In growing your private practice, it’s not uncommon to have questions about how a sliding scale works. In fact, for many clinicians, the concept of sliding scale gets confused with offering a range of rates for client services. We tend to use sliding scale and a range of rates interchangeably when in reality, they are very different approaches to running your mental health practice.
Sliding scale describes an income-based calculation to determining what the client will pay for each session. The client must report to you their income in order for you to set a rate they can afford based on that income. This is a clear-cut option in having the transparency of a table of rates and the calculations used to determine them in your state of practice. It demonstrates that there is no discrimination against clients of diverse backgrounds in having set rates that are predetermined. Take a look at the Khalil Center which shares sliding scale rates for their therapy services in Illinois, New York, California, and Toronto, Canada.
Although the charts are easy to interpret and are uniform to use, sliding scale does put you as the therapist in a position of asking the client to report on their income, which can make some people uncomfortable. Not only that, but what if they report an income that is incongruent with their reports of their lifestyle in sessions? I have seen colleagues struggle with unspoken resentment wondering why the client is taking vacations every other month but reports an income level where they can only afford $90/hour therapy sessions. How often would the therapist re-evaluate the rate based on income changes for the client? Is the therapist prepared to offer the lower rate when the client comes in stating a change of employment such as a loss of job or layoff? Would the therapist introduce a re-evaluation of income and session fees when a client discloses a promotion or new job?
You can see why it can feel like a sticky situation to navigate client income as the fee determinant for private pay rates in private practice. It takes a lot of attention to detail to maintain a sliding scale. A second option to consider is a range of rates in your business as another viable option.
Range of rates means that the business owner, in this case the therapist, identifies a range of rates they are comfortable charging for their services. For example, perhaps the clinician identifies that $120-$150 is an appropriate range that 1) feels fair to them as a licensed professional accounting for expertise and their current location and 2) feels accessible to the population they are trying to serve. Once the range of rates is set, the therapist can share it openly on their website and in initial calls with potential clients for client consideration. The client is encouraged to pick a rate that they feel they can afford, allowing the client to demonstrate financial autonomy. The agreed upon rate is recorded in the client file and both clinician and client are comfortable to move forward with sessions at that rate.
Similar to sliding scale, the range of rates may need to be revisited if the client experiences a loss of employment or other financial hardship. Recently, some of our colleagues have reduced rates to help individuals impacted by COVID-19. Others have had conversations with existing clients to adjust their rate as they look for new jobs or wait for news from their employer after being furloughed. Although these decisions can occur on a case by case basis, the biggest question that arises in private practice is what to do when you are ready to increase your rates.
Rate increases for private pay therapy are commonplace in January as the start of a new year. Will you raise your rates for existing clients? For new clients only? How will you notify existing clients of the change if the rate change applies to them?
Some important elements to consider include:
1) When and how current clients are notified of a rate increase. In writing is the ideal method.
2) Documentation of the client decision including agreement to the new rate effective January 1st and beyond.
3) Documentation of referrals provided within the client’s price range if the client is unable to continue with you at the increased rate.
As a business owner, you get to decide if sliding scale or a range of rates works better for you. As you move forward with your decision, clients will be deciding to either move forward with you in sessions at the higher rate or may require a transfer with referrals. Therefore notifying clients of the upcoming change 2-3 months ahead of time can be helpful to both the therapist and client in support of a seamless transition. My hope is that this blog will support therapists in exploring their options while encouraging them to navigate rate changes in ways that feel empowering and authentic.