How to Create a No-Cancellation Policy That Keeps Clients Happy
How to Create a No-Cancellation Policy That Keeps Clients Happy
A no-cancellation policy? WHAT?! If you’ve ever considered implementing one, you’re in good company. I remember the priceless expressions on fellow therapists' faces when I mentioned my no-cancellation policy for the first time. Confusion, shock, and then a spark of curiosity—I’ve seen it all.
In this article, I’ll take you through the process of creating my no-cancellation policy. It all started with a financial review after my first year of full-time private practice. I tallied up everything impacting my income—fees, appointments, cancellations, missed payments—and was shocked at the amount lost due to cancellations alone. We fret about the costs of overhead and tax rates, but why aren’t we talking about cancellations?
It is crucial for business owners to regularly deep-dive into their finances to understand the factors influencing their income and address any issues effectively. The high number of cancellations in my practice prompted the need for immediate action. The simple formula below can showcase how cancellations directly affect your bottom line and emphasize the importance of proactively managing and reducing them.
How Much Income are You Actually Losing? (You might be surprised.)
Here is a simple way to calculate your income lost to canceled sessions:
Start by counting how many cancellations you had last year that were not rescheduled and you did not charge for. Divide that number by the number of weeks you worked last year. This number is your average number of cancelations per week. Multiply your service rate (the rate you charge for a session) by the average number of cancellations per week. The result is the amount of income you could have made but didn’t make each week. Multiply that by the number of weeks you work in a year. Did the number surprise you?
[Your rate] x [Average # of cancellations per week] x [# of weeks you work in a year] = $ lost income
If that got confusing, I’ll break it down with an example: Suppose you charge $190 per session, have an 18-session/week caseload, and take three weeks off per year. With zero cancellations (and assuming no other major issues affecting income), this therapist could make as much as $164k per year.
One cancellation per week: $8960 lost income per year (>5% of total income)
Two cancellations per week: $18,080 lost income per year (>10% of total income)
Three cancellations per week: $27,200 lost income per year (>15% of total income)
Therapists with a standard 24 or 48-hour cancelation policy report to me that they have 2-4 cancelations per week. This, of course, depends on several factors, such as how many clients they have, the type of clientele they serve, and how they communicate and support clients’ commitment. Regardless, the average therapist with a standard policy will lose upwards of 15% of their income. For the therapist in the example above, three cancellations per week equals $27k down the drain. Shocking, right?
Why a standard cancellation policy didn’t work for me
A standard 24- or 48-hour cancellation policy in therapy practices requires clients to give at least a day or two notice if they need to cancel or reschedule an appointment, with a fee being charged for late cancellations within the specified timeframe. Even with clients following the policy perfectly, here’s why this didn’t work for me:
Fee Waiving Dilemma: Determining what qualified as an emergency was subjective and felt terrible. What one client thought was an emergency, another client wouldn’t fathom missing therapy for. I would often waive a fee just to avoid looking like an asshole.
Inconsistent Schedules: Filling vacant appointments was impossible with a full caseload, so income was always lost from those cancellations. I concluded that there were three possible solutions to this problem:
Encourage clients to improve their attendance.
Over-book myself and hope that some clients would cancel.
Increase my fees to account for the income lost from canceled sessions.
I hesitated to try a stricter policy because my clients (women with chronic illnesses) needed more flexibility, not less. As someone with a chronic illness, I know what it’s like to try to plan your life (you can’t). My clients needed the freedom to cancel an appointment at the last minute without the stress of paying a fee or having to get better quickly. How could I accomplish this and reduce the number of unpaid cancellations?
The option that felt most ethical and beneficial was to support clients in valuing their personal growth and prioritizing therapy sessions, ultimately improving their attendance and commitment to the therapeutic process. I sought out consultation (and encouragement, if we're honest) from a few therapists who were doing out-of-the-box things with their policies. I returned to my values repeatedly: to put my health and the health of my clients first. Here’s what I came up with:
The No-Cancellation Policy, or as I like to call it, a “Generous Rescheduling Policy”
Here’s how it works:
Clients reschedule missed appointments during the week before, week of, or week after the absence, allowing a generous three-week window.
They get two waived sessions per year (the “freebies”). They can use them in any way they please.
For any subsequent missed appointments not rescheduled, clients are charged the full session fee.
Video counseling options provide flexibility, and an online scheduler simplifies appointment changes.
Why It Works for Me
Client Flexibility: A generous rescheduling window and video counseling ease scheduling stress.
Commitment Indicator: The policy screens out clients not ready to commit, and fosters consistent engagement.
Stable Income: Consistent fees and minimal lost income keep your financials steady. Virtually no fees are lost other than the two absences per year that I waive. I don't always know when a client will end therapy or when I'll start with a new client. However, these transitions occur sporadically throughout the year, minimally affecting my income.
