Why Raising Your Rates Can Bring More Clients

Y’all know I am all about asking for what you need. And when I work with coaching clients who get clear on their numbers and raise their rates, something interesting tends to happen. Their caseload grows. Not always immediately, but consistently enough that I could not keep ignoring it. It made me want to understand the psychology behind it. So I did a deep dive.

Here is what I found.

Before a potential client reads a single word of your bio, your rate has already told them something. When people cannot easily evaluate quality on their own, they use price as a proxy. Therapy is exactly that kind of market. Someone scrolling a directory or landing on your website has almost no way to assess your actual skill. What they can see is your rate. A below-market rate communicates something, and it is usually not what you intend.

Then there is what happens once a client commits financially. When people make a real investment in something, they show up differently. They reschedule instead of canceling. They do the homework. They stay when it gets hard. Researchers at Stanford and MIT actually demonstrated that people who paid more for the exact same product got measurably better results from it. Same thing, different price, different outcome. The expectation that something is worth more changes how people experience it. That has real implications for our work.

And then there is the piece I think gets missed most often. When you raise your rate, you change who finds you. The person who chooses you at a sustainable rate has already decided this is a priority. They are not shopping for the most affordable option. That internal readiness matters enormously for how the work actually goes.

I also want to be honest about what this does not mean. Higher rates exclude people. That is real. But the research on sliding scale fees does not actually show that lower fees produce better engagement or better outcomes, which surprises a lot of therapists when they hear it. Excluding people is a systemic problem that your individual rate cannot fix. You can be intentional about building reduced-rate capacity into your practice without making your standard rate the solution to something much bigger than you.

Charge what you need. Let your rate do the work it is designed to do.

The rate calculator at privatepaypractitioners.com will show you what that number actually is. Free. Five minutes.

Further reading:

Shiv, Carmon & Ariely — Placebo Effects of Marketing Actions: https://ssrn.com/abstract=707541

Waber, Shiv, Carmon & Ariely — Commercial Features of Placebo and Therapeutic Efficacy (JAMA, 2008): https://doi.org/10.1001/jama.299.9.1016

Paying for Psychotherapy: Reframing an Antiquated Perspective — Society for the Advancement of Psychotherapy: https://www.societyforpsychotherapy.org/paying-for-psychotherapy-reframing-an-antiquated-perspective

Clawback or Claw Your Way Out: Why Private Pay Is a Decision You Won't Regret Making

I closed my group practice because of clawbacks. That is the short version.

The longer version is that I built something, staffed it, saw clients, submitted claims, got paid, and then watched insurance companies come back and take that money. Not once. More than once. And by the time I understood the full picture of what I was dealing with, the math on keeping that practice open no longer worked. I had to downsize. I had to make hard decisions. And eventually I made the decision that private pay was not optional for me. It was survival.

I have since talked to hundreds of therapists across the country who have versions of the same story. And what I keep hearing is that most of them did not see it coming either.

So let me be direct about what clawbacks actually are and what they can actually do to a practice.

What Is a Clawback?

A clawback happens when an insurance company demands repayment of money they already paid you for sessions you already completed. Not future sessions. Past ones. Work you did, notes you wrote, clients you helped. Money you already spent paying your rent, your staff, your software, yourself.

The reasons vary. Sometimes it is a billing code dispute. Sometimes it is a documentation issue, a missing signature, an incorrect timestamp. Sometimes the insurance company made the error in the first place and still comes after you for the money. Sometimes a client's coverage changed and you had no way of knowing, and now you owe back every session you were paid for under the wrong plan.

None of that matters in the moment when the letter arrives. The letter just says you owe them money.

How Bad Can It Get?

Bad enough to close a practice.

A provider in Washington state had her firm taken apart by a single insurer over billing code disputes and documentation issues, including clawbacks for small clerical errors like a missing signature or an incorrectly written timestamp. Instead of allowing corrections, the insurer demanded all the money back. She estimates the firm lost approximately $1.5 million. She had to take out loans to pay her staff. She eventually closed. At the end, it was just her.

