Billing Best Practices: When Should I Bill Clients? 

For therapists, there are few better professional feelings than opening your own practice.  

Not only do you get to determine the communities you serve, the office you work out of, and your own schedule, but you also get a much bigger slice of the revenue your work brings in. 

Having your own business also enables you to figure out exactly how you want to structure your practice, including what kinds of clients to take on, which insurance providers to work with, and what areas of practice to emphasize. 

Yet at the same time, running your own practice also exposes you to a number of significant challenges. Chief among them? Billing. 

In an ideal world, clients would pay you predictably, and you would never have to track down late payments. Unfortunately, it rarely works out that way. Unless you make it a point to prioritize your billing process, you’re bound to run into billing issues sooner or later.  

To answer the question posed in the headline, there’s no rule that says you need to bill clients on any particular cadence. It is, however, important to bill clients consistently — whether that’s weekly, biweekly, monthly, or even quarterly is up to you.  

Before we take a look at some actionable tips you can use to improve your billing processes, let’s first turn our attention to some of the reasons why successful practices prioritize consistent billing experiences. 

Billing Therapy Clients: 5 Reasons Why Consistency Matters 

While the following list is by no means exhaustive, here are some of the more persuasive reasons why you should do everything you can to deliver a consistent billing experience to your clients.

1. You won’t catch your clients off-guard.

Ever get hit by an unexpected bill in the mail? It’s not the most thrilling experience in the world, to say the least. 

As a therapist, your job is to help clients move past traumas and become the best version of themselves. The last thing you want to do is be the source of stress or grief. 

By billing clients consistently, they will know when to expect bills and how much they’ll have to pay. In other words, no surprises — the way it should be.

2. You’ll avoid the appearance of fraud.

If you’re not in the habit of billing clients consistently, you might fall into the trap of billing them whenever you feel like it. For example, maybe you send a client a bill after two sessions, then after five sessions, then after three sessions. 

With no rhyme or reason to your billing practices, you might raise red flags for credit card companies — or even your clients themselves!  

In most other areas of our lives — whether it’s insurance payments, rent or mortgage expenses, or utility bills — we’re billed once a month, like clockwork. By sticking to a predictable billing cycle, you can avoid the appearance of fraudulent accounting behaviors.

3. You’ll never leave a big pile of invoices on your desk.

As every small business owner knows too well, invoicing can be quite the bittersweet activity. On one hand, you’re getting paid for your work, which is exciting. On the other, if you put the task off long enough, you’ll have to deal with a mountain of paperwork (or tons of emails if you bill electronically), which is probably not on your list of favorite things. 

By building a consistent, repeatable billing system, you can make the process as efficient as possible.

4. You won’t work for free.

The longer you put billing off, the higher the chances you’ll miss charging for  a session or two, and maybe even more.  

While you went into your line of work to help people, you knew this  would also be your job, and you didn’t sign up to work for free. Consistent billing processes significantly reduce the likelihood you’ll forget to bill a client for a session.

5. You’ll have a steady income stream.

Cash flow issues are one of the main reasons small businesses fail, and therapy practices are no exception. After all, you need money to pay your utilities, office expenses, taxes, and any wage expenses you might have. 

Unless you are sitting on a massive pile of cash, you need to bill your clients consistently to avoid cash flow gaps. Generally speaking, the faster you send out invoices, the sooner you’ll get paid.  

By billing at regular intervals, you benefit from a predictable cash flow. This makes it much easier to help your clients to the best of your abilities — instead of worrying about how you’re going to pay next month’s energy bill, for example. 

Now that you have a better idea about why billing clients consistently is the right thing to do, let’s take a look at some of the specific steps you can take to get your billing function in a better place.  

4 Steps to Take Now to Transform Your Practice’s Billing Processes 

Ready to take your practice’s billing process to the next level? Here are four simple steps to make that happen.

1. Change the way you think about billing.

First things first: You need to treat billing as the most critical part of your business, because it is. If your clients don’t pay you promptly, it’s going to be that much harder to fulfill the mission of your practice: helping clients live their best lives. 

