As a therapist, you started your business to help clients overcome the challenges they face and become the best versions of themselves. The flip side is that you have a business that depends on client payments to stay around. Let’s look some billing issues you might encounter.
While treating clients might be the best part of the job, you still need to make sure your business is a profitable one. To do that, you need to iron out any billing issues to ensure that clients know exactly how and when they’ll pay for each session and make sure you are paid correctly for your service.
If you’re looking to learn more about billing for therapists, you’ve come to the right place. Keep reading to find out more about how to set up therapist credit card processing, how to avoid the appearance of fraud, and what you can do to prevent chargebacks.
Billing for Therapists: Make Sure You Have the Optimal Setup
When you’re focused on treating patients, the last thing you want to think about is whether they’re going to pay their bills. Unfortunately, when practices encounter billing mishaps, stress increases, revenue decreases, and therapists are forced to spend more time thinking about cash flow and tracking down payments than they’d otherwise prefer.
With that in mind, let’s look at three tips to keep in mind to ensure your billing processes are set up to help you succeed and avoid potential billing issues.
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Explain your credit card billing processes
To avoid wasting too much time on billing, you first want to clearly explain how you’re going to bill clients and have each new client acknowledge that they understand how and when you will bill them and charge their cards. By ensuring your clients have a good idea about how much they’ll pay for each session, you decrease the chances there are any billing surprises. To speed up the process, be sure to issue credit card authorization forms that clients can sign to show they consent to you charging their cards.
You’ll also want to clarify your sliding scale, no-fee policy, and cancellation policy. As a rule, be transparent whenever a client has questions about billing.
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Consider your merchant category code
If your practice takes cards linked to flexible spending accounts (FSA) or health savings accounts (HSA), make sure your practice has the most optimal merchant category code (MCC). For example, if your bank codes your practice as 7277 (Debt, Marriage, Personal-Counseling Services), you should ask your bank to recode you to 8099 (Health Practitioners, Medical Services-Not Elsewhere Classified).
In most cases, a successful recode will require you to have a certain type of license. If you’re part of a group practice, use the most advanced diploma and license in your practice when you request a recode — even if the holder isn’t the principal therapist in your office.
In the event an FSA/HSA card is declined due to MCC coding, remind your clients that they can still submit the payment to their FSA/HSA holding bank for reimbursement. While superbills can be particularly helpful here, regular receipts usually do the trick, too.
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Keep a record of every appointment
Additionally, you should also keep a record of your appointment schedule. Be sure to account for all cancellations — particularly if you charge a fee for them. That way, in the event a client has a billing complaint, you’ll have the data you need to make your case.
Avoid the Appearance of Fraud
Just because you’re trying to run your business as honestly, ethically, and by the book as possible doesn’t mean your activities will never look suspicious.
After all, banks and credit card companies often use algorithms, artificial intelligence, and predictive analytics to detect fraud. So, if your behaviors mimic fraudulent activity even if you’re doing everything correctly, you might run into billing issues that you’ll have to resolve.
Luckily, by understanding what banks look for in fraud detection and avoiding those behaviors, you can increase the chances your account is never flagged. Here are some tips to keep in mind on this front:
- Don’t run payments on the same card more than twice per day. If the card keeps failing and the transaction won’t go through — but you keep trying to bill the card anyway — banks might think you’re trying to use the card fraudulently.
- Don’t bill your clients randomly. Instead, bill them on a regular basis. Whether that’s weekly, biweekly, or monthly is up to you. Try not to wait longer than one month.
- Don’t charge huge lump sums at once. Arrange a payment schedule that ensures you bill clients consistently and not all at once. Even if you secure a deposit for a complex, concentrated type of care, for example, and then bill for the full amount later, it will be more trustworthy to the banks — and less likely to be flagged as fraud.
Prevent Chargebacks
Chargebacks — which occur when credit card holders opt to file a dispute instead of working with your practice to resolve billing disputes — can be prohibitively expensive for practices like yours, both from a dollar and time perspective. Even if you end up “winning” the dispute, you’ll still end up spending more time on it than you’d prefer.
Chargebacks are most likely to happen when you bill a client for a large amount all at once. Typically, chargeback risks increase as bills get bigger. Since banks are more likely to uphold chargebacks on large amounts, you need to ensure you bill your clients on a frequent basis so that bill amounts stay smaller.
Of course, make sure you don’t charge clients for services not rendered! Before batch-running charges, scan the data to make sure that all cancellations are accounted for.
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