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Hey everyone, welcome back to a business episode.
You’ve heard that you need to keep a credit card on file and have a no-show policy. Maybe you’ve even considered sending clients to collections, but many of us still struggle with getting paid for our services, including myself. Why is [00:01:00] that?
For many of us, we have personal blocks or beliefs that get in the way, and today I’m talking about some of those beliefs that may keep you from collecting the money that you should collect. I’ll also talk through the practical elements of a payment policy and how we at our practice get to the point of sending folks to collections.
If this resonates with you and it should, I’m guessing many of you are struggling with getting paid, this comes up a lot in discussions in the testing community, then I invite you to stay tuned for the ins and outs of money mindset and payment policy. Let’s get to it.
I’d like to [00:02:00] start this podcast with a little story.
I wonder if this sounds familiar. You have a client who’s scheduled for testing. The morning comes and they don’t show up. You call, they don’t answer. You email, they don’t respond. You figure out that they are not coming. You think about your no-show policy written somewhere in the office policies, or consent forms. You should be reaching out to charge that person’s credit card, assuming that you have a card on file, but you don’t charge the card.
If you’ve been visioning the scenario in real time, pause for a second and just notice any thoughts that come up around charging that no-show fee. I’m guessing that you’re having thoughts, something like maybe they’ll reschedule.[00:03:00] That’s too much money to charge them. Did I actually inform them of the policy? They’ll be mad if I charge this card. It’s okay. I can fill the time with something else. It doesn’t matter. I bet there’s a good reason that they’re not here. I don’t know. These are just some of the thoughts that I’m guessing might be running through your head.
Let’s hold onto that. I want to run through another scenario that might happen.
You’ve completed your evaluation and you’ve sent the report to this family or individual. Insurance has been processed or not if you’re private pay. You’ve sent the client multiple requests to pay their bill over the last few weeks, but they are unresponsive. So what do you do? You again, maybe think about a policy that’s written somewhere [00:04:00] meant to address unpaid bills, but you probably don’t do what it says. And my question is why?
I am guessing that it’s some of the same questions as above. Maybe added on that you’re afraid they’re going to leave a bad Google Review. Maybe it’s too much trouble to chase the balance. Maybe you don’t know how to send someone to collections and you’re scared to do it in the first place. Maybe you think to yourself, well, that’s just not kind to charge them if they haven’t volunteered to pay themselves.
I’m curious if any of those things resonate with you, and I’m curious where your head is at right now.
If you resonate with either of those scenarios, you are absolutely not alone. This is one of the biggest problems that comes [00:05:00] up during my consulting groups and one-on-one sessions. So most of the time, in my experience, both personal and professional consulting, not honoring our financial policies is due to one or two things.
There’s logistical overwhelm and bad policies, or incomplete or ill-defined policies like not having a card on file, or not having a clearly documented policy, or not having a collections agency at the ready if you needed them, but the other factor is often our own personal blocks. Many of us have these policies, but we don’t honor them.
I feel like I hear that time and again in these situations, someone says, “Oh, I got no-showed for a testing appointment the other day” or “Oh my gosh, this person just won’t pay their bill.” And then they say something like, “I know that I should [00:06:00] follow my policy but I don’t usually do that.”
I wonder about the personal blocks that get in the way of doing this. And this is just a list that I’ve seen and heard about and put together as far as potential personal blocks that might get in the way when you think about charging for no-shows or for unpaid bills.
One is that we don’t value our time and our work. Another is that we’re afraid of making people mad. We’re afraid of bad Google reviews. We feel bad for wanting or needing that money, which is related to perhaps growing up in a family that shamed us for money-related stuff, whatever that looks like. Maybe it wasn’t even a shame situation. Maybe it was just [00:07:00] ignoring money or not talking about money, which is my situation like I’ve mentioned on the podcast before.
So there are any number of personal blocks and maybe for you it’s it seems anti-value to charge folks in these situations. It could be any number of things, but the idea is that it’s often a combination of logistics and practicalities and these personal blocks that get in our way when we think about charging for our time.
So what do you do about it? Well, I don’t have any illusions that we’re going to solve this problem here today in this 15 to 20-minute podcast, but we’ll talk about a few strategies that might help.
I’m a firm believer in the Mood Follows Action Credo. So I would love for you to take some action.