If billing’s been an afterthought to date, it’s time to change your mindset and treat it with the importance it deserves.

2. Communicate transparently.

Before you take on a client, it is imperative that they know exactly how much you are charging, whether their insurance covers it, and how much they can expect to be billed for each session.  By outlining your billing processes as early as you can, you reduce the chances there will be any confusion when it comes time to settle the account. 

For the best results, be responsive to client concerns and answer any questions they might have. If you’re planning to raise your fees at any point, communicate those increases well ahead of time.

3. Invest in your billing function.

There’s no rule that says you have to run your billing department yourself just because you own your own practice.  

As your business begins to scale, consider making smart investments in billing to lessen your load. For example, you might decide to hire an accountant, invest in billing software, or even bring in new in-house staff to take care of billing. 

When you don’t have to manage billing yourself, you can bring a clearer mind to each session — and achieve better client outcomes because of it.

4. Set automatic reminders.

You might decide that you like handling billing on your own, and that’s perfectly okay. If you continue with this setup, be sure to set automatic reminders that will let you know that it’s time to send out invoices. 

By doing so, you won’t have to worry about forgetting to bill your clients on time, which improves the client experience while strengthening your cash situation. 

Ready to Upgrade Your Billing Function? 

As a therapist, you went into business to help clients live more rewarding lives — not to crunch numbers and stare at spreadsheets. 

If you’re struggling with billing, look into a practice management solution like Therapy Partner, which gives you all the tools you need to manage your schedule, document each session, and bill your clients with ease.  

For more information on how Therapy Partner can transform your approach to billing and ultimately help your practice get to the next level, check this out. 

by Connor D. Jackson, JD

Connor D. Jackson is a healthcare attorney based in Chicago who serves independent practices in several states. Visit his firm’s website here.

Psychotherapy vs. Coaching: What’s the Legal Distinction?

Therapists have the education, license, and clinical training required to prepare them for their day-to-day work with clients. But those things also come with restrictions: licenses are usually state-specific, and each state’s laws set forth a therapist’s legal responsibilities (like mandatory reporting). This leaves some therapists eyeing the “coaching” industry and profession with envy and asking, “Why don’t the same rules apply?”

Therapy and coaching are very different things.

Or at least they should be very different things! Therapists are healthcare providers, while coaches are not. While every state requires therapists to be licensed, no state regulates or licenses coaches. Due to the lack of license requirements, coaches do not necessarily have 

• Appropriate training or education
• Oversight by a regulatory body
• Obligation to comply with HIPAA
• Mandatory reporting requirements
• Clinical experience

A coach is not a healthcare professional and cannot do work that infringes on a therapist’s legal scope of practice.  Under the law, coaches cannot do any of the following:

• Bill their services to health insurance companies.
• Offer the breadth of care and services provided by therapists.
• Diagnose or treat mental health conditions.
• Describe their services using any of the terms that the law protects for licensed professionals.

Any coach who delivers services that mirror the scope of practice of a licensed psychotherapist risks felony charges. 

In Illinois, for example, regulatory authorities have sanctioned unlicensed persons who step into the realm of licensed mental health care. The following examples are from disciplinary reports from IDFPF (Illinois Department of Financial and Professional Regulation):

• An unlicensed person was penalized for practicing medicine without a license because she owned a business that offered psychiatry services — even though she performed only administrative duties.
• An unlicensed person practiced licensed clinical social work for a decade and billed his services to insurance under a licensed provider’s credentials. 
• An unlicensed person who used the term “social worker” was fined and sanctioned for engaging in the unlicensed practice of social work.
• A therapist who billed an unlicensed person’s services to insurance was sanctioned for aiding and abetting the unlicensed practice of social work.

Other states have been similarly strict. For instance, Oregon found that a woman’s “coaching” services were professional counseling services and sanctioned her.

Protected Language

In many states, licensed providers have protected language. In other words, people who do not hold that same license are not legally allowed to use certain words to promote or describe their services. 

