information, the collection agency will essentially pursue the debt for you. However, be aware that most collection agencies take approximately 40 percent or more of the collected fees. Make sure the collection agency you choose are familiar with their obligations regarding confidentiality under HIPAA and the Fair Debt Collection Practices Act.

You also have the option to pursue the collection in small claims court. In California, you may file a claim in small claims court if the amount in dispute does not exceed $10,000. Corporations and other entities cannot file a claim for more than $5,000. You will need to file forms with the court, pay a nominal fee, and have someone properly serve the individual you are suing. You can also subpoena any witnesses who can attest on your case. On the date of the hearing, you should bring documentation to substantiate your claim. Although an attorney may help you prepare your case, you must represent yourself at the hearing.

Another option is mediation. Mediation allows you and the client to work out a resolution together and attempt to resolve the dispute amicably. It would usually involve a mediator who will meet with you and the client in a neutral location to facilitate discussion and reach a mutual agreement.

Before pursuing collection, you may want to consider if it is worthwhile to collect. Some therapists have chosen to forego pursuing collection because of the possibility of the client filing a lawsuit or complaint against the therapist as a retaliatory measure.

Also, note that the law and ethical standards do not allow therapists to withhold a client’s records or information solely because the therapist has not been paid for prior professional services.⁹

9 Consider the legal and ethical issues regarding raising your fees for current clients.
Therapists may desire, from time to time, to raise their fees for current clients who are continuing in therapy. According to Section 9.3 of the CAMFT Code of Ethics, therapists are to give reasonable notice of any changes in fees or other charges. Therefore, if you choose to raise fees for continuing clients, you can do so if reasonable notice is given. Nevertheless, it is recommended that clients be informed of your policy about raising fees in writing, at the outset of treatment. This can reduce the likelihood of clients feeling exploited when they are given notice that fees will be increased. This language can be inserted in your fee agreement, Disclosure of Services Statement, or Informed Consent Form. If you anticipate raising your fee in a particular manner, e.g., fees will be raised on January 1 every year at five percent, you may want to consider including the following information: the possibility that the fee may be raised; the percentage the fee may be increased by; how often the increase may occur; and how much notice clients will be given.

10 Be aware of the fees you may charge when dealing with a subpoena or request for records.
Under California law, you may charge certain fees for responding to a subpoena or request for records. When you are responding to a subpoena, the party requesting your records or testimony is responsible for reimbursing you for copying costs or your time.¹⁰ If you have been served with a deposition subpoena for just the production of business records, you should receive a $15 witness fee for allowing a copying service to come to your office to make copies. If you make copies yourself, you are allowed to charge the following: $0.10 per page of your clinical file; reasonable clerical costs incurred in locating and making the records available to be billed at a maximum of $24 per hour, computed on the basis of $6 per quarter hour; and actual postal charges.¹¹

If you are called to testify at a deposition or a court hearing, you will be called as either a percipient witness or a treating-expert witness. A percipient witness provides testimony based on what they perceived with their senses. You are also considered a percipient witness if you are called to simply read your clinical notes. If you are called to give opinion testimony regarding a client you are treating or have treated, including opinion or factual testimony regarding the past or present diagnosis or prognosis made by you or the reasons for a particular treatment decision made by you, you are considered a treating-expert witness.¹² It is important for you to know the role you will play because of the difference in remuneration. A percipient witness is reimbursed $35 per day plus travel expenses. An expert witness is reimbursed at his or her reasonable and customary hourly fee or a daily fee if you are called to be present or to testify all day.¹³ Consider providing the requesting party your fee statement and make sure you are paid in advance of your testimony.

For appearances at criminal trials, including juvenile dependency hearings, you may receive witness’ fees at the court’s discretion. The court may direct the county auditor to pay you $12 a day of actual attendance.¹⁴

If you receive a request for copies of records by a client or a client’s representative, you may charge reasonable fees for copying the clinical file not to exceed $0.25 per page and any additional reasonable clerical costs incurred in making the records available.¹⁵ If you provide a treatment summary in lieu of the clinical file, you may charge no more than a reasonable fee based on actual time and cost for the preparation of the summary.¹⁶

Therapists who typically work with clients involved in legal matters (e.g. court-appointed therapists) should consider including language in their Informed Consent Form, Disclosure of Services Statement or a separate fee agreement that discusses the therapists’ policies and fees for any reports and/or summaries to the court. This will help reduce the possibility of clients feeling displeased and exploited when the therapist provides a fee statement for the court report or summary.

Conclusion
It is essential that therapists communicate with clients their fee and payment policies at the outset of treatment. Maintaining clear written policies about fees and payment will help therapists avoid potential fee-related disputes that could harm the therapeutic relationship, disrupt treatment and lead to complaints and lawsuits.

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Ann Tran-Lien, JD, is a staff attorney for CAMFT. Ann is available to answer member calls regarding legal, ethical, and licensure issues.

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Endnotes
1 Cal. Bus. & Prof. Code §4982(n)
2 Cal. Bus. & Prof. Code §651(c)
3 For further reading on advertising for LMFTs, Interns and Trainees, see “Ten Advertising Mistakes Made by Therapists”, Ann Tran-Lien, JD, Staff Attorney, The Therapist (Mar/Apr 2012)
4 A sample “Superbill” can be found on the CAMFT website at www.camft.org, under Legal Forms in the Resource Center.
5 Cal. Health & Safety Code § 1373; Cal. Ins. Code §§10176, 10176.7, 10177, 10177.8
6 For further reading on antitrust laws and how they affect LMFTs, see “Avoiding Antitrust Problems in Practice”, Ann Tran-Lien, JD, Staff Attorney, The Therapist (Sept/Oct 2012)
7 Cal. Civ. Code §1748.1(a)
8 Cal. Bus. & Prof. Code §4982(o); CAMFT Code of Ethics, Part I, §9.1
9 Cal. Health & Safety Code §123110(g); CAMFT Code of Ethics, Part I, §1.10
10 Cal. Evid. Code §1563(b)
11 Cal. Evid. Code §1563(b)(1)
12 Cal. Code Civ. Proc. §2034.430(b)(2)
13 Cal. Code Civ. Proc. §2034.430(b)
14 Cal. Penal Code §1329(a)
15 Cal. Health & Safety Code §123110(b)
16 Cal. Health & Safety Code §123130(f)