Norma Bland had fallen on hard times when her business failed. Nonetheless, her skills were marketable and her future prospects were good if she could get through this lean period. Norma’s therapist, Cary Martin, LCSW, responded to her financial difficulties by reducing fees and letting Norma accumulate an unpaid balance. A year later, Norma had completed therapy and found a new job. When Dr. Martin wrote her requesting that she start repaying the balance of her therapy bills, he was surprised to get a letter from her attorney threatening a malpractice suit.
Every therapist in private practice must consider how he or she will handle delinquent accounts. If you are squeamish about dunning your clients or feel that dunning negatively affects the therapeutic relationship, you must find a way to obtain payment.
Your best risk management strategy is to have a good accounting system and a clear and consistent billing policy in place. There are numerous computerized accounting packages and professional bookkeeping services that will keep your accounts current. It is important that you know when a client is slipping behind in his or her payments so the issue can be addressed before a large balance is owed. It is equally important that you have a published billing policy that is given to clients at the start of therapy and that is readily available in your office. Your billing policy should state when an account is referred to collection. If you use a collection service, you should be aware that the possibility of a malpractice suit increases dramatically.
In some instances, a social worker may agree to reduce, waive or defer a client’s fee. However, any deviation from normal billing should be documented and for a limited time period. Don’t agree to accept insurance reimbursement only and waive the client co-payment as such behavior may be a form of insurance fraud. Never agree to accept barter in the form of goods or services. Bartering is explicitly prohibited in the NASW Code of Ethics. It presents great potential for abuse, exploitation, conflict and distortion of the professional relationship and sets the stage for a malpractice suit and/or an ethical inquiry.
Be prepared to transfer patients with delinquent accounts to other sources. While you are not obligated to treat a client without payment, you should NOT terminate needed therapy for lack of payment without the option of offering alternative care from another source. Finally, recognize that you occasionally choose to absorb some unpaid balances in your private practice. Sometimes accepting the lost income is simpler than risking a counter-suit for malpractice.
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