In California, for example, LMFTs’ practice act says:

“No person may engage in the practice of marriage and family therapy… unless he or she holds a valid license as a marriage and family therapist… nor may any person advertise himself or herself as performing the services of a marriage, family, child, domestic, or marital consultant, or in any way use these or any similar titles, including the letters “L.M.F.T.” “M.F.T,” or “M.F.C.C,” or other name, word initial, or symbol in connection with or following his or her name to imply that he or she performs these services without a license as provided by this chapter.” (BPC § 4980(b))

Coaches who use protected words or abbreviations can be penalized for practicing the licensed profession without a license. So even if she’s never seen a single client, “Carrie Coach, MFT” is illegally holding herself out to the public as a marriage and family therapist.

Licenses vs. Certificates

For patients, a string of letters after a professional’s name can signal credentials and qualifications. But in healthcare, letters mean something specific. 

As an example, consider a life coach who works with couples, Jane Jones, CPC, CSC, CHLC. Jane’s credentials? She’s a Certified Professional Coach, Certified Sex Coach, and a Certified Health & Life Coach. She obtained all of these certificates from nonaccredited, for-profit businesses, and some of them were non-interactive, online-only programs. 

In healthcare, some of the acronyms that Jane is using also mean other things. A CSC may be a licensed nurse who has completed additional training to earn a cardiac surgery certification. And a healthcare practice may require that their administrator be a CPC—or a certified professional coder trained in medical billing.

Imagine that a couple experiencing marital strain rooted in a traumatic event is searching for help. They find a listing for Jane, who has glowing online reviews from those who claim she saved their marriage. 

The couple compares Jane’s online profile with that of Tara Thomas, LCP. Tara is a licensed clinical psychologist with no reviews, as soliciting them from patients violates her practice act. Tara holds a Ph.D. in psychology from an accredited university, and she has significant clinical experience. She has completed all of the requirements to obtain her state license, and she bills her services to insurance. She can also diagnose one partner’s PTSD, and she protects her records per HIPAA.

Jane Jones and Tara Thomas have starkly different experience and qualifications, yet they’re sometimes “competing” for the same clientele. However, it’s crucial to note that a coach whose work too closely mirrors Tara’s is likely practicing psychology without a license — a criminal offense in many states! 

Psychotherapists Who Practice as “Coaches”

Licensed psychotherapists may view the grass as greener in the coaching industry. However, while it may be tempting for therapists to call themselves coaches to avoid regulatory oversight, doing so can create more (not fewer) headaches. 

Coaches are subject to the same legal regulations as therapists — they just have a much harder time satisfying them! Therapists have the credentials, practice acts, and legally articulated role in population health. Meanwhile, coaches’ conduct isn’t regulated by any state’s law, but if they step into any of the areas within the scope of therapists’ practice, they, too, will face legal consequences. 

In the end, there are no shortcuts to becoming a healthcare provider.

This article is made for educational purposes and is not intended to be specific legal advice to any particular person. It does not create an attorney-client relationship between Jackson LLP Healthcare Attorneys and the reader. It should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction. 

One key benefit of psychotherapy regulation is fundamentally protective. Both mental health providers and the public benefit from a clear definition of roles and responsibilities in the practice of psychotherapy. A regulatory body can to step in and discipline a therapist who is acting outside their scope of practice; nothing like that exists in the world of coaching. Check out our classic article “50 Warning Signs of Questionable Therapy and Counseling” to learn more about behaviors to avoid as a therapist, both regulated and unregulated.

by Connor D. Jackson, JD

Connor D. Jackson is a healthcare attorney based in Chicago who serves independent practices. Visit his firm’s website to learn more.

Telehealth: Insurance & Legal Considerations

When evaluating whether telehealth services are covered by insurance, three concerns should be top of mind. The requirements of individual states, insurance companies, professions, and claims vary widely. Thus, something that might cause one claim to be denied could be irrelevant to another claim’s approval. It’s important to know what questions to ask and what the answers mean for your practice’s procedures.

1. Is it covered, and will I get paid?

First, determine whether your state legislature has enacted telehealth insurance parity laws. These laws typically require parity between the types of services covered or the reimbursement value of the services. For example, coverage parity requires that insurers cover telehealth-based services that they already cover when offered in the office. If a state also requires payment parity, insurers reimburse providers for telehealth services at the same rate as in-person encounters. 

