Running a mental health practice involves more than just providing quality therapy. It also means managing your business finances effectively to keep your practice sustainable. One question many providers ask is: Can I charge clients additional fees beyond what insurance reimburses? Specifically, can you collect fees for no-shows, late cancellations, or other administrative costs?
In this blog post, we’ll cover:
- Whether it’s legal and ethical to charge these additional fees
- Common types of fees providers collect
- How to communicate fees clearly to clients
- Best practices for implementing and collecting additional fees
- Considerations when working with insurance
Are You Allowed to Charge Clients Additional Fees?
In most states, mental health providers can charge additional fees such as no-show fees or late cancellation fees, but it’s crucial to follow state laws, professional ethics, and insurance contract terms. Many professional boards allow these fees as long as they are reasonable, clearly disclosed, and applied consistently.
However, some insurance companies and payer contracts may restrict or prohibit charging fees for no-shows or cancellations if those fees are billed separately or submitted to insurance. You typically cannot bill insurance for no-show or late cancellation fees, but you can collect these fees directly from clients as part of your office policies.
Bottom line: Review your state laws, licensing board guidelines, and insurance contracts before setting or enforcing additional fees.
Common Types of Additional Fees
Here are some of the most frequently used fees mental health providers collect outside of insurance reimbursement:
- No-Show Fees: Charged when a client misses a scheduled appointment without notice
- Late Cancellation Fees: Charged when a client cancels within a specified time window (often less than 24 or 48 hours)
- Returned Check Fees: Charged if a client’s payment bounces or is declined
- Payment Plan or Administrative Fees: Charged for special billing arrangements or extra paperwork
These fees help offset lost income caused by missed appointments or administrative work. For example, a missed 50-minute session can mean a loss of $100 or more that the provider cannot bill to insurance or fill with another client.
How to Communicate Additional Fees to Clients
Clear communication and transparency are critical when introducing additional fees to your clients. To avoid misunderstandings and maintain a positive therapeutic relationship:
- Include your fee policy in your informed consent document and client contract
- Review your policy verbally during the intake or first session
- Provide clients with written reminders of your cancellation and no-show fees
- Be consistent but flexible—consider exceptions for emergencies or unusual circumstances
Here’s an example of a clear policy statement:
“Clients are expected to provide at least 24 hours’ notice for cancellations. If an appointment is missed or cancelled late without sufficient notice, a $75 fee will be charged. This fee is not billable to insurance and is the client’s responsibility.”
Best Practices for Implementing and Collecting Fees
- Set a reasonable fee amount that reflects your time and lost revenue without being punitive
- Use multiple reminders (email, text, phone) to reduce no-shows and cancellations
- Consider waiving fees occasionally to maintain goodwill, especially for first-time offenses or emergencies
- Collect fees promptly—ideally before the next session or as part of the client’s next payment
- Document all communications and policies related to fees in your practice management system
What About Insurance?
It’s important to understand that no-show and late cancellation fees are generally not reimbursable by insurance companies and should not be submitted as claims. Attempting to bill insurance for these fees can result in claim denials or violations of payer contracts.
If your clients have insurance, inform them that these fees are their personal responsibility and separate from what insurance covers. Having a signed financial agreement or contract that clearly outlines this helps prevent confusion.
Protect Your Practice Financially While Respecting Clients
Implementing fees for no-shows and late cancellations can help protect your practice’s financial health by compensating for lost time and revenue. When done thoughtfully—with clear communication, fairness, and adherence to legal and ethical guidelines—additional fees are a reasonable part of running a sustainable practice.
If you’re unsure how to structure your policies or want help managing billing and collections, working with a mental health billing specialist like Anchor Point Billing Solutions can reduce your administrative burden and maximize your revenue.
How Anchor Point Billing Solutions Can Help
- Assistance drafting clear client financial policies
- Support with client invoicing and payment collection
- Managing insurance claims so you focus on clinical work
- Expert guidance on billing compliance and best practices
Ready to take control of your practice’s finances and improve collections? Contact Anchor Point Billing Solutions today to learn more.