Let’s just talk about the basics of a good payment policy.[00:08:00] And this is important because if you have a good solid payment policy, it alleviates a lot of the previously mentioned responsibility or guilt that might come from feeling like you didn’t communicate the policy as well as you could have, or the client wasn’t aware of it or wasn’t informed of it.
So when there’s good communication of your payment policy, it takes a lot of the responsibility off of you for “bad person” and helps you feel more confident that this is the client’s responsibility; they were informed and now they are choosing in spite of that information to do something different than what they consented to.
All right, so point number 1, this is basic. If you’re not doing this, I want you to write me an email, jeremy@thetestingpsychologist.com and give me a really good, compelling reason why you’re not doing this. And this item is to keep a credit [00:09:00] card on file for every client.
For years now, we do not book any appointments in our practice without a credit card on file- a valid credit card. Our EHR system has the capability to verify a card at the time of booking to make sure it’s not a fake card. I would highly recommend that. So we don’t book any appointments without a credit card on file.
I wrestled with this for a while. Like, okay, there are some families or individuals who can’t get credit, who don’t have a card that they can give us. And eventually, I came to terms with the idea that there are plenty of other places in our community where families can go or individuals can go if they don’t want to provide a credit card. That is not a responsibility I’m willing to take on because I have an obligation to collect payment for services and pay my clinicians and keep our practice running. So keep a credit card on file.
[00:10:00] The second component is defining your policy really well in your paperwork and go over it as many times as possible. Just off the top of my head, we go over our payment policy and schedule on the initial phone call when the person schedules the appointment in the initial email confirming their first appointment. We talk about it in the email right before the first appointment that has their paperwork and such, and we talk about it at the intake. Then on the backside, we mention it during the feedback session, any remaining parts of the payment policy. I think over-communicating the payment policy is a great approach.Another component of having a solid policy is knowing your revenue cycle management. That’s just a fancy term for when do [00:11:00] you send statements and charge people. The kicker for me is how long you wait and what happens when people don’t pay. For us, it’s 60 days. For a long time, it was 90 days, but honestly, if someone hasn’t paid their bill within 60 days, it is very unlikely they’re going to pay in the next 30, so we just dropped it down to 60 days of non-payment is when we automatically charge their card on file for any remaining balance and or send them two collections if that card declines.
Let’s take a break to hear from our featured partner.
The neuropsychological assessment battery or NAB is a comprehensive instrument offering the combined strengths of a flexible and fixed neuropsychological battery. It lets you administer the full battery, any of its six modules, or individual tests. And now the NAB modules are available for scoring on PARiConnect [00:12:00] PAR’s Online assessment platform. Learn more at parinc.com/nab.
All right, let’s get back to the podcast.
So by that point, they’ve had all the prior communication I just mentioned plus multiple statements, plus an email, text, and a phone call clearly stating that we will charge their card and then send them to collections if the card doesn’t go through.
Again, I wrestled with this for a long time because I felt like the burden of proof was on us to make sure that folks know that they were going to be charged. I felt bad charging their card two months after the last appointment without a response, but by doing all of these actions, sending all these statements, doing all this outreach, it really helps me sleep at night and know, hey, we have done [00:13:00] probably more than we’re supposed to do to inform people of this policy and helps to feel more rooted in that process and feel more confident to charge their card at that two-month interval.
Now, the last component is sending to collections. People are really scared to send folks to collections, and I’m here to tell you, it is not that scary. When we first set it up, this was, I don’t even know, seven years ago maybe. It felt like a lot. It felt like a nuclear option. At this point, we have sent probably about 100 people to collections over those seven years.
I can say that yes, sometimes people complain. People will say that they didn’t get any notice. I know that’s untrue. But if you have a solid policy like I defined above, you have much firmer ground to stand on, [00:14:00] and part of this is making peace with the potential of a bad Google Review.
That’s a separate episode, but I will say this, over time, Google reviews Honestly bounce off a lot easier than they used to. We honestly have more negative reviews than positive reviews. They’re all related to billing and I would say 80% of them are completely incorrect or misperception on the client’s part, but that’s how it goes. And our referrals are as strong as ever. I hope that you can put that out of your mind as a major concern.
All right. Let’s say you’ve got your policy in place. Let’s talk a little bit of mindset stuff. Again, we are not going to solve your money mindset issues in a 15-minute podcast, but here are some tricks, some cognitive [00:15:00] manipulations that you might engage in to get you thinking a little differently about collections.
