Collecting cancellation fees is a part of business but can be a challenging task and often comes with angst. Therapists can find it just as challenging to charge the cancellation fee as it is for the client to pay it, so much so that therapists often waive the fees at their own expense. This is the topic of many consultations and articles as therapists waive thousands of dollars in cancellation fees each year. However, fees are a common consequence of canceling most commitments with short notice regardless of the reason. Examples include missed flights, hotel reservations, self care appointments such as haircuts or massages, and in some cases even dinner reservations.
So why is it so challenging to enforce cancellation fees? There are a few reasons why this transaction comes with complications, including issues with accountability, the difficult relationship many of us have with money, and the layered relationship between therapist and client.
There is a lot about the behavioral health industry that clients and the general public do not know. For example, clients may not realize that if they cancel a session, insurance companies do not pay the therapist. As far as the insurance company is concerned, if a service is not provided then they will not reimburse a fee. Similarly, flex spending accounts cannot be used for cancellation fees. If a cancellation fee is not collected, then typically the therapist is not paid for their time.
If the therapist is not given enough notice to fill the time with another client, they will lose that hour of income altogether. Just one canceled session each week can add up to over $8,000 a year. At the same time, insurance reimbursement rates are stagnant and have not kept pace with inflation. As a result, therapists are under financial pressure, and too many canceled sessions worsens the problem.
The nature of a psychotherapist’s work is very relational. Empathy and compassion for clients are at the core of the therapeutic relationship. It can create dissonance when therapists try to hold empathy for why a client might not be able to keep their appointment while still charging their credit card for the missed session. Clients may feel confusion and resentment if they are charged when there is seemingly an emergency, especially if the policy is not consistently upheld. Therapists want to be flexible, and they don’t want to damage the relationship with their client. Therapists who fear losing a client often bend their own rules. Conversations about cancellation fees can be particularly difficult if the client stresses about money or carries shame about it.
Whatever topics we don’t initially discuss become more difficult to talk about over time, especially if they carry shame. Many of us find it difficult to talk about money because we are not taught how to discuss it in our culture. Family history often adds its own complications. Even bringing up cancellation fees or unpaid balances can be difficult for therapists and clients alike.
A firm and consistently applied cancellation policy serves the therapeutic function of modeling appropriate boundaries and accountability. It challenges clients to make themselves a priority. It recognizes that therapists are impacted by client behaviors. Inconsistent attendance and frequent cancellations are unproductive from a treatment standpoint and cause stress for the therapist.
Mental health professionals and their practices are not treated with the same respect as other healthcare professionals. Clients have even sent abusive emails to their therapists and billing departments in reaction to a cancellation fee, even when they were informed and consented to it. Would that same person verbally assault their doctor or staff under similar circumstances? Therapy practices are typically small businesses that run on tight margins. No one goes into the mental health industry hoping to get rich, they do so to help others.
The most important thing clients can do to help is let their therapists know well in advance if they are going to miss a session. Since therapists will often “save” preferred times for clients, it is helpful if you know in advance that you will be traveling or just might not make the anticipated appointments for whatever reason, as a courtesy please inform your therapist as soon as possible. This will allow therapists to make other arrangements and accommodate other clients who need to come in. A month’s notice can make a big difference in a therapist’s schedule.
Appointments that are canceled less than 24 hours in advance often involve unavoidable circumstances. The client may be ill or have to pick up a sick child, or they were called into a work meeting. Clients should know that cancellation fees are not a punishment. Rather, they support the business and its staff, ensuring they can continue to provide therapy.
This article has been a long time coming. After 23 years in the mental health field and 15 years in private practice, I’m sharing this information from a place of experience. Therapists are not big corporations, many are small businesses trying to support their staff and families. Therapists want to ensure clients are provided with the quality services they deserve. If you are charged a cancellation fee, please be kind and understanding, as that fee helps your therapist continue providing care.