Cognitive Biblical
Therapy Coursework
Counseling Through God’s
Transformative Word
Course 6 Chapter 6
Chapter 6 Fee Collections & Billing
a. How to Collect Fees or Bill
b. Invoicing Insurance Companies
c. Payment Policies
d. Standardized Intake Processes
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Chapter 6
Operating the Practice: Income
How to Collect Fees or Bill
We are discussing fee collections and billing. I'm sharing my own practice this week as an example for how the system should work. Each day at the end of each session, you have to receive payment for that session, or it must be charged to the client’s account. I collect the fee at the end of the session. Sometimes people are so caught up in the session or their emotion, that they will forget it entirely. In this case, I have learned to say, “How are you paying for your session today?” At first, you may feel hesitant and mercenary. So, I’ve found that this question is a non-offensive way to remind them to pay. I end the session by summarizing and setting the next session. I pray with them and then I ask this question. If I see them start to reach for their coat, standing up and have not paid, I ask them this question? “Do you want me to bill you?” And what they'll usually say is, “Oh, no, I already have a check written out. No, I want to pay. Oh, I forgot. Oh, I'm really sorry. I didn't mean to forget.”
So, it lets them have the option to bill. This lets you say it graciously, so that you don't appear to be there just to get their money. In some cases, people come from a church that pays, so I don't mention the cost at all. I keep a billing form (see Billing Slip Tracker form) with me that has the name of the client, the date, and a place to check off, whether the client pays, a church or the insurance company pays. In some churches, you must have a referral from a pastor to be sponsored by the church. When you create the invoice (see Church Invoice Example form), you have to put the referring pastor’s name on the invoice or a note who referred the church member on the invoice, so the accounting department knows that the pastor has approved this. It is very important to send these out as soon as you have them prepared, because it takes 3 – 4 weeks for the payment to be received.
Now at the end of each day, I put the day’s income in a hanging file drawer in my desk and complete my Billing Slip Tracker form. At the end of my week after my last session, I bring the week’s collected fees and bills home in my briefcase. The next morning, I will process those fees which means sorting the cash, checks, and Billing Slip Tracker form for the week. I use my accounting system to record each client’s payment for that week, which records the type of payment, date of the session and balance. That's important because you may have a client find some discrepancy with their payments, and this helps to sort it out. This system will also help you keep track of the fees that were billed to churches, insurance companies, or individuals. An accounting system (like QuickBooks) will produce invoices for billing these groups as well.
Invoicing Insurance Companies
If you're working with insurance companies, they're going to want on an invoice a number as well as a code for a diagnosis (see ICD Behavioral Health Codes form). Insurance billing also requires a procedure code which is a five-digit code for ongoing therapy (see Behavioral Health Codes AMA form). You get the diagnostic codes out of the Diagnostic Statistical Manual (DSM 5-TR) manual, which you can buy in a bookstore, online or through a psychologically oriented organization. You can also buy other books or online resources that explain billing to insurance companies. But normally an insurance company wants all of that information, diagnosis name, diagnosis number, and procedure codes. In some instances, there will be a client insurance ID number assigned to them. Some may ask for a social security number or employee ID number along with a group number of insurance policy or workplace and address. All of this will be part of the invoice that you send to insurance companies.
Sometimes each part of the couple will pay for their share of the session individually. They do this so that they can get reimbursed by their insurance company. That must also be recorded by each individual rather than session with an ICD code, not a “V Code”. This is probably 25% of my cases. Depending on your situation, you may not need to deal with this. It is time consuming, but it helps people to afford your counseling cost, so usually it's pretty critical to them. So when you bill the insurance or provide the invoice or receipt to the client, it is very important to send these out as soon as you have them prepared, because it takes 3 – 5 weeks for the payment to be received in your account or a check to the client. Insurance payments to you can be direct deposits or checks that come in at random times that you can't control.
