In my previous post, I discussed the concept of fee-splitting. In this post, I will discuss what some therapists are saying, as well as the ACA’s response.
As a quick review, ACA defines fee splitting as: “Fee Splitting – the payment or acceptance of fees for client referrals (e.g., percentage of fee paid for rent, referral fees).” The latest version of the ACA Ethics Code (2014) denounces fee splitting as unethical.
I’ve been following the ACA listserv, ACA Connect, and reactions are mixed. Here are some of the more interesting reactions (with my comments in parenthesis directly following):
1. “In other words, I want to make sure I know where the money is going so that I’m assured that I’m not being taken advantage of…After all, how did we get to a place where we were okay with turning over 40-50% of our income to someone who is not providing any services to our clients? ” (It should be up to the practitioner to decide whether or not they want to pay a percentage or flat fee. It’s their business decision).
2. “This sounds very confusing. Either model is simply a business model. Of course you are going to refer to those in your group. You would with either model. I am wondering who decided this is a kick back. I know kick backs are illegal but since when did referring clients to other providers no matter who the are become a “kickback”? Who are you suppose to refer to? Someone you don’t know – someone you don’t agree with- Joe Blow??????????” (He has a point).
In sum, our work as counselors is both very unique and very important. Because of the vulnerable state of our clients, we must be careful not to take advantage of them. However, often this conflicts with commonly accepted business practices. Stay tuned as this issue continues to develop.
Here is the response from Michele E. Wade, ACA Ethics Specialist:
“As a historical backdrop, the act of fee-splitting based on referrals was addressed in the 1995 Code of Ethics: under D.3: Fees for Referral: “Referral Fees. Counselors do not accept a referral fee from other professionals.”
The 2014 Ethics Revision Task Force (ERTF) intended to bring that idea back into the Code of Ethics and to clarify some other aspects of fee-splitting that went beyond just referral. It can be considered an unacceptable business practice to charge a percentage of payment rate per client for the use of office space because it could be seen as a “kickback.” In other words, the individual who is renting out the space may be more inclined to refer clients to the clinician who pays out at a higher percentage rate rather than referring based on case load, competency, and/or rotation. We understand that common practice, and as a way to cut costs as a beginning practitioner, payment rates are based on case load. However, it is ACA’s recommendation to establish a set amount regardless of the clinician’s case load and perhaps renegotiate as more income is achieved. The key element is to insure that there is no ulterior motive for the basis of referrals to the clinician. Referrals should be based on considerations such as the needs of the client, competency, and availability.”
For a copy of the 2014 ACA Code of Ethics, click here.
To learn more about ACA Connect, click here.
Yours in the Joy of Knowledge,
Dr. Barbara LoFrisco