A community mental health center in Massachusetts received a single clawback demand for over $137,000.

A therapist in Georgia was blindsided by a demand covering six months of sessions with one client, issued a full year after the fact, because the insurer had paid out of the wrong plan. She had no way of knowing which plan was primary. She got the letter anyway.

In 2024, Optum began seeking repayment from clinical social workers across the country who had been paid at 100% of the Medicare physician fee schedule when the correct rate was 75%. That was the insurer's error. Therapists still got the recoupment letters. Solo practitioners reported being on the verge of closing because of the financial burden.

One therapist received a $189,000 repayment demand after an insurer requested two years of notes and deemed the documentation inadequate, without having reviewed a single note first.

These are not edge cases pulled from message boards. These are documented and reported.

There Is No Clock Working in Your Favor

Here is the part that does not get talked about enough.

You have billing deadlines. Usually 60 to 90 days after a session to submit your claim. Miss that window and the claim is denied, full stop.

Insurance companies do not have the same deadline to come after you.

States have different laws governing how far back an insurer can pursue recoupment from a provider, ranging anywhere from six months to a couple of years. But some states have no laws limiting clawbacks at all. And when it comes to Medicare, the lookback period for errors and recoupment can extend as far as six years, and state law would not apply, meaning your state insurance commissioner would not have the power to help you.

You are held to a strict timeline. They are not.

That asymmetry is not an accident. It is a structural feature of the system.

This Is Not a Billing Problem

I want to be careful here because I know some people will read this and think the answer is better documentation or better billing practices. And yes, clean notes matter and accurate coding matters. But the therapists I mentioned above were not sloppy. They were practicing in good faith inside a system designed without meaningful protections for providers.

One Georgia therapist described it this way: imagine it is payday and you are expecting your check to look a certain amount, and then your boss comes in and says you are not getting paid this week because they are unhappy with the job you did two years ago. And when she called the insurer to sort it out, she was sent in circles for hours of unpaid time trying to get answers from people who had no authority to give them.

This is a structural problem. And private pay is one of the only real protections against it.

When your income is not routed through a third-party payer, there is no mechanism for retroactive recoupment. The session happened. You were paid. It is done. You can build a budget around that. You can plan. You can breathe.

That is not a luxury. That is what a sustainable practice requires.

Where Do You Go From Here?

If you are still on insurance panels, I am not telling you to quit tomorrow. I know the financial reality of making that transition is real and it takes time. I have spent years helping therapists navigate exactly that process.

But I am saying this. Every therapist on an insurance panel right now is carrying financial risk they may not fully see. And the moment a clawback letter arrives is not the moment to start thinking about your exit strategy. That moment is now.

Private pay is not a dream. It is a decision. And for a lot of us, it is the only decision that makes a practice actually survivable.

References

NPR / ProPublica — Washington state practice closure, Anna DiNoto
https://www.npr.org/transcripts/nx-s1-5028551

Commonwealth Beacon — Massachusetts $137,000 clawback demand
https://commonwealthbeacon.org/health-care/clawbacks-threaten-mental-health-services/

Georgia Public Broadcasting — Georgia therapist Tracy Hooper, March 2025
https://www.gpb.org/news/2025/03/04/so-called-insurance-clawbacks-are-driving-georgia-mental-health-therapists-private

ClearHealthCosts — 2024 Optum Medicare clawback wave
https://clearhealthcosts.com/blog/2024/04/medicare-clawbacks-strike-therapists-nationwide/

Navigating the Insurance Maze — $189,000 demand, Medicare six-year lookback
https://theinsurancemaze.com/clawbacks/

DJ Burr, LMHC, LPC, Founder, Private Pay Practitioners
www.privatepaypractitioners.com

When to Raise Your Rates (And How to Tell Clients)

You need to raise your rates. You’ve probably known this for a while.

