You can also listen to the podcast episode on this topic here…
How To Create Your Cancellation Policy
Oftentimes therapists feel lost or overwhelmed when coming up with policies and procedures for their practice, and they struggle even more when it comes to following or enforcing them.
In this post I’ll introduce you to some common elements that you may want to include in your cancellation policy. Additionally, I’ll help you to design an agreement that you will be able to uphold.
Throughout this post I’ll be using the words “agreement” and “policy” interchangeably. When referencing the topic of late cancellations and no shows, I prefer to use the word agreement, as it reflects something that both me and my clients agree to – not something that is punitive or forced upon them.
Considerations In Creating Your Policy
Timeframe: For late cancellations, how far in advance will you allow clients to cancel before they will incur a fee? Many policies use 24-hour, 48-hour, or 72-hour timeframes.
Fees: If a client late cancels or no shows to their appointment, how much will you charge them? You may decide on your full fee, or a set amount such as $50, $75, or $100. Or you may choose to do a tiered system, such as the first occurrence being $50, the second occurrence being $75, and the third and any subsequent occurrences being full fee. Some therapists may not charge a fee at all, but refer out when clients begin to show a pattern of inconsistent attendance.
Exceptions: Can the late cancellation or no show charge be avoided in any way? Many clinicians allow for exceptions if a client has an unavoidable emergency or has an illness. Other exceptions may be for a sick child or for inclement weather. Oftentimes, if the missed session can be filled or if the client reschedules within the same week they can avoid the fee. Some policies are more strict and do not allow for any exceptions.
Waivers: Will you waive the first late cancellation? Or do you give any freebies? Counselors will sometimes use the first late cancellation or no show as a final reminder to the client that they will be charged if it occurs again. This is often referred to as the “get out of jail free” card.
Alternatives: Will you offer video or phone sessions as an alternative if the client cannot make it to your office? Clients may have to cancel because of inclement weather or having to stay home with a sick child, but can otherwise participate in a session. And if they do not accept the alternative video or phone session, will you charge your fee then?
Other Considerations: Will you cap the number of late cancellations before you refer out? Do you reschedule after a no show for the first appointment, or immediately refer out?
The Impact Of Late Cancellations And No Shows
Late cancellations and no shows have a larger impact on a therapy practice than one may recognize.
The affect on the therapist and their ability to make a steady income can be significant. For the average practice, without a cancellation policy in place, one late cancel or no show a week could mean a $5,000 – $10,000 loss for the year. We still incur our expenses, such as rent, whether or not the client shows up for their session.
As counselors, we know that clients are not getting the maximum benefit of treatment if their attendance at therapy sessions is inconsistent. Cancellations can negatively impact the client and their progress in therapy.
Finally, if the therapist is unable to fill the missed session time it keeps another client from benefitting from the available time. Therefore, having a fair and clear policy in place will benefit both you and your clients.
Informed Consent x2
I write x2 because it is important that your clients are truly informed; therefore, I recommend that they have at least two opportunities to be informed of and agree to your policies.
Be sure that your policy on late cancellations and no shows is clearly written in your informed consent document. It should be easy for your clients to read and understand.
Although we would prefer that our clients read every word in our informed consent document, that doesn’t always happen. This is why it is really important to verbally go over your informed consent document, along with any agreements, during your first session with new clients.
When discussing your cancellation policy with clients you can say that you will hold yourself accountable for your end of the agreement, which means that you would only late cancel on them due to illness or emergency.
If a client is a no show to an appointment, I personally do not automatically charge their card until I know why they missed the appointment (checking for emergency or illness). I also want to have some contact with them so they can acknowledge that they know that their card will be charged and it will not be a surprise to them.
I highly recommend keeping a credit card on file that allows you and your clients to easily uphold the agreement.
You will need to have a system in place that has this feature available. I use Simple Practice* and love it! The software allows you to store and run credit cards, among many other awesome features.
When therapists face a no show or late cancel, they will typically contact the client and remind them about the policy and inform them that they will be charging their card for the agreed upon fee. Having a valid credit card on file for all of your clients can ensure prompt payment of any late cancellation or no show fees.
*If you are interested in Simple Practice for yourself, you can click here to get a free 30-day trial + a $50 statement credit when you sign up (and I’ll get a credit too).
Take Into Account Your Outside Contracts
I’m a private pay therapist so I’m not very familiar with the nuances of insurance and EAP programs as they relate to your ability to charge late cancellation and no show fees.
For example, some contracts that you may have do not allow you to charge any additional fees to your clients. Because of this you may want to decide how many late cancels or no shows that you will allow each client to have before you consider referring them out.
Please be sure to review your contracts to ensure that you will be able to enforce the agreements that you set forth in your informed consent document. If there are conflicts, you will need to adjust your agreement so that you are in line with what the contracted outside parties require of you.
Do Your Own Thing And Don’t Worry About Others
There is no right or wrong way to set up your agreement. Know that everyone will have different views and opinions. You only need to do what works best for you and your business.
When the topic of late cancellation and no show policies comes up in some of the therapist forums, people can have very strong opinions on what they deem too harsh or too lenient, or not having good boundaries or being too strict.
Only you can decide what your business policies are going to be, and you also need to consider what agreements you will feel comfortable upholding.
This point about choosing an agreement that you will be able to uphold is really important. I’ve had many conversations with therapists where they share that their policy states that they will charge full fee for a late cancel, but when it comes time to enforce the policy they can’t bring themselves to follow through.
Maybe the client cancelled at 22 hours and the therapist is struggling with how much they are willing to flex on their 24-hour policy, or they just don’t feel good about charging $150 and not having a session to show for it. These feelings are so common amongst therapists grappling with doubts about their policies.
It’s easy to say “this is my policy” when you are creating your informed consent document, but I want you to take it a step further and imagine what it will be like to follow through with the policies and agreements that you are creating – because there will come a time when you have to enforce them.
And it’s okay if you need to adjust your policies, whether it is changing from a 24-hour to 48-hour time frame, or deciding to charge $50 for a late cancellation instead of your full fee. Whatever agreement you can follow through with is the agreement for you.
I Want You To Be Successful In Business & In Life!
Starting, growing, and maintaining a business is a big deal. It's super-exciting and super-scary all at the same time. I created Mountain Practice Journeys to support you through the difficult and muddy terrain, and to celebrate with you when you have reached each summit of the many mountains you will conquer on your journey.
Happy Climbing, Cindy