If you’re a therapist who’s concerned about the current state of mental health care in the United States, you’ve probably considered establishing some sort of sliding fee scale therapy. This type of mental health service, which offers reduced rates to people in financial need, has several potential benefits—for both your clients and yourself. But there are also potential drawbacks that must be weighed carefully before making the decision to go with sliding scale fee therapy, as well as some tips for setting one up if you decide to move forward with it. Here are all the details on sliding scale fee therapy and how you can do it successfully for in-person or online therapy.
Therapy is expensive. When it comes to how much therapists make and charge, the average cost of a therapy session in the United States ranges from $50 to $150 per session and can reach up to $250 or more in some parts of the country. With a lot of Americans struggling financially, paying these rates out-of-pocket can be challenging. Many therapists offer sliding scale fees as a way to help people get quality therapy at a reduced fee.
A sliding scale is a type of fee system that allows greater flexibility so therapists can serve patients from various backgrounds. Here’s how it works: Instead of charging every patient a set rate, therapists who offer services on a sliding scale adjust their fees to correspond with the patient’s ability to pay. That means if the client has a high salary, they pay more for therapy but if their income is limited, they pay a lower fee.
There are several reasons why you would choose to offer sliding scale fee therapy. Some of the most compelling include:
Access: The high cost of therapy often acts as a barrier, preventing patients from seeking help. By offering your services on a sliding fee scale, you’re clearing the hurdles and making therapy accessible to more people.
Diversity: When you lower the barriers to therapy, your client base will diversify. You’ll no longer be limited to helping only those who have an insurance plan or can afford to pay out-of-pocket; instead, you’ll be serving a more diverse population with widely varying issues, which can provide you with valuable learning opportunities.
Privacy: Providing therapy on a sliding fee scale also offers more privacy and anonymity for your clients. When patients are using insurance for therapy, their services will be on record and appear on statements for the patient’s family members to see. When you operate on a sliding scale, payments are made without insurance company approval which means patients are better able to maintain their privacy.
Philosophy: Most therapists get into the field because they want to help people and better their lives. The typical attitude is the more people you can help, the better. Offering a sliding scale for fees is a good fit with this philosophy; by providing affordable therapy for lower-income patients, you’re able to help more people.
Engagement: Adjusting your rates to match the client’s income can also help them become more engaged in therapy. If a patient comes to therapy out of necessity but they’re fearful the cost will be exorbitant, this can put them under a financial burden making it hard to focus on getting well. Clients will be more engaged in the process if they know they can afford each session.
If you’re thinking about starting a sliding scale fee therapy practice, you should also be aware of the different therapy questions and it’s drawbacks, such as:
Reputation: Offering therapy at a reduced fee may hurt your professional reputation. From the perspective of other therapists, offering services at a reduced rate devalues their services—and your own. If people discover they can get a discount on sessions with you but not with their current therapist, they may switch providers; this would cause your peers to lose patients and could damage your professional standing in their eyes.
Inequitable: You may also have clients who believe the sliding scale fee structure is unfair, namely those who are paying more. Patients with larger incomes may feel like it’s unreasonable to expect them to pay more because others are unable to afford your set rate. This could cause them to be resentful and find another therapist who charges all people equally.
Income: Sliding scale therapy work will definitely open the doors for a wider range of patients, but it will also make your income less predictable. If you provide services for a set fee, you know exactly how many clients you need to see per month to meet your income goal. With a sliding fee in place, there are many more variables to consider and you’ll have a harder time predicting your income.
Hours: Operating with a sliding scale can also impact how many hours you must work per month. Since you’re taking on more clients who pay less per hour, you’ll have to find a way to compensate for that reduction—that means you’ll be working longer hours on average.
Resentment: Over time, the burden of earning a lower income while working more hours could start to affect your wellbeing. You may start to feel resentful toward clients who pay a lower fee for your services, which can impact the level of care and also lead to therapist burnout.
If you’ve weighed the pros and cons and decided that sliding scale therapy work is right for you, the next thing to do is calculate what rates to include on your scale. While there are various ways to determine this, it’s recommended that you base it on your income goals, so you don’t end up shorting yourself. Here’s how to set your rate:
1. The first thing to do is calculate how much it costs to operate your business. Don’t forget to include expenses like office rent, utilities, wages, equipment, software, insurance fees, marketing costs, legal services, etc.
2. Once you’ve figured out the total cost for running your private practice, the next step is to determine what kind of salary you’d like to earn. What’s your yearly income goal? How much would you need to earn per year to have a comfortable lifestyle? (If you feel uncomfortable with this method, an alternative would be to decide on the lowest possible salary you’d be willing to accept.)
3. The third step is to add together the annual costs of running your private practice and your salary goal. Divide this number by 12 and you’ll have the amount of income you’ll need to earn per month to operate your business and reach your financial goal.
4. Next, determine how many patients you see each month on average. You can calculate this number based on how many people you’ve seen in the last year; just take the total number of patients you’ve seen in the past year and divide it by 12.
5. The next step is to calculate the minimum fee on your sliding scale. You do this by taking your required monthly income from step three and dividing it by the average number of clients you see per month, as determined in step four. This amount will be the lowest fee you can offer for therapy sessions while still keeping your practice afloat.
6. Once you have the minimum fee in place, you can calculate the remaining numbers on your scale from there. You should also find out what therapy sessions typically cost in your area. This is often referred to as the “usual and customary rate.” Compare it to the mid-range of your scale to make sure you’re not too far off base.
If you want to lower the barriers to therapy but you’re not sure a sliding scale fee structure is right for your practice, the good news is there are other alternatives.
One option is to provide clients with flexible scheduling options. If a patient can’t afford to meet with you every week, try offering sessions every other week instead. Alternatively, you could schedule sessions for 30 or 45 minutes and offer a reduced rate instead of meeting for a full hour. With this option, your client gets the help they need while you still earn your standard hourly rate.
Another way to provide affordable therapy is to help patients utilize their out-of-network insurance benefits. This can be done through services like Advekit that collect patients’ insurance information, explain what benefits are available to them, and file the necessary paperwork for reimbursement after services are rendered. All of this saves your clients money while saving you time. And best of all, you earn your standard fee upfront, so you don’t have to wait around for the insurance company to pay.
You could also make the cost of therapy more manageable by offering your clients payment plans. With payment plans, the cost of each therapy session is added to a tab with the balance spread out over several months. This allows patients to get the care they need while giving them time to pay down their debt.
If you’re concerned that the high price of therapy is preventing lower-income earners from accessing the help they need, then you might consider doing pro bono work. Some therapists see this as the best option for helping disadvantaged patients. They simply set aside a certain percentage of sessions to be offered completely free of charge.
If your client is unable to pay your fees but you still want to get them help, you could refer them to another therapist or organization. A great place to start would be with a local university; they often have therapist training clinics that offer services free of charge. You might also know of a non-profit in your area that offers free or reduced-cost mental health services.
A sliding fee scale is one of the best ways to save people money on therapy. When you offer sliding scale fee therapy, you're providing options to people who might not otherwise be able to afford therapy. If a client truly needs your help but they don't have money to pay for it, providing a sliding scale fee allows them an opportunity to work with you and improve their quality of life. However, sliding scale fees come with several potential downsides, like a loss of reputation, longer hours, and reduced income.
The option to offer sliding scale fee therapy is inevitably up to you; it all depends on the overall goals for your practice and how you prefer to achieve them. Take some time to mull over the pros and cons plus consider the alternatives before deciding which is the best option for your practice.