Another important task needs to be done at the end of each month. I review the accounts to see who still owes me money. I print out client statements or the Billing Slip Tracking document so that I learn how much you have outstanding, because you want to keep that as low as possible. When there is an outstanding balance, I mail the client statements out each month, using envelopes with windows to show the addresses on the billing statement. And if needed, I write a letter to convey my offer to help them make a plan to pay for this. For convenience, I may put their statement in their file to discuss with them at their session. Sometimes I have had to write off their debt as bad debt, so that I didn't continue to generate bills that cost money and time. I write off their debt after I send them three or four notices and get no response. I conclude they are not going to pay their bill. In most cases, you have to make decisions about going to small claims court. If you keep your losses low, it usually is better to write it off, than going through the ethical dilemma of, is this godly? Should I do this? And the cost has to be worth your time and effort. In most cases in small claims court, the judge asks the person if they owe the debt. If they say “Yes”, then the judge says, “Pay it then”. You may be able to negotiate some payment, but you have asked that before in your letters. All this takes time, and leaves a bad taste, in a sense, and to me, I don't have a lot of peace with it
The accounting portion of my work, including billing takes about one and one half hours each week. Reviewing my accounts each month takes about two – three hours once a month. At the end of the year, I spend about five - six hours working with my accountant to settle the taxes for all the quarters of that year. For thousands of dollars, you can hire an accounting firm to do all of this for you from receivables to taxes. If I could afford to do that, I would just get away from the time it takes to do all of this. Now that I have invested the time to learn how to use the accounting system I have, it is not that much work.
Fully answer the following question from the content you just read and submit your answer to find your score and Dr. Dan's answer to the question.
A policy is necessary in regard to the client's use of third party insurance payments. Discuss the policy that has been presented in this course and offer any other alternatives to this policy that you feel might be effective.
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Dr. Dan's Answer:
The policy is that the client pays for the counseling session as he or she receives it. The insurance company is then billed for the highest session cost ($50.00 in the case of BCCM, Inc.) and the payment -- whether partial or in full -- is sent directly to the client.
The reason for this policy is that the turnaround time on an insurance claim can be three to six weeks. This means that clients can accumulate large amounts of outstanding money, which may reduce the counselor's operating capital -- money for wages, office supplies, etc. -- to levels so low that there is no money in the practice for these essential needs.
Payment Policies
Another thing I want you to look at is you should see two forms which say Initial Fee Contract and the Cost & Payment Policy handout that were used in my early years of practice. Let's look at the Cost & Payment Policy handout from my early years in practice, which may look different than the previous counseling fee forms provided to you. First, you'll notice that I've established a cost per session under $35,000 a year, income that the client makes means the session costs him or her $45 an hour. Over that amount, $35,000 it's $55 an hour. If the insurance is billed, then I bill them at $55 an hour, and then the person just gets payment back to themselves. The payment options, it talks about direct payment billing and direct billing to another individual or institution, and then session cancellation policy. What I've got here is pretty important to you, if you have more than one missed session in a row, except in the case of an unexpected emergency situation, the car breaks down. Children, sick, personally, sick, unexpected demands at work can't get off something that's beyond their control. Then it says the counseling will be temporarily suspended and rescheduled into another time or go on the waiting list.
Now this might sound cruel to you, and you're really going to have to think about this and pray about this and ask God to give you peace with what you end up doing, but let me explain the rationale to you. Last week, between Monday and Wednesday, I had seven canceled sessions, and only two of them had legitimate reasons. The five didn't. So, if each one's at $55 then there's a bill in there for $275. If they kept their appointments, it would have been $275 income. So, I'm going to lose half of the income. Now, if I take no charges at all, I lose $275. They don't call. I say, “Oh, it's okay. You can’t help it. Or well, come next week.” If that happens, and I've had up to 12 cancellations in a week for different reasons, if that happens consistently, then I'm going to lose hundreds of dollars a month. Can you see how that impacted my practice income because I didn't have policies in place. I didn’t have a payment policy straight up front, it's not that people necessarily mean to do that to you.
Some clients really don't care, but they don't think about the fact that your time is your income, even though they work a job and they punch a clock, there's something in their minds that's a little bit disconnected between your time and your income. So that's one thing you have to think about and pray about. Another is the people that God sends to you, who genuinely want help, that are waiting, that don't get it, because these people don't keep their appointments. So, you have an obligation, to some degree, to be as efficient with your time for the people that are waiting, for the people that would come if you had an opening, to your own self or to your family in relation to your income. You have to be the judge about what is an appropriate reason to miss. But what I found is that folks are genuinely honest. People will try to be there and have legitimate reasons when they aren’t. Others may just want a free ride, aren't sincere, then they're the ones that need this policy. If they're genuine, after they realize that they can't get away with this, then you can still keep them by putting them onto your waiting list or changing their time may mean they need to miss a little work, may mean their inconvenience. That may not be a really bad thing to happen to them. So, they're not kicked out. They're just held accountable.
