Counseling Today, Private Practice in Counseling

The ins and outs of fee collection

Robert J. Walsh and Norman C. Dasenbrook March 4, 2007

Q: I need some advice regarding collections. I have a few former clients who have outstanding balances. They are not responding to my statements. The amounts are not great, but I realize these clients may not be the only ones, so I am looking for a reputable collections person/company. I don’t even know if I’m stating my need properly as I was with a group prior to my private practice, and this was handled without me being a part of the process. Do you have a suggestion about how to collect? In addition, are there HIPAA concerns about using a collector?

A: For most counselors in private practice, collecting fees is a disagreeable chore. It would be wonderful if each client paid at the time of service and we didn’t have to “chase” our money. After all, we got into this profession to help people. Nevertheless, as we have said many times, it is a business and you are the boss. To be successful, fee collection is essential. Even small amounts of fees owed add up. You deserve to be fairly compensated for your work.

Fee collection starts with your informed consent document. The informed consent is a binding contract between you and your client. Before counseling begins, all charges, fees and debt collection processes are detailed in writing. If you plan to use a collection agency, check your state laws and the codes of ethics of your state and national professional organizations. Some states may treat the use of collection agencies as a violation of confidentiality. If you can use a collection agency (and plan to, if necessary), that needs to be included in your informed consent, as well as who is responsible for the agency fee. 

It is not a HIPAA violation to release information needed for billing and collection purposes. This potential disclosure of information should be in the payment section of the HIPAA Notice of Privacy Practices that is given to the client before counseling begins. Keep in mind, however, that just because it’s not a HIPAA violation doesn’t automatically mean it’s OK. The most restrictive law applies.

To find a reputable collection agency, ask other providers in your area. Collection agencies usually charge a percentage (approximately 30 percent) of the debt owed. That figure can be higher if there is court action. We don’t advise going to court to collect the debt. You don’t want a counter suit that ends up being more expensive than the original debt.

Q: I am a licensed mental health counselor in New York. I am trying to obtain status on insurance panels with some insurance companies. Has ACA formulated any type of relationship with insurance carriers that might assist counselors who would like to become participating providers? I am finding this to be a very time-consuming and challenging task.

A: Managed care and insurance companies do not deal directly with national organizations such as ACA, the National Association of Social Workers or the American Psychological Association. However, ACA has developed a Private Practice Initiative to help its members attempt to get on panels.

Go to the ACA website (www.counseling.org) and click on the “Counselors” section, then click on the “Private Practice Pointers” button. Two different bulletins there may help you.

1) The Provider Relations Contact List for Managed Care and Insurance Panels. This comprehensive list of the top 55 managed care and insurance companies provides direct links to their provider relations departments. This should save you some time.  

2) Managed Care Response Templates. These templates can be used to respond to denials or to help gain access to closed panels. Many counselors have found these letters to be helpful.

Another way to join panels is to use the Council for Affordable Quality Healthcare as a conduit. We have written about this in previous editions of Counseling Today. See the CAQH section in the same webpage cited above under FAQs (Frequently Asked Questions).

An issue for New York counselors is that your license is new, and many managed care companies require two or three years of licensed experience before allowing you to join their panels. On the state level, your counseling organization is doing a great job of working on these managed care issues. Check with them. Good luck with this.

Q: First, let me say your column in Counseling Today is excellent and extremely helpful! Your book has also been quite beneficial! Last year, I started a private practice in Alton, Ill. There is a local counselor (a Ph.D.) who is considering retirement. It was suggested I contact this individual to explore the possibilities of record transfer and client referrals. I am comfortable doing so. However, are there specific areas I should be concerned with or questions I should ask this individual directly? If there are specific Internet sites you recommend, I’ll be happy to research this more. Thank you for your time!

A: I would approach the retiring counselor and inquire whether he/she is looking for someone to take over the practice and, if so, what are the terms or conditions. Keep it open-ended until you get a feel for what the counselor is looking for, then you can get more specific.

We are not aware of websites that cover this topic. However, in the “Private Practice Pointers” (member’s only) section of the ACA website is an article we have written on buying/selling a practice.

Editor’s note: Also be aware that Standard C.2.h. (“Counselor Incapacitation or Termination of Practice”) of the 2005 ACA Code of Ethics states: “When counselors leave a practice, they follow a prepared plan for transfer of clients and files. Counselors prepare and disseminate to an identified colleague or ‘records custodian’ a plan for the transfer of clients and files in the case of their incapacitation, death or termination of practice.”