Many states have coverage parity laws, but achieving payment parity has been a tougher battle for providers. CMS has already announced that some payment parity changes will be rolled back once the COVID emergency ends. Legislation is pending in several states to protect temporary payment parity changes, but even if passed, these laws will apply only on a state-by-state basis.

2. Do I need to change how I file claims?

The second insurance-related consideration requires that the provider bill the services using the correct codes, including any modifiers. Most mental health providers are already familiar with the “95” CPT code modifier for telehealth services. 

During COVID, however, CMS reminded providers that claims should include “DR” (disaster-related) and “CR” (catastrophe-related) modifiers as needed to ensure payment.  DR/CR modifiers aren’t generally needed for outpatient mental health services, and they were used more by those whose underlying roles shifted during the pandemic. 

For example, an ambulance company could seek reimbursement for responding to a 911 call and rendering paramedic services, even if they didn’t transport the patient back to the hospital, because COVID requirements didn’t allow them to follow that protocol. When filing their claim with Medicare, the company would add a DR/CR code to identify COVID as the reason they didn’t take the patient to the hospital.

3. Does it matter where I’m licensed?

The provider’s license matters to insurance companies. They use it to determine if the provider is eligible to provide services in the state where the client received them, and they verify it during the paneling or credentialing process before allowing that provider to be in their network. A “place of service” code and office address on a claim form could also reveal that the provider is located out-of-state.

Licensing for Telehealth Care

Traditionally, providers were licensed in the state where they lived and offered care. The client’s state of residence was generally irrelevant because clients saw their clinicians at a physical location. 

The emergence of telehealth in recent years was accompanied by an all-too-common expansion of technology at a faster pace than legal developments. The majority of clients continued seeing their providers in person, and coverage parity laws became the norm only shortly before COVID began. When the pandemic forced providers to suspend in-person care, they faced a new and existential question: whom can I treat?

1. If I’m only using telehealth, am I restrained by my state license?

Under the framework in most states, the law considers a telehealth visit to take place where the client is located during the encounter. This means that the provider must be licensed in the state where the client is actually located — a requirement that theoretically ensures that the provider is regulated by the client’s state and is aware of that state’s practice requirements, such as:

• scope of practice
• standards of care
• informed consent requirements
• state medical privacy rules

In reality, an excellent therapist in Illinois is likely also an excellent therapist in California. Technology now allows them to bridge that geographic divide — if only the law followed suit.

For example, say that you’re licensed in New York, live in New York, and have always seen clients at your New York office. During COVID, some of your clients permanently moved out of the city and into suburbs in New Jersey and Connecticut. Unless New York has a border-state exception, the law prohibits you from treating your NJ and CT clients via telehealth. Some dense geographic areas, like the DC-VA-MD metro area, have recognized the challenges of regulating certain professionals individually and have implemented border-state licenses or waivers, 

Some of these requirements arise from the expectation that providers and clients do reside in the same place. Proximity may even be clinically necessary — if a provider determines that a client’s care necessitates an in-person visit, then they could schedule that appointment promptly. This is particularly a consideration in psychiatry or for therapists working with youth or those with significant mental illness. 

If providers and clients are in different locations, then an in-person visit would be impractical or impossible — even if the standard of care required it. COVID, however, upended some of these norms. Providers were forced to ask themselves whether a client was “safer” receiving teletherapy from home or risking COVID infection by entering their office. Providers also had to consider their own health and how in-person encounters could impact their families, staff, and other clients. Telehealth rapidly became the norm, and emergency orders allowed providers to continue treating their clients even if people had moved around a bit in response to the pandemic. 

2. My profession has an interstate licensure compact. Does that change things?

The Psychology Interjurisdictional Compact (PSYPACT) coordinates the practice of telepsychology across state lines, giving licensed psychologists more flexibility. Currently, over one third of U.S. states have effective PSYPACT legislation, and by the end of 2021, that number will jump to half of states.

