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[00:00:00] Dr. Sharp: Hello, everyone. Welcome to The Testing Psychologist podcast, the podcast where we talk all about the business and practice of psychological and neuropsychological assessment. I’m your host, Dr. Jeremy Sharp, licensed psychologist, group practice owner, and private practice coach.

All right, y’all, welcome back to the last episode in the beginner practice launch series. As before, if you have not checked out the previous beginner practice launch episodes, definitely go check those out. I would say that the past 4 or 5 episodes are all geared toward folks in the beginning stages of practice because I am recruiting for the next cohort of the beginner practice mastermind group that starts in April/May. You can get more information at thetestingpsychologist.com/beginner.

Today’s episode is all about ways to collect payment in your testing practice. It might seem like a simple topic right off the bat, like, [00:01:00] hey, you just take payment, but there are many variations and ways that I’ve seen people do it. And I would like to talk through some of those so you can start to figure out what might be the best way for you.

So let’s go ahead and jump to the episode.

Okay, y’all. Again, here we are talking all about collecting payment. On the surface, you might think this is super easy. Jeremy, what are you talking about? Why is this a podcast episode? You simply provide your services and then you take payment for the services. Well, there are many ways to do this and some might work better for you.

Let’s start with the very simplest way to take payment. And that [00:02:00] way is to not accept insurance and have folks pay cash right up front for your testing services. Now, the likelihood that someone is doing this is pretty low. Actually, I haven’t run into any practices that only accept cash all upfront for their testing services, but it is certainly possible.

So this would save you the vast majority of administrative headache that comes in when we’re considering taking payment. You wouldn’t have to deal with credit card fees. You wouldn’t have to deal with installment payments or people not paying or checks bouncing. It’s pretty straightforward. Unfortunately, like I said, this does not happen very often, especially as the price for testing goes up.

So let’s assume that’s not going to be happening. Then where do you go from there? Well, if you are private pay, you have a [00:03:00] lot of flexibility about how you might want to accept payment in your practice. Insurance does limit some of these options and I’ll talk about that in a minute, but if you’re doing private pay, you have options.

The first question is, will you take credit cards? Big question. Anytime that you accept credit card payments, you will pay a processing fee of about 2.5% of the total transaction cost for the privilege to run a credit card. Some people say, oh, that’s not worth it to me. I’m just going to accept checks or cash. That’s totally fine. You do run the risk of checks bouncing, people not having checks, that sort of thing, but it is certainly doable to only accept checks or cash.

If you decide to take credit cards again, 2.5% fee, give or take, you can roll that fee into the cost of your [00:04:00] testing and simply up your price a little bit. It’s relatively minimal. Just to give you an example. For every $100 you’re charging, you would increase the cost by $2.50. So not too much. Overall for a $2,000 evaluation, this would add $50 to the cost of the evaluation. Totally fine.

So if you decide that you want to accept credit cards, which I think is a good choice, I think it’s convenient. I think it lets people pay for larger balances over time and not have that money immediately accessible in a checking account, which is helpful when we’re talking about a high-dollar service like testing. If you do decide to accept credit cards, then the question is, when do you charge those payments?

I work with a lot of practices and a lot of folks who choose to take a deposit right upfront. They [00:05:00] charge a non-refundable deposit to even book an appointment. I think that this is helpful and it does increase people’s buy-in to the testing process. It also makes it easier for you to manage your schedule because you’re not dealing with last-minute cancellations if folks get to be seen somewhere else a little bit quicker.

I think it’s a good move. It doesn’t have to be a crazy high amount. A lot of folks will just do, like, let’s say 10% of the total cost of an evaluation for a deposit. And you take that right on the phone when you book the appointment and you of course have to communicate to people that it is non-refundable, but that’s relatively easy.

If you don’t take a deposit, then what do you do? Well, depending on your testing flow, your testing model, or process, a lot of folks will take half of the payment for the evaluation at the intake appointment [00:06:00] and the other half of payment, either on the testing day or the feedback day.

You can structure that in any number of different ways. You can take a quarter of the payment on the intake day. You can take the other quarter on the testing day. You can take the remaining half on the feedback day. You can switch it up a little bit and not collect the final payment until the report is delivered. That’s totally fair as well.

There are a number of different ways to do this. I personally, just for cash flow sake, like to collect as much payment upfront as possible. We do take a lot of insurance in our practice. And again, I’ll talk through those options, but even in private pay, I think it makes sense to take a big chunk during intake because that’s going to account for the intake, planning the battery, and likely some collateral phone [00:07:00] calls, record review, things like that. So you’re going to spend a good amount of time upfront before the person comes in for testing and then a relatively large chunk during or on the testing day as well. So you’ve got the bulk of your payment collected before you do the feedback session.

Now feedback session, as we know, is going to entail feedback and report writing. So that is a good bit of work, but as much as you can collect the payment upfront, I think the better, because the longer the evaluation goes on the higher the likelihood that folks will drop out or have financial fatigue and not feel as compelled to pay or in the worst-case scenario, be unhappy with the evaluation results and think that they don’t have to pay because they don’t appreciate the results or agree with those results.