Less Back-and-Forth: Clients now have a fast, streamlined process for rescheduling appointments. With the elimination of the need for explanations regarding absences, clients can easily use the online scheduler to make changes without the requirement of contacting me. This shift has been well-received by clients, as they no longer feel obligated to disclose reasons for their absences. By taking the initiative to reschedule, clients demonstrate their commitment, which is the aspect that I find most important.
How the Policy is Written
I have the policy summarized in my Practice Policies document and a more detailed description in my Financial Agreement. You can place the information wherever you see fit, as your paperwork may be set up differently. Since your intake paperwork is a client’s first introduction to your practice, I believe policies should be written in a professional, friendly, and easy-to-understand manner.
Here is one way to write the policy. Be sure to edit it for your purposes.
Cancellation and Missed Appointment Policy
A commitment to our time together is essential for meeting your counseling goals. To ensure a beneficial experience, I kindly ask that you familiarize yourself with my cancellation policy:
Missed Appointments: Missed appointments should be rescheduled within the week before, during, or after your absence, giving you a generous three-week window to make arrangements. Conveniently, you can use the online scheduler to manage these changes.
Waived Session Fees: I appreciate that life can be unpredictable. That's why I offer the flexibility of waiving session fees for up to two missed appointments per year. The count begins with your very first session.
Cancellation Fees: After you have utilized your two waived session fees, any subsequent missed appointments not rescheduled within the three-week window will result in a cancellation fee equal to your session rate. This fee will be applied at the end of the three-week window.
Staying Connected: If you cannot attend a scheduled session, I encourage you to stay in touch. You have a couple of options: 1) Contact me before the next scheduled appointment to let me know you intend to maintain your current schedule, or 2) Utilize the online scheduler to reschedule the missed appointment.
My Commitment to You: I value your ongoing commitment to therapy. If I haven't heard from you or seen a rescheduled appointment by the time of your next session, I will check in on your well-being. Rest assured, your appointment time will never be forfeited due to absences unless I have not heard from you.
Complementing the No-Cancellation Policy
After implementing the new policy, I made additional changes to how I approach attendance (aka commitment) with clients. I aimed to avoid trapping them in a restrictive policy that felt controlling and instead focused on fostering a deep investment in their progress. Here are a few of the strategies I employed:
Our work became more goal-oriented, with a structured approach to sessions where clients report on their experiences, things they are practicing, or any questions they have. Rarely do clients show up unprepared, and I no longer bear the sole responsibility of keeping sessions productive—they naturally take charge.
While enforcing the policy consistently, I emphasize that their commitment to therapy is my top priority. If they struggle to find a slot in my schedule, I happily extend the rescheduling time by another week. This mutual understanding benefits us both.
My therapeutic approach focuses on empowering clients to take charge of their lives, changing their inner dynamics to assert themselves in relationships, work, health, and beyond. By treating them as capable adults, starting with a no-cancellation policy like this sets the tone for their growth.
Common Questions
How do you accommodate rescheduled appointments? To create availability in my schedule each week, I had to lower my caseload. To compensate for that, I decided to terminate my insurance contracts. If you are wondering about my process for ending the insurance contract and how I addressed this with the clients, here’s a blog post about “How to Seamlessly Terminate an Insurance Contract.”
Do you have big gaps in your schedule? I set up my availability calendar so that clients cannot schedule themselves in a time slot that would create a big gap in my schedule. I never feel like my time is wasted or trapped by the time I make available to clients.
How do you get payment for unwaived sessions?: Payment for missed sessions exceeding the two waivers is processed using stored credit card info, with client consent.
How do you track waived sessions?: Simple Practice helps track waived sessions, though automation would be a game-changer!
How do you take time off? I just do! My time off doesn’t have anything to do with their time off. (It’s my business, not theirs.)
How and when do you communicate the policy to clients?: The policy is clearly stated in intake paperwork and reviewed during phone consultations.
How did clients transition to the new policy?: Clients seamlessly transitioned, with minor reminders needed for some.
A Special Tip for Therapists
Don’t copy-cat this policy. Instead, dive deep into your needs, values, and income goals when crafting policies. Copying someone else’s policy might not align with your practice's ethos. Take inspiration from my process to design a policy that works for you.
If you’re struggling with lost income due to cancellations (or low-paying insurance contracts), you owe it to yourself to sit down and have a brainstorming session. Play out different scenarios and chat with some trusted colleagues. Perhaps there are a few creative ways you can address the problem AND serve your clients better.
While it was my income hit that prompted the change, know that crafting a no-cancellation policy isn’t just about financials—it’s about creating a practice that values both your time and your clients' commitment to growth. So, start brainstorming, and pave your path to a more efficient and fulfilling therapy practice!
Remember, your policy should reflect YOU—your values, your needs, and your vision for a thriving therapy practice.
