Should You Offer a Sliding Scale in Private Practice?

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Depending on who you ask about sliding scales, you’ll hear strong opinions in different directions about best practices. Some therapists say that it’s unethical to offer a sliding scale in all circumstances, whereas others will say that it’s our duty to offer a sliding scale. Though I’m not a legal authority when it comes to offering a reduced rate in private practice, there are some key items to consider before offering a sliding scale. In this video I go over some key questions to consider when offering a sliding scale.

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This video is geared for therapists of all kinds, including psychologists, MFTs, LPCCs, social workers, and others in the clinical counseling field.

Welcome to Private Practice Skills! I’m Dr. Marie Fang, psychologist in private practice. I post videos offering tools I learned the hard way about starting and growing private practice so that you don’t have to.

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This video is not intended as professional or legal advice. Be sure to seek the services of a professional if you are in need of them.

So first, what is a sliding scale? A sliding scale is a reduced rate offered to those with fewer resources. A sliding scale is NOT charging clients different rates based on their stated preferences or based on how you feel. It is not a sale or a discount, either. The reduced rate is based on a client’s resources.

I know many therapists who say they offer a sliding scale, but in reality they allow the client to set their own rate. When discussing the fee, they ask the client how much they’re able to pay and charge that amount. This is not a sliding scale, and could potentially be unethical.

Who is allowed to offer a sliding scale?

If you bill to insurance, it’s likely that you’re not allowed to charge a sliding scale fee for your clients who pay out of pocket. The reason for this is it starts to look like insurance fraud: You charge one rate to insurance when you bill them, but you charge something much lower when someone sees you out of pocket. This is a huge no-no. If you are on insurance panels, always make sure to check with them directly before offering a sliding scale.

If you have a cash-based practice, then it could be an option to offer a sliding scale. However, you also need to check with your state laws to see if there are any restrictions about offering sliding scales there.

Here are some items to take into consideration before offering a sliding scale:

1. What is your reason for offering a lower rate?

For me, I enjoy working with college students, grad students, and psychology interns. These individuals definitely cannot afford my full rate without significant hardship. By offering a rate that reflects their income (or debt as the case may be), therapy is much more accessible for them.

2. How many clients are you willing to see at a reduced rate?

Some people have a certain number of slots available at a reduced rate. For me, the majority of my clients are high income earners, so only a handful of clients pay less than my full rate.

3. How low of a rate are you willing to offer?

Do some math here. Consider how many clients you’ll be offering a reduced rate to and how much income you intent to earn. If you need some help calculating how much to charge, check out my video about setting your rate where I help you do the math.

4. How will you assess a potential client’s resources when offering a reduced rate?

We can only offer a reduced rate based on resources. I suggest you you offer a scale that directly corresponds to a potential client’s gross income. I’ve set mine up such that if a clients attended therapy weekly, 10% of their gross monthly income goes to counseling. This helps create a sense of balance so that those paying my highest rate are bought in with the same percentage of their income as those paying my lowest rate. Of course, I have an upper and lower cap on how high and low this goes, but it creates a system for determining how much to charge.