The Sliding Fee Scale

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Avoiding Liability Bulletin – August 2006

… A CPH insured and reader of this Bulletin called me to ask some questions about “sliding fee scales.” I told her that I would write about the subject in the Avoiding Liability Bulletin since the questions raised are various and sometimes troublesome for practitioners. State law may or may not directly address this issue, and if does, the law may vary from state to state and by profession. I write about this subject and express my views for the private practitioner rather than for nonprofit and charitable corporations, health facilities or similar agencies or organizations.

My view is that a ”sliding fee scale” is unnecessary, unwise and problematic. Most sliding fee scales used by nonprofits and other entities base the fee on the financial condition of the patient. In order to properly implement such a policy, entities must ask for certain information and perhaps supporting documentation, like tax returns. Most private practitioners do not want to get into that kind of detail in their practices. Psychotherapists usually establish fees that they are comfortable charging and stay with those fees until they decide to raise their fees. Physicians and other practitioners likewise establish a “usual and customary fee” and typically do not change their fee for different patients. If the patient can’t afford the fee, he or she can be referred elsewhere.

It is important to have a usual and customary fee for a number of reasons. First, patients of a particular therapist may know one another and may compare notes. If one patient is being charged more than the other, this can cause problems. Having a set fee lets patients know what you think your time and ability are worth. Also, when dealing with insurers and other payers, a set fee provides consistency to your “profile.” It is said that insurers keep profiles on providers as to fees charged and other aspects of practice, and it is not unheard of for an insurer to raise a question with a provider as to why his or her fee appears to be higher than normal. This is an area where therapists and counselors get in trouble.

I have spoken with therapists who have raised their fees when they find out that the patients are covered by insurance. In fact, some have implemented an informal policy that sets the fee at, for instance, $80 per hour, but if there is third party reimbursement, the fee becomes $120. In my view, this is a risky and dangerous practice, and it may constitute insurance fraud. To those who have insisted upon using a “sliding fee scale” I have said – “make sure you always slide down – not up!” The therapist’s fee should not, in my view, be set with insurance coverage in mind, but rather, the therapist should decide upon the fee that he or she requires regardless of the source of payment. This latter approach seems to this writer to be much cleaner.

For those who do establish a set fee, this does not mean that exceptions can’t be made. Some practitioners decide to set aside a certain portion of their practice for low fee clients or perhaps will decide to see one or more clients for no fee – that is, “pro bono.” This kind of simple approach is encouraged in many professions and is easier to manage than the “sliding fee scale” approach. Once the lower fee (or no fee) is established and implemented, it is in my view and experience wise to not raise the agreed upon fee (or the no fee arrangement) upon a change in circumstances. To do so invites disputes and difficulties.


Richard Leslie

"At the Intersection of Law and Psychotherapy" Richard S. Leslie is an attorney who has practiced at the intersection of law and psychotherapy for the past twenty-five years. Most recently, he was a consultant to the American Association for Marriage and Family Therapy (AAMFT), where he worked with their various state divisions to develop and implement their legislative agendas. He also provided telephone consultation services to AAMFT members regarding legal and ethical issues confronting practitioners of diverse licensure nationwide. Additionally, he wrote articles regarding legal and ethical issues for their Family Therapy Magazine and presented at workshops on a variety of legal issues. Prior to his work with AAMFT, Richard was Legal Counsel to the California Association of Marriage and Family Therapists (CAMFT) for approximately twenty-two years. He was director of Government Relations for CAMFT, and as such was the architect of CAMFT’s widely regarded and successful legislative agenda. He represented CAMFT before the regulatory board (the Board of Behavioral Sciences) and was a tireless advocate for due process and fairness for licensees and applicants. He was a regular presenter at workshops and was consistently evaluated as CAMFT’s most highly rated presenter. He also sat with the CAMFT Ethics Committee and acted as their advisor on matters pertaining to the enforcement of ethical standards. Richard is an acknowledged expert on matters pertaining to the interrelationship between law and the practice of marriage and family therapy and psychotherapy. For many years, he taught Law and Ethics courses for a number of colleges and universities in their marriage and family therapy degree programs. While at CAMFT, he provided telephone consultation services with thousands of therapists in California and elsewhere for over twenty years. He is highly regarded for his judgment, his expertise, his direct style, and his clarity. Richard has been the driving force for many of the changes and additions to the laws of the State of California that affect MFTs. In 1980, he was primarily responsible for achieving passage of the "Freedom of Choice Law" that required insurance companies to pay for psychotherapy services performed by MFTs. Passage of that law allowed MFTs to earn a living, allowed them to better compete in the marketplace, and strengthened the profession in California by leading to a great increase in the number of licensees and CAMFT membership. Currently, about half of the licensed marriage and family therapists in the country are licensed in California. While at CAMFT, Richard was primarily responsible for, among other things, the successful effort to criminalize sex between a patient and a therapist. He was successful in extending the laws of psychotherapist-patient privilege to MFTs, thereby giving patients the same level of privacy protection as when seeing a psychiatrist or psychologist. He fought tirelessly and successfully for the right of MFTs to refer to themselves as "psychotherapists," to perform psychological testing services, to be appropriately reimbursed by California’s Victims of Crime Program, and to be employed in county mental health agencies throughout California. Richard was admitted to the Bar in New York (1969) and in California (1973). While practicing in New York, he served as a public defender, and later, as an Assistant District Attorney. Shortly after moving to California, he worked for the San Diego County Human Relations Commission as their Law and Justice Officer. While there, he worked successfully to achieve greater racial diversity in the criminal jury selection system and to expose and stop police abuse. For such work with that agency, he was the recipient of the Civil Libertarian of the Year Award by the San Diego Chapter of the American Civil Liberties Union.

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