Maybe you calculated your sustainable rate and realized you’re charging $30 less than you need to. Maybe your expenses went up, and your income didn’t. Maybe you’ve gained experience and training, yet you’re still charging what you did when you were a new therapist.

Whatever the reason, you’re here. Let’s talk about how to actually do it.

When to raise your rates.

There’s no perfect time. But here are signs it’s overdue: You calculated your sustainable rate, and it’s higher than your current rate. You haven’t raised rates in over a year. You resent your work or your clients (often a sign you’re undercharging). You’re fully booked with a waitlist. Your expenses have increased. You’ve completed significant additional training.

If any of these apply, it’s time.

How much to raise.

If you’re significantly undercharging, consider a larger increase for new clients and a smaller, gradual increase for existing clients.

If you’re doing an annual adjustment, 3-5% is reasonable and expected.

There’s no rule that says you have to raise everyone’s rate at the same time or by the same amount. New clients pay your new rate. Existing clients can transition over time.

Telling existing clients.

Give advance notice. 4-8 weeks is standard. This is a courtesy and also good clinical practice - it gives time to process if money is a loaded topic for them.

Be direct. Don’t over-explain or apologize. You’re running a business and rates increase.

Here’s a simple script:

“I wanted to let you know that my rate will be increasing to $[amount] starting [date]. I’m giving you [X weeks] notice so you have time to plan. If you have any questions or concerns, we can absolutely talk about it.”

Then stop. Let them respond.

What if they can’t afford it?

Some clients will say the new rate doesn’t work for them. That’s okay. You have options:

Honor the relationship: “I understand. I can keep you at the current rate for [X more months] to give you time to transition.”

Reduce frequency: “Would it work to meet every other week instead of weekly?”

Refer out: “I want to make sure you get the support you need. Would it be helpful if I gave you some referrals to therapists with lower rates?”

What you don’t have to do: keep everyone at your old rate forever because you feel guilty.

The mindset piece.

Raising your rate will bring up stuff. Guilt. Fear of rejection. Worry about what clients will think.

Notice it. Feel it. Do it anyway.

Your rate isn’t about being greedy. It’s about sustainability. You can’t help anyone if you burn out because you’re not making enough to live.

Therapists who charge sustainable rates stay in the field longer. That’s good for everyone.

The rate calculator shows you exactly what you need to charge. Try it free: https://privatepaypractitioners.com/rate-calc

How to Calculate Your Private Pay Rate (And Actually Charge It)

“What should I charge?” is the wrong question.

The right question is: “What do I need to charge to sustain my life and my practice?”

Most therapists pick a rate by looking around at what other therapists charge, picking something in the middle, and hoping it’s enough. That’s not a strategy. That’s a guess.

Your rate isn’t about your worth.

Let’s get this out of the way: I don’t believe in “charge what you’re worth.” You’re a human being - your worth isn’t quantifiable. And frankly, that framing keeps therapists stuck, because they tie their self-esteem to a dollar amount.

Your rate is about math. What does it cost to run your life and your business? That’s your starting point.

The actual calculation.

Here’s the simplified version:

1. Add up your monthly personal expenses (rent/mortgage, food, utilities, insurance, debt payments, everything)

2. Add up your monthly business expenses (EHR, liability insurance, subscriptions, continuing education, etc.)

3. Add those together

4. Multiply by 1.3 to account for taxes and self-employment costs

5. Divide by the number of sessions you want to see per month

That’s your minimum sustainable rate.

Notice I said “sessions you want to see” - not “sessions you could theoretically cram into your schedule.” If you want to see 20 clients a week and take actual vacations, calculate based on that.

Why therapists resist this.

When I walk therapists through this calculation, they often land on a number higher than what they’re currently charging. And then the panic sets in.

“No one will pay that.” “I’ll lose all my clients.” “That’s more than other therapists in my area charge.”

Here’s what I know: there are therapists in your area charging more than you, seeing full caseloads. The difference isn’t their credentials or their experience. It’s their confidence and their clarity.

The real barrier is internal.

