We’ve all done the math in our heads: our fee x 40 hours…if only! Most therapists I know who see 40 clients in a week are exhausted, burnt out and work in an agency setting–overwhelmed by demand and paperwork. As you start in private practice, recognize you have finite time to do great work, receive supervision, attend to the business of running a practice and oh, yes, pay rent.
Additionally, you may decide to take insurance (which reduces your payment), accept credit cards, (ditto) or slide your fees. (double ditto).
So then. How to set your fees?
Step One: Try this formula: Average fee for your license, in your area with a “years in practice” multiplier. In other words, ask 10 therapists within 10 miles of your office what they charge for full fee. A quick search in 3 major metropolitan areas for master’s level shows a range from $80.00 to $125.00. For Doctorate: $100.00 to $200.00. 5 years in practice? Add $10.00, 8 years? Add $20.00. These numbers are of course, arbitrary, dependent on your comfort level and the next step.
Step Two: Spend some time examining your financial reality. That’s right; what do you feel is the appropriate amount of money you should charge per hour? How much money do you believe you should bring home monthly?
This is an active exercise! Very soon, a client will ask you what you charge. It is important that the fee you set feels authentic and valuable to you.
Many times over the years, as a clinical supervisor, I have had to unravel the resentment a clinician is feeling when they are doing big work for a low fee. And yet, they set the fee! Without digging in deep, getting a sense of the market and then exploring your financial reality, you may unwittingly undervalued your service.
Step Three: And now that you are comfortable and confident in that number–slide it down! That’s right, figure out the least amount of money you would take for doing what you do best. And don’t go a dollar less. Let me explain.
A beginning practitioner feels comfortable charging $80.00 an hour and plans to work 10 hours a week while building the practice and working part-time in a hospital setting. $800.00 will cover her expenses and supplement her salary. Now, at the beginning, she has actively acquired 5 full fee clients. She has mindfully and confidently researched her area and recognized her value and the market price. A sixth client calls with a request for a lower fee. Our practitioner has a decision to make. Remember, she has determined a $800.00 need. Should she slide? Maybe. Time to determine the client’s financial reality. How to do that? ASK. That’s right. Here’s your script:
“I understand you would like a lower fee, My fees are currently $80.00. In your financial picture, is that possible?”.
That gives the client the opportunity to take her own mindful look at her finances. If the answer is no, get creative. Remember, YOU set your fees. How about this?
“I am willing to slide my fee for 4 months to help you out. At that time, let’s re-evaluate where you are. I’ll plan to charge my full rate then. Will you agree?”
Everyone wins, you have a 6th client with a promise of a full fee in 4 months. Don’t forget to determine how many clinical hours, in your busy and valuable schedule, are eligible for sliding. That way, when you accept a client, you do so with the power of knowing that you have made a choice–it hasn’t happened TO you!
Step 4: Decide HOW you will receive payment. Your state and license status will determine when you are eligible to be a member of an insurance panel. Additionally, you can decide to fill out a SuperBill or a receipt to allow for insurance reimbursement that goes directly to you. In a future post, we will examine how to get on Insurance Panels and what value they may have.
Step 5: We live in a credit card nation. A quick survey of the clinicians in my supervision groups tell me that up to 50% use a credit card for payment. We have had great success with Square. It’s easy to set up and use with a smart phone. From your computer, you can manually enter in the card number, too. Either way, remember that each credit card company holds back a percentage of payment for the privilege of use.
Step 6: Collect payment at the time of service. Here’s your script:
“See you next time. Will you be using a check?
(Cash, credit card, insurance?)”
Of course, in your Consent forms, this is all spelled out. This script is a friendly reminder and a cue that the session has come to a close. By this time, you are probably standing, the client is rescheduled and you are headed to the door. Don’t forget to say thank you as you post your fee to your client spreadsheet or ledger. After all, you have determined for yourself and for your client, a fair and equitable amount for your time and expertise. Own it.
Step 7: Re-evaluate annually what you charge. After all, with each year, you are gaining expertise, adding to your skill set and paying your ever-increasing expenses. As you thrive, you may be able to add 1 or 2 more sliding scale spots in your week. Or, you may get financially creative when a client loses a job or hits a rough patch. All of this is within your control and is part of your overall financial strategy. And never forget, that you are modeling self worth to your clients every time you collect your fees.