Should You Offer a Sliding Scale?
If you’re looking for one guaranteed way to make a therapist cringe, ask about sliding scales. Specifically:
- Do you offer a sliding scale?
- Why don’t you offer it?
- Should you offer it?
- What is an appropriate minimum rate for a sliding scale?
- How do you decide who deserves reduced rates?
Cringing yet? No doubt, these types of questions are maddening. But these are the very questions you must ask yourself because eventually someone else will ask them of you.
When you delve into the topic of sliding scales, be prepared for both ardent supporters and passionate opponents.
In this post, we won’t take a hard stance for or against sliding scales, but we will go over the pros and cons of implementing one in your private practice. We’ll discuss how to determine if this system is the right option for you and your clients. And finally, we’ll also provide you with excellent alternatives to the sliding scale model if you’re still uncomfortable with the idea of reduced rates.
First, let’s start with a quick definition of sliding scales.
What is a Sliding Scale?
A sliding scale is a flexible fee system. The fee that the client pays can “slide” up or down based on the client’s ability to pay. A sliding scale usually takes into consideration the client’s household income.
Now, let’s discuss the benefits of using a sliding scale.
The Benefits of Offering a Sliding Scale
It Fits With Your Philosophy
As a mental health professional, you provide a useful and honorable service to your clients—one that brings both peace and clarity. You don’t want to exclude anyone who’s willing to do the work because they can’t pay.
You got into mental health to help people, and the more people you can help, the better! You’re uncomfortable with the idea that someone cannot get the help they so desperately want and need. You believe that everyone should have access to proper mental health care, and you want to live what you believe.
Offering reduced fees means that you can help more people, and that’s exactly what you want to do.
It’s More Affordable for Your Clients
Your clients will pay what they can afford to pay. Your clients won’t have to make the unholy choice between paying for mental health or paying their monthly utilities.
Obviously, there’s some danger in offering reduced fees because not everyone will be honest about they can afford. But, in an effort to keep everyone honest, you should consider asking the client to provide proof of their household income.
You’ll See More Clients
No insurance? No problem.
Insurance, with its low copay requirement, often makes mental health more affordable for your clients. But what about the clients who don’t have insurance? Or what if you don’t accept insurance to begin with?
Offering reduced fees based on what a client can afford automatically opens the door for more potential clients.
You Can ByPass Insurance Companies and Offer Anonymity
Dealing with insurance companies can sometimes feel like running through an obstacle course. Insurance companies can refuse to cover several diagnoses and the associated treatments. They can also require constant updates and authorization. The paperwork alone is enough to make your life miserable. And of course, you don’t want to get into the dangerous game of misdiagnosis to fit insurance requirements.
And then there’s the release of private information about the client.
Some clients simply don’t want their insurance company (or anyone but their therapist) to know their personal details. They don’t just want to be labeled or they don’t want some third party payer to have access to their mental health records.
By offering self-pay, you can provide anonymity for these clients. And by reducing that self-pay to a more manageable rate, you can service more clients.
The Negatives of Offering a Sliding Scale
You’ll Potentially Devalue Your Services
It’s one of the biggest dangers of offering a sliding scale: devaluing your own service. Sure, it doesn’t seem like you are. It seems like you’re helping people who couldn’t normally afford your services.
But, on the flip side, what message do you send when you discount your services? My services are priced too high to begin with? You’re not going to get the same quality care as my regular pay clients?
Some therapists also believe that clients are more invested when they’re more invested. In other words, when clients are required to pay more for a service, they’re more likely to assign a higher value to it.
This isn’t always the case, of course. There are many people who absolutely cannot afford to pay higher rates but will still value and benefit from mental health services.
You’re Slighting Your Other Clients
Is it fair to offer some of your clients a reduced fee while forcing other clients to pay the full fee for the same exact service?
With a sliding scale, you’re subsidizing your client base. Your full-fee clients are, in essence, paying the difference for your reduced-fee clients.
