8 Ways to Improve the Financial Health of Your Practice

Therapists, if you’re wondering how to improve the financial health of my practice, here are 8 ways to improve the financial health of your practice.

As a therapist in private practice, you may believe your income is directly tied to the number of therapy sessions you provide in a given week or month.  

But, have you been curious about how to increase cash flow in your practice without seeing more clients?  

This article will outline 8 ways to improve the financial health of your practice—without having to work extra hours or put more effort into administrative tasks.

Focus on client retention

First up on the list of 8 ways to improve the financial health of your practice? 

Focus on client retention.

What percentage of your new clients continue sessions with you and become ongoing clients? Keeping clients is something we can’t take for granted.  

Therapists don’t talk much about client retention. However, it is important to remember that it can be more expensive to attract new clients than it is to retain current clients.  

For this reason, it is worth putting thought into what you can do to retain clients once they have contacted you.  

For example, are you noticing any patterns in those that leave treatment? Are you reaching out to your least engaged clients to address the issue or to get feedback?

Send appointment reminders in the client’s preferred format

Next on the list of 8 ways to improve the financial health of your practice: Appointment reminders. 

While 82% of SimplePractice clinicians report sending appointment reminders, nearly one-fifth of therapists are still overlooking this simple and effective way to decrease missed appointments. 

Start by asking clients their preferred method of receiving these reminders, offering options such as text, email, and voice.  

This increases the likelihood they will show up, and helps avoid uncomfortable arguments about your no-show or cancellation policy and clients needing to pay for missed sessions.

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Consider offering telehealth services

While this may seem obvious, telehealth is an unbeatable way to reach more clients for any therapist thinking about “How to improve the financial health of my practice?”

Being set up to deliver telehealth sessions can significantly cut down on missed sessions. 

For example, a client can still attend a session if they are ill, their car is in the shop, their child is home sick, or the babysitter doesn’t show up. 

Additionally, telehealth makes it possible for you to see clients who don’t have transportation to your office. 

What’s really a game-changer is how telehealth makes it possible for you to see clients who live anywhere in the state where you are licensed, or even those who live in other states where you are licensed or permitted to practice, for those clinicians with multi-state licensure. 

This increases access to treatment for clients and greatly increases the client pool you can draw from.

Therefore, it's probably no surprise that nearly three-quarters (72%) of SimplePractice clinicians offer sessions via telehealth. 

Consider requiring a credit card to book appointments (and to pay for missed appointments)

Keeping a credit card on file can be an incentive for clients to show up to their appointments, ultimately improving your private practice finances.  

Many therapists have clients pay them by cash, check, Zelle, or Venmo. 

Alas, one problem with all these payment methods is that they all require the client to initiate the payment. And clients may not want to pay you for a missed session, or for balances owed. 

Getting a credit card at the start of treatment from all clients allows you to charge clients when needed. 

Be sure you have the client sign a Credit Card Authorization Agreement at the start of treatment, which outlines when you will charge their credit card.  

How does having a credit card on file prevent no shows? 

When a client contacts you with a late cancellation, you can gently remind them about your no show or cancellation policy. Let them know that they will be charged for the session in full if they are unable to attend. 

Often, with this reminder, the client will find a way to be there at the session.

Enforce your no-show policy

Almost every therapist has a no-show policy, stating that if a client does not show up for a session or doesn’t cancel with some notice, there will be a fee.  

However, enforcing these policies can be a major blind spot for many therapists. 

Therapists may appreciate getting an unanticipated free hour in their day, and they may also feel uncomfortable charging a client who hasn’t received therapy.  

Unfortunately, therapists may not realize how much income they lose when they do not enforce their own policies. 

For example, if a therapist were to excuse one missed $150 session each week, this would result in a loss of about $7,500 per year, and two missed weekly sessions would mean about a $15,000 income loss per year.  

The key steps to stopping this kind of income loss for no-shows are to:

Decide on your policies  

Think through all the potential scenarios. 

What, if any, exceptions will you make?

Communicate  

Discuss your policies at the start of therapy and throughout treatment. 

It’s not enough to say to clients “I have a 24-hour cancellation policy.”  

Explain why this is important, how they should communicate with you any need to cancel, and have the client affirm their understanding of your policy. 

Stick to it 

Enforce the policy. Make it clear that you reserve the time for them, and that your time and services cost money. 

Enforcing your policy will also cut down on later no-shows or late cancellations. Finally, sticking to your word is important in establishing boundaries with clients and affirming that you mean what you say.

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Verify insurance prior to providing services

One of the biggest mistakes in-network insurance clinicians make that can lead to income loss is not checking insurance coverage before treating clients.

This often happens when you trust what a client tells you about their coverage, or you make assumptions about coverage based on other clients who have the same health plan.  

One common issue that can come up is when the health plan doesn’t pay for your services because the client has a large deductible which must be used up before the health plan will pay at all. 

This can leave you with a big unpaid bill when your claims aren’t paid. 

SimplePractice automatically checks your client’s eligibility and allows you to review ahead of your appointment so you have peace of mind that clients are covered when filing insurance claims. After an insurance status check is run, we’ll show you if the plan is active, inactive, or if you should review the information.

According to SimplePractice data, 57% of SimplePractice customers verify insurance prior to rendering services. But for in-network therapists working with their insurance clients, this number should be closer to 100%.

Require payment at the time of service

Many clinicians bill clients at the end of the month for a month’s worth of sessions. 

Others may be out-of-network clinicians who bill insurance first on behalf of clients before collecting from clients.  

However, both of these practices can involve financial risk. 

Clients can drop out of treatment or get angry at you for sending them a large bill, leaving you unpaid. Or, maybe the client’s financial situation has changed and they are unable to pay your monthly bill. 

Spending time creating, sending, and following up on unpaid invoices creates more paperwork for you.  

And for out-of-network clinicians, billing insurance before being paid by clients has recently become very risky, as you are not guaranteed any specific reimbursement rate with the health plan, and more clinicians are reporting significant rate drops and fluctuations—if they are paid at all. 

Negotiate your reimbursement rate with insurance plans you work with

While it is perfectly within your rights to contact insurance providers to ask for an increase to your reimbursement rate, be prepared to give reasons why the insurance plan should give you a raise.  

During these communications with the insurance networks, avoid mentioning your increasing expenses as one of the reasons for the request to increase your reimbursement rate. 

Instead, focus on what you have to offer the client populations, including other languages you speak fluently enough to conduct therapy, special training, specialties, experience, populations, or provider diversity that you bring to the table.  

For a full list of steps on how to ask for a raise, go to our article on tips for asking for a reimbursement rate increase.

Plus, download the free 8 ways to improve the financial health of your practice infographic at the top of this article for printable insights and steps to improve your practice finances in the areas of client relations, billing guidelines, and insurance.

How SimplePractice streamlines running your practice

SimplePractice is HIPAA-compliant practice management software with everything you need to run your practice built into the platform—from booking and scheduling to insurance and client billing.

If you’ve been considering switching to an EHR system, SimplePractice empowers you to streamline appointment bookings, reminders, and rescheduling and simplify the billing and coding process—so you get more time for the things that matter most to you.

Try SimplePractice free for 30 days. No credit card required.

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