Are your billing practices in your favor?

About the Author
Eric C. Marine is Vice President of Claims for the American Professional Agency, Inc. and a frequent writer on topics or risk management in the mental health field. O. Brandt Caudill, Esquire is a prominent defense attorney with the firm of Callahan, McCune and Willis in southern California. He attended the "Ramona" trial as an observer. Mr. Caudill has published numerous articles on mental health care issues and the law. Sylvan Schaffer, J.D., Ph.D. is both a practicing psychologist and a lawyer in the greater New York City area. He serves as Legal Counsel for the New York State Psychological Association and has written extensively on risk management topics. 

Dr. Benson has been working with Lisa T. for a long time. Lisa was a victim of spousal abuse and had experienced a traumatic childhood. During therapy, she had been late in paying Dr. Benson's fee, but she had always made an effort. Dr. Benson was pleased with the overall course of treatment. There were the inevitable setbacks, but overall it was having a positive effect on Lisa. She was making progress. Suddenly, Lisa reached a point that she couldn't work through. Both Lisa and Dr. Benson were stymied. Therapy languished on this point for a long time. This setback in therapy was disturbing to Lisa. She fixated on it and her apparent failure to clear this obstacle. She spent many hours a day reflecting upon the problem. Slowly, her attitude toward Dr. Benson changed. She no longer say him as helping her. Instead, she started to blame him for the stalemate. Dr. Benson took this situation in stride. He knew the therapy process was fraught with pitfalls and he would help his patient work through this one. He was supportive and did not become defensive when Lisa started to voice her displeasure with the many facets of therapy. 

What Dr. Benson didn't see was the extent of her outstanding balance for his fees. He did not want to add to her burden while Lisa was having difficulty with therapy. When the outstanding balance went over $3,000, Dr. Benson decided to mention it in passing. He thought he was showing Lisa how much he had invested in getting her through this difficult phase in her therapy. Lisa felt otherwise. In what proved to be their final session, the matter came boiling over. Lisa said she was aware of the amount due, but that she was not going to pay it. She let loose with all the frustration that had built up inside of her. When Dr. Benson tried to calm Lisa, she stormed out of his office. When Dr. Benson failed to collect any of his money in the next six months, he turned the matter over to his attorney. The attorney filed suit against Lisa. With the answer to the fee collection action came a counter suit for malpractice. Now, Dr. Benson was tied up with this action for many years and he did not collect his fees. This scenario is not that uncommon. What Dr. Benson forgot was that he was running a business. The therapy was so intense that he forgot to keep an eye on the books. Some business sense, coupled with this professional acumen, could have told him what was likely to happen with Lisa T. I must be stated against the private practice therapy is a business. All businesses face some degree of non-payment. What other businesses don't face is the possibility of their professional activity being called into question in a court of law. 

The following suggestions can be lower the chances that a malpractice suit related to a fee collection dispute will ensue: 

1. Develop a billing and collection procedure. Include procedures for handling reduced fee and pro bono therapy. 

2. Inform the client of these procedures in writing at the outset of therapy. 

3. Be consistent in the application of the procedure. 

4. If the balance gets significant, immediately discuss it with the patient. Help the patient develop a payment plan. 

5. If it becomes apparent that the patient cannot pay and you cannot continue the patient on a reduced fee or pro bono basis, refer the patient to an appropriate facility or provider who can provide therapy with the patient's ability to pay. 

6. Take great care when accepting bartered goods or services in payment for therapy. Accepting bartered services is likely to create a dual relationship and, therefore, should be avoided. Bartered good are acceptable as long as the agreed value of the goods is reasonable and documented in your records. 

Since patient satisfaction is the main form of advertising in private practice, anytime your name appears in the newspapers as a defendant in a lawsuit, you severely restrict you client base. Remember the allegations are news, the dismissal of the suit is filler. Disclaimer: The information provided in this scenario is a composite of actual claims. However, identifying names, locations, and circumstances have been masked to assure confidentiality.