The first one is, you can try to turn this around and make it about your other clients. So why are you prioritizing one person’s well-being or priorities over the rest of your clients? In other words, whenever this one person doesn’t pay, that’s just another chip off the foundation of your business, which is profit. And if you’re not profitable, you can’t do anything for anyone. So why are you letting one person erode the foundation of your business?
So if you’re hesitant to charge one person or send one person to collections, turn it around and think you’re actually doing the rest of your clients a favor. And if you have employees, you can add them in too. You’re doing this for the sustainability of your employees because if you don’t get paid, your practice [00:16:00] does not continue.
The second way that you might think of it is to make it a DEI issue or a Diversity, Equity, and Inclusion issue. If you allow one person to not pay or skate through or evade your financial policy, how is that fair to all of the other individuals who do pay? I would argue that it’s not fair at all, so you need to take a really hard look at why or what it is about that particular person compared to all the other individuals that lets you allow them to get around your financial policy.
A third way to look at it is to turn it around and make it about your family. If you allow folks to not pay, you are literally taking money from your kids, your partner, your parents who might need it, yourself, or any of the other folks who depend on you. I mentioned [00:17:00] employees above. It’s all part of the same ball of yarn, so to speak, where allowing folks to not pay is taking money from the individuals who matter to you.
And then the last one is doing the work to value yourself, which I would argue is the most important component. By allowing people to not pay, you are saying this person’s priorities and well-being are more important than my own, and I would invite you to really drive this home a little bit.
Imagine announcing this to the world just to ramp up the urgency a little bit. What if you went home and told your kids or your partner or your parents, whomever it might be, or your best friend, “Hey, today I decided that I’m not valuable enough to charge for the time that I work. I am totally willing to work for free just because someone doesn’t want to pay.” I mean, what is that? What would that be [00:18:00] like? Probably not great.
I know that I am being dramatic here and hyperbolic, but the point being, I think it’s really easy to let these cases slide depending on the situation or the circumstances, but when you ramp it up and really dramatize it a bit, people not paying is a serious problem in your practice and it’s absolutely worth doing any personal work on to help with that.
I know this isn’t easy. As I mentioned, I still struggle with this. We still struggle with this as a practice. And I’ll give you an example. This is a very recent example.
In the near distant past, we sent a statement to a client. We happen to see a lot of Medicaid folks who have very low copays, and so this statement was for literally $1. $1 statement. We send these out all the [00:19:00] time. Sometimes it’s $3, sometimes it’s $4, but sometimes it’s $1. The client wrote back very nonchalantly, and said, “That’s $1, I’m not paying that.”
Now, there was a quality of this email that really got to me there. It felt like a very Gen Z email, almost like it was a text. There was no punctuation. It felt disrespectful and dismissive, any number of things, just to put a voice to that, but we can remove the emotion from it. I’m still not sure what to do about this case.
Do we send this person to collections for $1? Well, that sounds ridiculous, but the flip side is, okay, what’s the threshold then? This is a slippery slope. What is the threshold for sending someone to collections? If it’s not $1, is it $5? If it’s not $5, is it $20? If it’s not $20, is it $100? Like what is the threshold for sending [00:20:00] someone to collections? I am all about consistency in our policies, but just being honest, this one has me a little perplexed.
So the last takeaway, I suppose, is that nobody’s perfect. As much as we try to work on this, and I’ve tried to work on this, there are still examples that come up that throw things off a bit. The key is to recognize the blocks that do keep coming up for you and keep working taking small steps to shore up your policies and your practices. You got this. You can do this.
All right, y’all. Thank you so much for tuning into this episode. Always grateful to have you here. I hope that you take away some information that you can implement in your practice and in your life. Any resources that we mentioned during the episode will be listed in the show notes, so make sure to check those out.
If you like what you hear on the podcast, I would be so grateful if you left a review on iTunes or Spotify or [00:21:00] wherever you listen to your podcast.
And if you’re a practice owner or aspiring practice owner, I’d invite you to check out The Testing Psychologist mastermind groups. I have mastermind groups at every stage of practice development; beginner, intermediate, and advanced.
We have homework, we have accountability, we have support, and we have resources. These groups are amazing. We do a lot of work and a lot of connecting. If that sounds interesting to you, you can check out the details at thetestingpsychologist.com/consulting. You can sign up for a pre-group phone call and we will chat and figure out if a group could be a good fit for you.
Thanks so much.
The [00:22:00] information contained in this podcast and on The Testing Psychologist 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 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.