Under PSYPACT, psychologists must be located within a compact state in which they are licensed. Meanwhile, the client must also be located within a participating state.  The authorization does not come automatically, however. To practice telepsychology under the authority of PSYPACT, psychologists must obtain an Authority to Practice Interjurisdictional Telepsychology (APIT) and possess an active ASPPB E.Passport. 

The pace of new PSYPACT legislation suggests that lawmakers recognize the value and the demand for teletherapy services that reach across state lines. Nonetheless, the laws still lag behind the technology. Therefore, therapists who wish to set up an interstate practice must understand the laws that apply to their situation.

Figuring out exactly what is required of you and what path makes sense for your practice isn’t something you have to do alone. Law firms like Jackson LLP Healthcare Attorneys specialize in providing counsel to mental health providers to help you get it right in your practice of psychotherapy.

This article is made for educational purposes and is not intended to be specific legal advice to any particular person. It does not create an attorney-client relationship between Jackson LLP Healthcare Attorneys and the reader. It should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.

Ethics Training for Mental Health Providers

Ethics training is essential for mental health providers, helping you provide the very best help to your clients and patients. As laws, technology, and our understanding of people and the therapeutic relationship continue to evolve, ethics training keeps you and your practice up to date.

The theory and study of ethics stretch through every profession as the measure of quality in decision-making. Ethics play a vital role in how therapists and counselors choose to interact with their clients. For mental health providers, having a strong understanding of ethics is important for maintaining healthy boundaries with yourself, other professionals, and clients as you work through some of life’s more difficult topics. Keep reading for a brief explanation of ethics and an examination of how ethics training is important for therapists.

What Do We Mean by “Ethics?”

Ethics is a complex term that we use to talk about several different aspects of appropriate conduct. The most relevant definitions of ethics from Merriam-Webster for our purposes are “the discipline dealing with what is good and bad and with moral duty and obligation” and “the principles of conduct governing an individual or a group.”

According to the American Psychology Association, The Ethics Code “provides a common set of principles and standards upon which psychologists build their professional and scientific work.” Its goals are “the welfare and protection of individuals and groups with whom psychologists work and the education of members, students, and the public regarding ethical standards of the discipline.”

Ultimately, ethics training ensures that you know the ethical principles that govern psychotherapy and understand how to align your professional conduct with them.

Looking for ethics courses? Check out our lineup of ethics CE courses for therapists!

How Does Ethics Support Psychotherapy?

As mental health providers, you must frequently determine how to apply ethical principles in various contexts. That’s why many jurisdictions require psychotherapy practitioners to take continuing education courses in ethics. Through ethics training, you’ll grow in your understanding of how to weigh ethical issues in psychotherapy and what to do if you get stuck in the decision-making process.

Staying up to date with the ethical standards and best practices will help you practice psychotherapy in a way that avoids ethical violations. Providers who exhibit unethical behavior may can find themselves at risk of losing their license or ability to practice.

Examples of Unethical Behavior

Ethics violations include many different examples of poor decision-making. Here’s the scoop on four of the most common therapist ethics violations.

Dual Relationships

As a therapist, you should never have a client who is or becomes someone you share a personal relationship with (e.g.,  a family member, friend, or romantic relationship).

Breaking Confidentiality

Confidentiality is essential for building trust with clients; sharing private client information with another party without the client’s informed consent breaks that trust and violates ethical standards. Confidentiality has a wide scope, including what you tell a friend over coffee and how securely you keep your client files.

Failing to End Therapy

If you do not end therapy with a client you are not in a position to help, whether that’s because you cannot give them the attention they need, you do not have the knowledge or expertise to address their concerns, or the client is no longer benefiting from therapy, you are not serving the client.

Practicing Without a License

It is unethical to offer psychotherapy without the credentials, such as a license or certification, that are required in the jurisdiction where you’re practicing. Licensing boards are a great place to start. It is each therapist’s responsibility to know the requirements that govern their practice and follow them.

Impacts of Unethical Behavioral

Ethics training for mental health providers can help you avoid unethical behavior. This is crucial, as therapist ethical violations can have a lasting impact on you and your clients.

