When a Client Doesn’t Pay: Should You Still Pay Your Contractor?
A few weeks ago, a group practice owner reached out to me with a scenario that might sound familiar.
A contractor in her practice had completed a session with a client. After the session, the client’s insurance claim was denied. When they attempted to charge the credit card on file, it bounced. Multiple follow-ups went unanswered, and the client ended up cancelling their next session. The session remained unpaid.
The question this owner asked was: Do I still pay the therapist for that session, even though the clinic didn’t get paid?
She shared that her contractor agreement clearly states that clinicians are only paid for completed and paid sessions. But she also expressed that it felt hard to sit with—the idea that a therapist could put in emotional labour and time and still walk away unpaid.
And it’s a valid tension to feel. Many of us in the helping professions are deeply empathetic, and when we move into business ownership, that empathy doesn’t just disappear. But here’s the hard truth: your business cannot thrive on good intentions alone.
You Are a Business Owner First
As a group practice owner, you are not just a clinician anymore. You are a business owner. That means the way you operate must be sustainable, boundaried, and legally sound.
You write contracts not only to protect your practice, but to clarify expectations and uphold your role as a business leader. And if your contractor agreement states that clinicians are only paid for sessions the clinic gets paid for—then that’s the agreement. Full stop.
If you decide to pay a clinician for an unpaid session just because it feels bad not to, you are:
Undermining your own contract, and
Blurring the lines between contractor and employee.
The Canada Revenue Agency (CRA) takes this seriously. Paying your contractors for unpaid time starts to look a lot like you're treating them as employees—which could result in serious legal and financial implications for your business.
The Emotional Labour of Being the Boss
Here’s where I see group practice owners burning out the most: they continue to absorb the emotional labour of situations that aren’t theirs to hold.
It’s tough when someone you’ve contracted—someone who trusts you and shows up for your clients—ends up unpaid. But that doesn’t mean you should take the hit.
The emotional labour of private practice isn’t exclusive to practice owners. Contractors also take on risk. That’s part of what makes them contractors.
When they sign an agreement stating they’re paid only for sessions the clinic is paid for, they’re agreeing to the same private practice reality we all face: sometimes a session doesn’t get paid. Sometimes there’s bad debt. This isn’t a personal failing—it’s part of the business.
What You Can Do When This Happens
If a situation like this arises and you feel called to make an exception, you can—but do it strategically and transparently. For instance:
Frame it as a one-time goodwill gesture, in alignment with your clinic’s values.
Clearly communicate that this is not setting a precedent, but rather a learning opportunity for both of you.
Reinforce the policy in writing and explain any next steps you’re taking to prevent similar issues in the future.
Empathy can still have a seat at the table. But it shouldn’t be driving the financial decisions that keep your business afloat.
Proactive Steps to Prevent Unpaid Sessions
The best way to protect yourself and your contractors from the awkward “who eats the cost” conversation is by tightening your systems. Here are some steps you can take:
1. Ensure a Valid Credit Card is on File
Make it mandatory to collect a valid credit card during the intake process. While therapists can’t pre-authorize charges like some industries can, having an up-to-date card ready gives you the best chance at timely payment if insurance falls through.
2. Collect Payment Before the Session
If you know the client is paying privately or insurance is pending, consider collecting payment before the session starts. It may feel uncomfortable at first, but this kind of clarity often builds trust.
3. Confirm Payment Has Gone Through Before the Client Leaves
For in-person sessions, don’t let clients walk out the door until the payment is processed and confirmed. It’s completely reasonable to have a “payment before leaving” policy—your dentist does it, your massage therapist does it, and so can you.
4. Verify Insurance Coverage in Advance
If the client is using insurance, do everything you can to verify that the session will be covered. Have a system for collecting benefit details ahead of time, and communicate to clients that they're ultimately responsible if coverage is denied.
5. Strengthen Intake and Contractor Agreements
Ensure your policies on failed payments and denied claims are clearly written in both your client intake paperwork and contractor agreements. This sets expectations from the get-go and minimizes miscommunication.
6. Have a Support System
When you’re dealing with these kinds of calls or emails, it helps to have a coach, mentor, or peer group you can check in with. Sometimes it’s less about what to say and more about staying steady while you say it.
Boundaries Are Kind
One of the greatest leadership lessons I’ve learned is that clear is kind.
Your role is not to shield your contractors from every bump in the road. It’s to create a solid, sustainable structure where they can do meaningful work, grow professionally, and serve clients well—within a system that protects everyone involved.
If you find yourself constantly giving beyond your limits—financially or emotionally—it’s time to pause and recalibrate. Compassion isn’t about self-sacrifice. It’s about creating a system that works for you, your clinicians, and your clients.
Final Thought: Lead Like a CEO
If you’re wondering whether to pay your clinician for an unpaid session, I’d encourage you to pause and reflect:
What’s the business policy here?
What precedent am I setting?
Am I stepping into the role of a CEO, or falling into the trap of over-responsibility?
These are not always easy questions. But they’re the questions that shape the future of your business.
So be kind. Be fair. But most importantly—be a leader.
In Closing…
These kinds of situations can feel emotionally loaded—especially when you care deeply about your team and the integrity of your practice. But making strong, values-aligned business decisions is part of your role as a CEO. It’s okay to feel uncomfortable, and it’s okay to stay firm.
I hope this helped you feel more confident about navigating these moments with clarity and compassion. If you’re facing a tough situation like this and want some guidance on how to handle it—or if you’re ready to strengthen the systems and leadership behind your group practice—I’ve got support for you.
I offer individual coaching for Canadian group practice owners, and my Group Practice Connection membership is full of resources, templates, and real conversations about exactly this kind of thing.
Wishing you courage and calm in your next difficult conversation—you’ve got this.
Lisa
As an added bonus, here is a sample script you could use with your contractor:
Hey [Clinician's Name], I wanted to follow up about the session with [Client's Initials] on [Date]. As you know, their insurance denied the claim, and the card on file was declined. We’ve made several attempts to reach the client, but unfortunately, we haven’t received payment.
I know it’s frustrating—especially since you showed up and held space for them, and that work has value. I want to acknowledge that.
That said, per our contractor agreement, clinicians are paid for sessions the clinic receives payment for. This is one of those tough situations where the business can’t absorb the cost.
These kinds of unpaid sessions are part of the reality of private practice—both for me as the clinic owner and for you as an independent contractor. That’s why our systems are structured the way they are, to protect everyone as much as possible.
Moving forward, we’ll be reviewing some of our processes to reduce the chances of this happening again (like confirming coverage in advance or collecting payment pre-session).
If you have any questions or feedback, I’m open to chatting more. I value the work you’re doing and want to make sure our systems support both your practice and the sustainability of the clinic.