Most pricing problems aren’t business problems - they’re money story problems. The messages you absorbed growing up about money, worth, and who gets to have nice things. The implicit lessons from grad school that therapists should sacrifice. The guilt about charging for help.

This is why I spend the first two weeks of my intensive coaching program on money mindset before we ever touch strategy. You can know what to charge and still not be able to do it if your internal wiring is fighting you.

What to do with your number.

Once you’ve calculated your sustainable rate:

1. Say it out loud. Ten times. Notice what comes up.

2. Practice stating it without apologizing, explaining, or immediately offering a discount.

3. If there’s a gap between your current rate and your sustainable rate, make a plan to close it.

Maybe that means raising your rate for new clients immediately. Maybe it means a gradual increase for existing clients. Maybe it means having some hard conversations. But you can’t build a sustainable practice on an unsustainable rate.

Ready to run your numbers? Use the Private Pay Rate Calculator - it factors in taxes, time off, and the expenses most therapists forget.

Advertising, Marketing, and Networking: They’re Not the Same Thing

Therapists use these words interchangeably all the time. “I need to do more marketing,” when they mean advertising. “My advertising isn’t working,” when the problem is actually their messaging. “I hate marketing,” when what they really hate is self-promotion.

Let’s untangle this.

Marketing is the umbrella.

Marketing is everything about how you position yourself and communicate your value. It’s your messaging, your brand, who you’re trying to reach, and how you talk about what you do. Marketing answers the questions: Who do I help? What problem do I solve? Why should someone choose me?

Your website copy is marketing. Your Psychology Today profile is marketing. The way you describe your practice at a networking event is marketing. The Instagram post you wrote about burnout is marketing.

Marketing isn’t something you do - it’s the foundation everything else sits on.

Advertising is paid visibility.

Advertising is when you pay to put your message in front of people. Psychology Today is advertising (yes, that monthly fee is an ad). Google Ads, Facebook Ads, Instagram promotions, sponsored posts - all advertising.

Here’s where therapists get tripped up: they invest in advertising before their marketing is solid. You can pay for all the visibility in the world, but if your messaging doesn’t resonate, you’re just paying to be ignored.

I’ve seen therapists spend hundreds on Google Ads driving traffic to a website that says, “I provide a warm, supportive environment using evidence-based approaches.” That’s not a message. That’s wallpaper.

Networking is relationship-based visibility.

Networking is building connections with people who can refer to you or collaborate with you. Coffee meetings with other therapists, connecting with physicians, building relationships with school counselors, and joining professional communities.

Networking is slow. It doesn’t scale. And it’s often the most effective thing you can do.

Why? Because a referral from a trusted source carries weight that no ad can match. When a psychiatrist tells their patient “I know a therapist who specializes in exactly what you’re dealing with,” that person is practically sold before they ever visit your website.

So what does this mean for your practice?

First, get your marketing right. Clarify who you help and what transformation you provide. Make sure your website and profiles actually speak to your ideal client’s experience - not just your credentials and modalities.

Second, don’t over-rely on any single advertising channel. I’ve watched therapists build entire practices on Psychology Today referrals, then panic when the algorithm changes or their area gets saturated. Diversify. Maybe it’s Psychology Today, a Google Business Profile, and one other directory. Don’t put all your eggs in one basket.

Third, network consistently. Not frantically when your caseload drops - consistently. Two coffee meetings a month. Staying connected with colleagues. Building real relationships, not just collecting business cards.

Here’s the thing: advertising costs money. Networking costs time. But bad marketing costs you both - because you’ll spend money on ads that don’t convert and time on networking conversations that don’t lead anywhere, all because your message isn’t landing.

Before you ask, “Where should I advertise?” ask, “Is my message clear?” Before you ask, “How do I get more referrals?” ask, “Do people actually understand who I help?”

Marketing first. Then decide how you want to get visible - through paid advertising, relationship-building, or ideally both.

Not sure what to charge? Start with the Private Pay Rate Calculator to get your numbers clear.