For someone who has come to you for help or attention to address issues and problem areas in their life, unethical behaviors can be damaging to their progress. Because of the inherent imbalance of power in the therapeutic relationship, clients are vulnerable. Your unethical choices can harm a client’s ability to trust (both in future therapy contexts and in their personal lives) and can cause them further psychological damage. Ethics training keeps you in the loop about how to act ethically and protect the integrity of the therapeutic relationship, ensuring your client is safe and supported.

Staying Compliant

While most mental health professionals took ethics courses in school or during their certification, it is important to refresh your knowledge and stay on top of new developments in ethical psychotherapy. Continuing education courses on ethics can be a fantastic way to stay fresh on the topic and stay up to date. Many jurisdictions require a minimum number of continuing education hours to be about ethics, and it’s easy to see why.

GoodTherapy offers ethics courses as part of our continuing education program. There are three ways to access our continuing education courses: CE Only allows you to purchase courses a la carte; CE Unlimited allows you to take as many courses as you want for a monthly fee; and Premium or Pro membership options include a profile in our registry, unlimited access to our CE courses, and other perks. Check out your options today!

5 Tips for Maintaining Confidentiality with Therapy Notes

Maintaining confidentiality with therapy notes is essential for protecting your client and your practice. There are many theories and suggestions for how long to hold on to your notes, what to do with them when you no longer need them, and how to keep them out of the wrong hands. The relationship between traditional paper notes and digital therapy notes also prompts different confidentiality responses. Below are tips for maintaining confidentiality with your therapy notes now and in the future.

The Importance of Confidentiality

Confidentiality is vital for many reasons, one of the most critical being that confidentiality is key to building trust between the client and their therapist. If the client does not feel like their well-being is safe in the palms of their therapist, they are less likely to make the progress they are trying to make with their mental, behavioral, and emotional well-being. It is also important for protecting clients against those trying to take advantage of vulnerable information – should therapy notes fall into the wrong hands, it could be dangerous for the client.

Confidentiality with Paper Notes

Confidentiality with paper notes is much more complicated than with digital notes. Historically, paper notes were kept in a file cabinet with a lock and key. This is no longer the safest way to store your therapy notes and keep them safe. Digital solutions are much more secure. If you are a therapist that depends on paper note-taking, there are a few key things to remember: Therapists should never leave their notes out where someone could find them. This means they should never be left on a desk, a bookshelf, in a car, or anywhere where someone could get their hands on them. At the end of a session, paper therapy notes should be placed in the client’s file and stored safely where only you can access them. If you need to fax notes, always use a HIPAA-compliant eFax solution to maintain privacy.

Digital Therapy Notes

Digital therapy notes can be much more secure than paper notes. Thanks to HIPPA-compliant, encrypted software like SimplePractice, Therapy Partner, Therapy Notes, and others, digital notes are safely “locked” behind a secure password. They are only accessible by authorized users. Digital therapy notes also help providers get a clearer picture of all of the information they have gathered. Providers who are looking to optimize confidentiality with therapy notes should consider implementing a quality digital solution.

How Long Should You Hold onto Notes?

Record keeping is an important part of your role as a psychotherapist. When your time ends with a client, it can be hard to know how long to hold on to those notes. It’s always possible that the client will return for services in the future, but it is hard to know when or if that will happen. With paper notes, files start to build up, and there comes a time where you need to retire notes in a way that maintains confidentiality safely to make room for new client files. There are usually guidelines or mandates that state how long you should hold on to therapy notes, but this varies by jurisdiction. The APA record-keeping guidelines are useful here; check with your licensing board or state laws for more information particular to your license and jurisdiction. 

What Should You Do with Them When You No Longer Need Them?

To maintain confidentiality with your process or progress notes, you cannot simply throw them in the trash. Even if the mandated amount of time has passed, you still need to dispose of your notes safely. Excellent examples of this are shredding the paper records or deleting every trace of a file from your digital database. Again, if you have questions about how to dispose of client notes safely, check with your organization’s regulations as well as state requirements.

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