So you can switch it up. Private pay gives you a lot of flexibility. You can choose to do whatever [00:08:00] you want. Some folks collect the entire payment upfront and clients are okay with that. I think it’s all in the way that you communicate it and the expectations that you set. And then, of course, you have to deliver on those expectations.

If you take insurance, the picture is a little bit murkier because most of your insurance contracts, all of them, as far as I know, do not allow you to charge for services that weren’t rendered. So this makes it a little tougher to take a deposit. I think you do have some flexibility in being able to take a deposit. You just have to structure it in the right way and make it clear that they are not paying for services at this point. They are, again paying to hold the spot. And even that it’s a little bit murky. Certainly, consult with your insurance panels and perhaps even an [00:09:00] attorney to know if that’s doable.

What you can do is collect payment on the day of service. Plenty of medical practices, plenty of other entities operate this way where clients just have to pay for the services at the time they are rendered. So when they come in for the intake, they pay the copay or deductible amount for the intake. When they come in for testing, they pay for the estimated cost of testing.

Now you, of course, will not have the insurance claim processed and back to you by that time because it’s the day of service, but if you’re doing a good job ahead of time verifying benefits, then you should have a pretty good estimate of what it’s going to cost. So you can charge that first half of the testing payment on the testing day.

When they come back for the feedback session, most of us, I think at this point who take insurance [00:10:00] are billing the time for feedback and the time for report writing on the feedback day. So you can collect that second half on the feedback day and then submit the claim. And then it puts you in the position of maybe having to charge a little more or do a little bit of a refund or in some cases, do a big refund or charge a lot more if the insurance quote was incorrect.

Again, this all goes back to providing and getting an accurate quote in the beginning. So as long as you’re getting an accurate quote for coverage, which happens, I would say 98% of the time for us at this point, then that will help you be accurate as you’re collecting payment.

Now, some folks say, I don’t want to charge for writing the report because that’s going to take me a few weeks and I’m not going to get that to the clients. I don’t want them to pay for it. [00:11:00] That’s totally okay. And that’s the way that we do things here in our practice, at least at this moment. I think we are moving to more of a model of collecting payment on the day of feedback, but at the current time, that increases the risk that people are not going to pay when the insurance claim comes back and you need a method to control for that so that you don’t have cash flow issues.

One way to do that is to alert the client and make sure to put it in your informed consent that you will charge their card when that final insurance claim is processed. As long as you communicate that, and as long as you tell them a good estimate of what it’s going to be, then I think you’re in the clear.

So you can say at the feedback session, hopefully before that as well, that you’re going to submit the final insurance claim. It usually comes back within one to two weeks and you will charge their card for the [00:12:00] remaining balance at that time. As long as you inform people of that, I think it’s okay. I would not do that as a surprise.

The final option is that you can simply submit that final insurance claim from the feedback session or the last appointment, the last amount of report writing you did, wait for it to come back, and then send statements. We found in our practice that this is the least efficient way of collecting money. People do not respond to statements. They ignore them. They choose not to pay. They get upset. So, I think using any of the models that I’ve discussed prior to this is more valuable or more effective in collecting payment so that you’re not chasing money. That’s the last thing that you want to do.

One piece that I didn’t mention early on that I think is crucial is if you decide to take credit cards, I [00:13:00] would seriously consider requiring a credit card to make an appointment, whether it’s private pay or whether you’re going to be billing insurance, because in the vast majority of cases, even with insurance, you will be charging that card.

So, having that card on file from the very beginning is super helpful because again, it’s fine when it goes well, but if it doesn’t go well, you don’t want to be chasing credit cards and chasing payments from people. And that also gives you leverage to charge their card if their bill goes too long. If they just don’t respond for 60 or 90 or 120 days, then you can charge their card.

That’s my final piece of advice. No matter what you do, if you do take credit cards, make sure to require one on file before anyone makes any kind of appointment. Some of the EHRs out there will let you even run a test charge and validate the credit card [00:14:00] to make sure that it is real, which I think is super helpful.

All right y’all. That is it for the beginner practice launch series, an impromptu series that turned into quite a few episodes that were pretty fun to do. If you want to do a deeper dive into any of these things, there are plenty of previous episodes that you could check out. I’ve linked a lot of them in the show notes as the series has continued.

And of course, if you want to dive really deep and get a lot of support as you launch your practice, you could consider joining the beginner practice mastermind which is a group coaching experience where we’ll support you, provide guidance, accountability, homework, and cohesiveness with other professionals as you launch your practice. You can find that at thetestingpsychologist.com/beginner and schedule a pre-group called there.

Okay [00:15:00]y’all, pleasure as always. I look forward to talking to you next time as we move to some other topics. Take care.

The information contained in this podcast and on The Testing Psychologists website is intended for informational and educational purposes only. Nothing in this podcast or on the website is intended to be a substitute for professional, psychological, psychiatric, or medical advice, diagnosis, or treatment.

Please note that no doctor-patient relationship is formed here, and similarly, no supervisory or consultative relationship is formed between the host or guests of this podcast and listeners of this [00:16:00] podcast. If you need the qualified advice of any mental health practitioner or medical provider, please seek one in your area. Similarly, if you need supervision on clinical matters, please find a supervisor with expertise that fits your needs.

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