The other part of the policy says, "If you're going to miss a session, you must call to cancel it at least 24 hours in advance. If you do not, you will be billed for the cost of the session.” If we go back to that scenario I told you about, where the five clients missed at $55 a session. If we take that same scenario where I bill out and receive $275 (which may be optimistic), I have $275 income versus nothing.
Now let me be really honest with you. What that means is, for example, when I calculate my income on Thursdays and I can pay my bills on Fridays. It means this Friday when I wrote out the check to pay my phone bill, which is a business phone at $70.17 a month, the money to pay this is in the bank account. When I paid my disability insurance for $250 a quarter through the corporation, when I paid my secretary's wages for $200 or when I anticipated paying my wages, the money was there. It's just that simple, the money is there, yet if I don't pay for those things and I hand out my business cards and I do all the things I do, and the phone's dead because I didn't pay the bill, there won't be a practice.
I don't mean to be harsh here or unfair or seem demanding, but that's the bottom line. Nobody else is going to see that this is done. It's your job. It's your place of accountability to God. It's your place of stewardship. For the call is placed in your life to be a Biblical counselor that's professional in every sense of the word. And this is one of the most critical places where. You must be professional, because if you're not, if you're sloppy, if you're fretting over your income, your client's going to see it in a blink. And when you talk about patience and what are the facts and all the stuff of running Cognitive Biblical Therapy, you'll come up like a phony because it doesn't extend into your pocketbook and the finances of your business and how you run your corporation, and what your materials looks like, and your letterhead and all the things that are involved in you being a professional.
So, you need a policy statement to maintain consistency in both scheduling and financial concerns. Missed appointments can cause us to hold open sessions that can be given to others and can have a negative financial effect upon the ministry. When concerns like this come up with clients, you can say (see Cost & Payment Policy handout section IV), “We'll discuss this further during our first session. I'm looking forward to seeing you and to working with you concerning the issue you're facing. The Lord Jesus will and can help you to find practical answers to your concerns.”
Over the years, I adjusted my counseling fees and updated my session fee form to: Explain Fees and Payment Schedule form. I suggest that you take the Cost & Payment Policy handout and fit it to your practice, change the name, but use it. When you talk with a client in your first session, just be really honest. Tell me where you're at. What are your finances like? Maybe you're supposed to pay the higher fee, but you don't have the money. I tell folks, pay the lesser amount, as long as I know what you're going to do and you're consistent, that's fine with me. As the business owner, you will need to work it through and be empathetic with your client. Make sure they understand you can't compromise on this, and that you are worthy as you're hire as they are equally worthy of receiving godly professional Biblical counseling.
Now the other part of what I have them do is to complete the Initial Fee Contract (see handout). Let's begin to discuss what that looks like. Put that in front of you, and we'll work through it. The Initial Fee Contract is going to say something like: Initial Fee Contract, my name, the name of practice, will be at the top of the page. You could put yours there, and let's just work through it for a second. Here it says, I hereby agree to pay so that's whatever cost that you set up, $40, $50 or up to $100 or $150 per session. Whatever you believe will fit your needs, the income, the reality that you don't have overhead, potentially if you're in a church, whatever your situation is, put the cost in there to pay them, to pay so many dollars per session to your name, your credentials for counseling services rendered.
The next paragraph says, “I agree to pay this fee at the time of each session.” People always wonder, when should I pay? Who should I pay? You have to say, potentially yourself, if nobody else receives a fee, and at the end of the session. Then, number 3, “I understand there's a 24-hour cancellation requirement, and that I will be charged one half of the cost of a normal session … .” On this form, it is ½ of the session cost for late cancellation. Yet, you can put a fixed dollar amount, $40, $50 or whatever you want, for appointments not canceled within the 24 hours’ notice.
