How to Set a Sliding Scale for Therapy?

Sliding scale fees (also known as sliding fee scale or sliding scale pricing) is a flexible pricing model used by many organisations.

These organisations may be healthcare providers, social service agencies, educational institutions.

This is an attempt to price services based on client affordability. Under this model, clients with lower income pay less and clients with higher income pay more.

By the way, such a pricing system means people from all income brackets can pay for and access mental health services, promoting affordable therapy. But setting up such a system is not without its own set of challenges.

How does sliding scale therapy work?

A sliding scale for therapy is a payment system to make therapy more accessible by adjusting the cost based on client’s ability to pay. Sliding scale rates are determined by evaluating a client's income and setting fees accordingly. Here’s how it works:

1. Setting the Scale: Therapists or counseling centers set a fee range from their standard rate down to the lowest rate they can offer. This range is often based on local economic conditions and the therapist’s own financial needs to maintain their practice.

2. Payment Levels: The scale is divided into payment levels or tiers that correspond to different income brackets. Each tier has a reduced fee for therapy sessions.

3. Income Verification: Clients seeking therapy are asked to provide income verification through documents such as tax returns, pay stubs or other proof of earnings. This helps therapists place clients in the right income bracket of the sliding scale.

4. Calculation of Fees: Based on the verified income, the therapist applies the corresponding fee from the sliding scale. This ensures the fee is proportional to the client’s ability to pay.

Sliding Scale Examples

Example 1: A therapist charges $150 per session at their regular rate. They have a sliding scale from $150 to $50. The scale might look like this:

• Income above $75,000: $150 per session

• Income $60,000 - $75,000: $120 per session

• Income $45,000 - $59,999: $90 per session

• Income $30,000 - $44,999: $60 per session

• Income below $30,000: $50 per session

• The minimum fee in this example is $50, which is the lowest amount individuals with financial challenges can pay based on their income.

Example 2: In a community clinic, the sliding scale is from $100 to $20 based on income and family size. The scale might look like this:

• Family income above $100,000: $100 per session

• Family income $80,000 - $99,999: $80 per session

• Family income $60,000 - $79,999: $60 per session

• Family income $40,000 - $59,999: $40 per session

• Family income below $40,000: $20 per session

Important considerations

Special Circumstances: Adjustments can be made for clients with big medical expenses, unemployment or other financial difficulties that aren’t fully captured by gross income.

Review and Adjustment: Mental health professionals may review and adjust the scale periodically to reflect changes in economic conditions or in their clients’ financial situation.

This way therapists can have a diverse client base and services are accessible to those at different economic levels.

Problems with setting a sliding scale

Some people think sliding scale is unwise, problematic and unnecessary.

Because most sliding fee scales used by non-profits and other organizations base the fee on the financial situation of the billable party.

To make it work, information and supporting documents like tax returns to verify the income of the billable party are required.

Most practitioners don’t want to go through the hassle of implementing such a cumbersome process. Plus it may be tedious or even seem invasive to those being charged themselves.

Some professionals have gone even further.

These professionals just trust the clients to tell them the truth about their income instead of going through the hassle of examining tax documents and paperwork to determine a sliding fee scale.

They say it worked fairly well but they always worried that this conversation could be a problem (Walsh & Dasenbrook, 2008).

Talking about money to determine affordability and whether people can afford it makes people uncomfortable and makes them not want to go to therapy.

Another issue for healthcare providers is when they have contracts with managed care companies.

According to these contracts the companies are supposed to pay a certain percentage of the provider’s usual and customary fee.

The problem here is when the managed care company chooses to pay the provider on the lowest fee for that specific case. In this case the provider loses and will be hesitant to implement a sliding fee.

Another limitation of sliding scale therapy is for clients who have health insurance. Sliding scale fees are designed for people paying for services directly, as many insurance companies do not cover most mental health care or only cover a small percentage. This makes it less expensive to pay out of pocket with a sliding scale fee than to use health insurance.

Another criticism of sliding fee scale is that people with higher income are charged more for the same service being provided to people with lower income.

Along those lines it’s been said that a sliding scale can feel like gouging — you’re trying to squeeze as much money as you can out of someone.

That’s why people aren’t charged according to income in a doctor’s office, at the grocery store, at the gas pump or at the dentist. This makes people who pay full feel like they’re being taken advantage of.

Why setting a sliding scale in your practice might be a good idea?

Despite the hassles of implementing a sliding fee scale, it’s worth the extra effort to provide mental health support.

First and foremost, sliding scale fees in therapy make mental health services available and accessible to people who otherwise wouldn’t be able to get the help they need.

A lower fee means people on lower income and tight budget can improve their lives, the reduced financial burden makes what was once not possible now possible.

Plus a sliding scale fee benefits mental health providers too. They can attract a wider range of clients, expand their client base and diversify their practice.

They may also get to work on different issues than they did with their previous clients.

The new challenges that come with working with diverse clients can add to mental health providers’ own toolbox.

Plus reducing the financial burden of existing clients will also make the therapeutic process easier. The client can now come to therapy less worried about the usual unaffordable fees and just focus on wanting to get better. So it’s good for both client and practitioner.

How to implement the sliding scale?

To implement a sliding scale fee for therapy services, you have to make a scale. This can be quite challenging for a mental health professional who’s doing it for the first time.

In this case they may ask help from their colleagues who are using one or seek guidance from the facility they are employed with.

For instance Hospital ABC has a mental health clinic whose goal is to treat as many clients as possible. Some of the specialty doctors at the ABC don’t take insurance so patients have to pay out of pocket.

The average cost for a patient then is $500. The hospital has implemented a sliding scale fee structure for treatment. Based on certain income then the cost per patient visit varies from $100 to $700. Lowest income earners then pay $100 and highest earners pay up to $700. So people pay according to their capacity and the healthcare providers get what they deserve and can serve most of their clients.

Setting up a sliding scale fee may be a hassle at first but once done it’s endless rewards. It’s recommended that new health care providers wait until they have a stable client load before they implement a sliding scale fee. This way they won’t get underpaid and overworked and will still want to help people.

Once they have a good client load they can implement a sliding scale fee which is good for both them and their clients. For their convenience they can even limit the reduced fee structure to a certain number of days only.

The above mentioned are just a few of the many ways health care providers can serve their clients. How a practitioner will implement it should be suitable to their and their clients’ situation, it should add value to the therapeutic process and not be a source of stress.

Last words

Sliding scale fees may be a hassle but it’s very important in mental health services to manage therapy cost. This flexible pricing system makes therapy available to a wider range of people, especially those with lower income and in doing so it reduces the financial burden that’s a barrier to seeking help.

While income verification and money talk can be a hassle, the benefits for clients and mental health providers outweigh the challenges.

Sliding scale fees not only expands the reach of therapy but also the experiences of the practitioners, making them more expert and creating a more open therapeutic space for clients.

This fee structure allows people from all walks of life to get the help they need, not being able to afford therapy doesn’t mean people don’t need it. People from all walks of life are living with their own set of challenges and need help and guidance from trained professionals.

As a mental health provider it’s probably your top concern. The sliding fee structure if done right allows all parties to set a fee that’s good for everyone. With sliding scale fee many lives can be changed.

References:

Rollins, J. (2022, July 27). The complications of sliding fee scales. Counseling Today. https://ct.counseling.org/2008/04/private-practice-in-counseling-the-complications-of-sliding-fee-scales/