Plus, it can be confusing to your clients why you offer some reduced fees while they must pay full rate. This is why you need to have a clear and transparent policy for offering a sliding scale, if you choose to implement this system in your private practice. Every client should know it exists and who it exists for (and the requirements of getting a reduced rate). Also, your full-fee clients should know that their higher fee will subsidize your reduced-fee clients.
You’ll Work Longer Hours
Trying to squeeze in enough reduced-fee clients to pay the bills will inevitably make for longer hours. If you charge a client 50% less than a full-fee client, you’ll have to see twice the number of reduced-fee clients. When you implement a sliding scale system in your private practice, you will work more for less—there’s no way around it.
Working longer hours will also put you at increased risk of burnout.
You Actually Don’t Want to Reduce Your Fees
You feel like you’re being forced to reduce your fees because other practices around you offer reduced rates. But when you’re trying to compete with the “affordable” therapists around town, it’s a race to the bottom of the barrel.
Because you’re concerned that potential clients will choose them over you based solely on price, you desperately implement a sliding scale to compete.
While some people will always choose the lowest price, many people place a premium on quality mental health care, and won’t choose you because you offer the cheapest rates. In fact, it may be a filter to not choose you.
Stay true to what you feel is right to do, and not just go with what everyone else is doing.
You’re Making It About You
Are you charging reduced fees to feel better about yourself?
Perhaps you’re struggling with insecurities such as:
- I’m new and I don’t have a lot of experience.
- I have a small practice.
- When I charge my full fee for self-pay clients, I feel like a fraud.
Any of the above can taint your thinking and make it impossible to create a fee schedule that you can live with.
I get it. Money is one of the most uncomfortable topics in any conversation—whether that’s with friends, family, or your clients. Payment can be inextricably tied to your own feelings of self-worth. If you opt to do a sliding scale or reduced rates, make sure it’s not coming from a place of insecurity.
Before You Decide, Consider This:
Here are a few things to consider before deciding to implement a sliding scale in your private practice:
Have you considered how much you are willing to slide?
Set the range of your sliding scale in stone. Never go lower than the minimum you’ve set for yourself. Be willing to refer clients who cannot pay your minimum to other low-cost options.
Have you considered how many you are willing to slide?
Decide how many people you can afford to place on a sliding scale each month, and don’t go over that amount.
Have you considered offering a limited engagement?
If the idea of offering a sliding scale is making you itch, consider offering a limited treatment plan for individuals who cannot pay your full rate. Only allow a certain number of clients each month to pay this reduced rate. Make it clear that this cannot be an ongoing arrangement. It should have a definite start and end date. It’s up to you if you choose to create another limited engagement with the same client.
Have you considered reducing office visits?
Instead of one hour, consider meeting with a client for 30 minutes at half the hourly rate. This option makes it more affordable for the client without decreasing your actual full-fee.
Have you considered if your sliding scale complies with your other agreements?
Have you signed an agreement with an insurance company? These agreements often make it clear that you can’t charge clients differently for the same service. For example, you can’t charge cash paying clients a lower fee than you agree to charge the insurance company. Be sure to look over your contracts (or have a lawyer do it for you) so that you avoid potential legal matters.
Are you interested in offering sliding scale services?
We’re partnered with a wonderful organization, Open Path Psychotherapy Collective. Open Path Psychotherapy Collective is a nationwide network of mental health professionals dedicated to providing in-office mental health care—at a steeply reduced rate—to individuals, couples, children, and families in need. They connect clients who are uninsured or underinsured with therapists who offer reduced fee sessions within a $30-$50 sliding scale.
Learn more and join here: http://openpathcollective.org/therapists/.
Here are a few related resources for you to check out:
- Private Pay or Insurance: Which One Should You Choose for Your Private Therapy Practice?
- Therapist Burnout: Recognize the Signs and Avoid It
- The Top 7 Mistakes to Avoid in Your Private Therapy Practice