You may also want to put a phrase in there that this fee is not billable to the insurance company if a person uses insurance because I've had some people say, “Well, if I'm late, just if I don't make it rather, or I don't call you, just bill my insurance company.” They're not thinking, or they're thinking that they can pass on the cost of their irresponsibility to somebody else. If that's the case, next, you will need to say (see number 4), “If the balance should remain outstanding at the time counseling services are deemed by the client and the therapist or counselor to be no longer necessary, I will continue to make weekly monthly payments until the outstanding balance is paid in full.” So, you're obligating them to continue to be responsible for the debt. And you can also add a line that says (number 5), “Payment will be due by the 15th of each month.” You can change that. You can make it on the 30th. You can do it at every billing period. You can do whatever you want there. Then you have a place for the client signature and the date. See a second edition of this form called: Fee and Payment Schedule.
Now I can tell you right up front, this is not, in any way, shape or form, an enforceable legal contract, and you need to make that clear to them that that's the case. What you're doing is entering into a goodwill agreement, and you realize this isn't binding, you also sign it with your name at the bottom and the date. Now what you are trying to establish here is a level of conviction, obligation, things like that. This might seem a little heavy handed. It might seem uncomfortable; it might seem inappropriate. You really have to make this decision yourself, and what I will do, in general, is there are some people that are really obvious that they're fine, they're solid, they're stable. There's not going to be a problem, though for a few, the form will be an excuse for them to not come back to counseling. And if I perceive that, then I won't ask them to sign this, but others, I do as a matter of accountability. And what I'm working towards, because I wrestle with not wanting to appear to be a mercenary, but what I'm working towards is just having a basic packet of information that's part of the initial session that I just give to people.
In your own words, answer the following question and submit to record your response. This question is for your personal reflection -- no score is given.
In a brief paragraph, write out the reason you can use to explain your own Cost & Payment Policy handout to a client. For example, "I want to provide you a clear understanding of … ."
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Standardized Intake Processes
And there's the introductory information forms, the Individual Data Inventory form, and the Initial Session Information form, and the fee disclosures. If you have a website, you can post all your introductory forms on it, for the client to download and fill them out. Or you can email these forms to the client ahead of time, for them to review and complete, in preparation for the first session. The request is to fill out these forms and to look this over and sign it, and if there's an issue, then let's talk about it. So, you're better off to standardize intake and just have this be a matter of course, then to try to use your discernment to tell who's going to be a good risk and who isn't. Because every time you get fooled, you end up with loss of income. And if you get fooled very often, then you have a problem.
So, what I urge you to do here is just incorporate all of the financial and client information forms into your intake process, to explain it to people. And in general, people that are not out to attempt to manipulate you or do not pay will not have a problem with the form. And as I said, it's not a contract, a legally binding document. So, you know, you're not trying to manipulate them, either, or most folks will know that. And if you say that up front, then that's out in the open, and it lets the Lord convict the person more fully. You'll also be able to discern the reaction in the other person, and if they seem a little squeamish or manipulative, that'll tell you some things about their problem and about how you need to be cautious with them in relation to counseling, and what kind of statements they make. Such as, “I forgot my checkbook” (for the third time, or not even a third time for the second time), but you will be able to say there needs to be accountability. You are also saying, “I want to work with you. I need you to demonstrate the right attitude with your payment. If that's too difficult, we'll just postpone your sessions until you come to that point where you catch up. I'm praying for you.” You know several things you can do like that in order to bring all of that to bear, so that you are treated fairly and not manipulated, and you don't help the person do that. Also, there's one more issue we need to talk about, and that's the whole issue of insurance. We're going to continue that discussion next.
Copyright 1987, 1990, 1993 by Daniel D. Wilkinson. All rights reserved. For more information concerning this material, write to:
The Biblical Christian Counseling Ministries, Inc., 2730 Radcliffe Dr., Florissant, MO 63031.
Any reproduction of this material without the express written consent of the author is prohibited. Printed in the U.S.A..
In your own words, answer the following question and submit to see Dr. Dan's answer. This question is for your personal reflection -- no score is given.
Write out a standardized process you can use when you are initially contacted by a potential client. Include the steps the client will need to take (i.e., completing forms, location of office, and payment arrangements) and your next steps (i.e., forms to be sent or provided).
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Dr. Dan's Answer:
Typically, after a client is scheduled the counselor or administrator will either email, mail, or refer the client to a website to complete the ISI and Cost & Disclosure Statement / Fee Policy Agreement. Provide a clear and sincere explanation of the reason behind the process and fee agreement in order to provide them the counseling service.
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