By Barbara Griswold, LMFT (December 1, 2025)
Today’s article follows my last article on the topic of money (if you missed that article, which covered fee setting, charging for missed sessions, fees with self-pay and insurance clients, and fees for referrals, you can find it here).
Both articles were inspired by attorney Richard Leslie’s post in the November 2025 CPH Insurance Avoiding Liability Bulletin, but I’ve added additional topics and my own thoughts, comments and resources.
Today’s article answers your most frequently-asked questions about collecting from clients who aren’t paying you – either because they are refusing to do so or aren’t able to.
1.“I notice my client is building up a big balance. What can I do?”
If your client has a large balance it may be a sign that you have not been vigilant with your accounting or collections, haven’t followed up regularly on unpaid insurance claims, or you are being too lenient with clients when it comes to getting paid at each session.
So as much as possible, prevent balances before they happen by collecting the client’s full amount at or before each session. End-of-the-month client billing (or waiting to bill the client until you’ve been paid by the health plan) can mean more work for you. It can also lead to loss of income if a client drops out of treatment, is unable to pay, or gets angry at you and doesn’t want to pay for treatment or a missed session.
Don’t let unpaid fees mount with clients – or insurance plans. If it is an insurance plan that owes, make every effort to collect or to appeal any denials in a timely fashion.
Remember, that with each day that passes, it becomes less likely that you will get paid for any unpaid balance. You are also creating the idea in the client’s mind that they can get services without paying – which may make it harder to insist on payment at a later date.
And Leslie points out you may be creating an unethical dual relationship: “If unpaid fees are allowed to mount, the patient may wind up owing so much money that a court or a licensing board might take the position that the practitioner improperly allowed the debt to mount and that a debtor-creditor relationship was thereby established at the same time as the therapist-patient relationship.”
If fees are mounting, it is time to take action to collect. I recommend you have a clear policy of how you will deal with unpaid balances, including how often and in what manner you will reach out to the client, using as many communication options as possible (ex. email, voicemail, snailmail, text, etc.). At the very least, this may mean reviewing every client’s chart more regularly to spot unpaid balances, and/or to make changes in some of your accounting and payment policies.
2. “Can I refer a client to collections?”
In Leslie’s opinion, “it is generally unwise for practitioners to refer matters to a collection agency or business, but circumstances could arise (hopefully rare) where that becomes a possibility.” If you do, he writes, “it would be important for the practitioner to have documentation showing, at a minimum, that several requests for payment had first been made and that the patient was informed of the potential for the matter to be turned over to collections if the debt remained unpaid.” In fact, some professional ethics codes require these steps, and may require that collections policies be included in informed consent documents (APA 6.04e, AAMFT 8.3, ACA A.10.d).
Leslie also advises that “one might want to select a firm that regularly provides services to health care practitioners or health facilities rather than auto dealerships! A former patient can easily claim that he or she was harassed by the collection agency and that the practitioner was negligent in selecting the agency.” Says Leslie, “moreover, the claim may be made that harassment by the collection agency allegedly caused emotional harm, and that the possibility of using a collection agency was not disclosed at the commencement of treatment.”
Having said all this, be sure to check your state laws. An alert reader recently made me aware that in Minnesota (and possibly in other states) you are not allowed to refer healthcare clients to collections even when they owe a balance.
3. “Is it worth pursuing clients to get them to pay?”
Leslie feels it is sometimes best not to chase clients too hard for money. “Even if a practitioner obtains a monetary judgment against a patient in court, enforcement of the judgment (getting the money) may be difficult and time consuming,” he says. “Fee disputes sometimes get ugly or nasty, and may result in false or exaggerated claims of wrongdoing against the practitioner.”
I would second what Leslie advises, especially since an angry client that you pursue for payments can do a great deal of damage to your reputation by jumping on an online platform and making nasty accusations public. If your emails, letters, and phone calls have failed, it may be best to let the balance go.
4. “Can I end treatment if the client — or health plan — doesn’t pay?”
Usually yes, if done carefully. With insurance clients, if the health plan isn’t paying, under certain circumstances the client may self-pay for those services, or you may end treatment rather than build up a big balance — you are not obliged to go unpaid for services.
Your intake paperwork should inform self-pay and insurance clients that they have the right to end treatment at any time – AND it also should inform clients that YOU may end treatment for specific reasons. These reasons may include when you are not being paid for services, when the client is not following the treatment plan, or when the treatment in your clinical opinion does not appear to be working.
You must end treatment ethically and with proper procedure to avoid abandoning a client, particularly if they are in crisis or have little support. It is wise to get consultation, then communicate the decision clearly to the client, discuss the reasons, and provide referrals for continued care. Document all your actions and the client’s reactions. At least one final session may be recommended to support the client and give referrals. I recommend that you follow up with a certified letter with those referrals if not given in-person.
Again, having said all this, be sure to check your state laws. Minnesota’s law states you CANNOT end “medically necessary treatment” even if a client doesn’t pay! So do your due diligence, and research your state restrictions.
5. “Can I withhold records if the client doesn’t pay?”
Usually not. It may be considered unethical to withhold records from a client due to non-payment of fees (see APA 6.03, AAMFT 8.6).
For more about endings with clients read my article here.
Barbara Griswold, LMFT is a private practice coach and the author of Navigating the Insurance Maze:The Therapist’s Complete Guide to Working With Insurance — And Whether You Should, 10th edition. Check out Barbara’s online catalog of helpful online courses, practice forms, and other therapist resources related to insurance, documentation, and running your therapy business here, and subscribe to her free e-newsletter here.