Do I Need a Practice Contingency Plan? A Complete Guide for Psychology and Counseling Practices
As small business owners, sole practitioners and practice managers of psychology and counseling practices face unique challenges that go beyond the day-to-day provision of client care. While developing clinical expertise is the essence of allied health and care professions, the details of risk management (and necessarily contingency planning) are often relegated to the background— at least until a crisis emerges and the practitioner is not longer able to work in their practice. Fortunately, a bit of forward planning can eliminate an enormous amount of stress for practitioners and their next of kin regarding the continuity of their client’s care.
This guide explores the necessity, structure, and implementation of an adequately detailed and fit for purpose practice contingency plan (PCP) specifically geared for psychology and counseling practices. For psychologists, the need for a practice contingency plan is now inferred from the Code of Conduct released by AHPRA. Whether you are a sole practitioner or overseeing operations as a practice manager, this articles summarises best practices.
The Practice Contingency Plan: Why Contingency Planning is Critical
The Hidden Risks of Private Practice
The daily rhythms of practice often obscure the risks that can abruptly disrupt service delivery, from practitioner illness or unexpected personal emergencies to (at worst) the unexpected or premature death of a practitioner. When the practitioner is the linchpin holding together all the functions of the practice, their sudden loss of capacity, for whatever reason may be highly distruptive to the practice.
Preparedness as a Professional Imperative
Contingency planning is not merely a bureaucratic exercise. At its heart, it is about preparedness—anticipating potential threats and establishing protocols that ensure continuity of care, patient confidentiality, and access to records. In an environment where the practitioner’s presence is integral to every facet of operations, a thoughtfully constructed PCP is ultimately an ethical and professional obligation—one that can make the difference between a controlled transition and chaos in the wake of adversity. It is for this reason that the Code of Conduct now imposes an express obligation for practitioners to consider the continuity of the practitioners service insofar as this reasonably required by the circumstances.
What a Practice Contingency Plan is Not.
In discussing a practice contingency plan, it’s important to be very precise about what it covers. Unlike a will, a practice contingency plan does not take into account your preferences or bequests for who should receive your property and assets when you die.
A practice contingency plan is also not a succession plan. A succession plan will ordinarily relate to the transfer of control and ownership of the practice, whereas a practice contingency plan is more concerned with continuity of service for your clients.
A practice contingency plan is not a power of attorney. A power of attorney is a legal empowerment to someone in order for them to manage your assets.
Generally, these documents will need extensive input from a lawyer to be effective. A practice contingency plan, however, is an empowerment for your nominee to step in and take specific steps to ensure your client’s care is continuous.
What Constitutes a Practice Contingency Plan?
The Role of the Professional Nominee
A cornerstone of effective planning is the nomination of a professional peer—ideally someone with relevant clinical and regulatory expertise—who can step in (either temporarily or permanently) to oversee patient care and practice management in your absence. This nominee should be fully informed of their responsibilities and agree to serve should the need arise.
The nominee ought to have clear instructions how to access ongoing clients and your preferences as to how they’re to be notified of your inability to provide a service. Practice contingency plan may also provide contingencies for whether you’re incapacitated for a short period or permanently. If you’re permanently incapacitated you may wish for your clients to be transferred to another practice.
Managing Patient Records Securely
Another critical element is the secure management and transition of patient records. The PCP must spell out how to securely store, access, and, if necessary, transfer electronic and paper records, in accordance with privacy law and professional codes of conduct. This includes clear guidance on accessing passwords, locating files, and understanding which records are active, inactive, or due for secure destruction. If you’re putting a practice continuity plan in place, you might wish to consider ensuring that your client agreement has consent for your nominee to access these client records should you become incapacitated.
Communication Protocols
Practices must also have clear communication strategies for informing clients, staff, and stakeholders in the event of any disruption. Templates and escalation pathways for patient notification, referral arrangements, and practice updates (via phone calls, email, voicemail, or website updates) should be outlined, always with sensitivity to confidentiality.
Leveraging Technology
Technology forms a critical line of defense. Practices should ensure remote access to key systems (such as cloud-based electronic health records and secure data backups), as well as platforms for telehealth delivery and business continuity. The use of two-factor authentication and encrypted communication should also be standard. With this in mind, you may need to provide explicit instructions to your nominee as to how to access your digital records.
Legal and Financial Safeguards
Finally, the PCP may also account for legal and financial matters. This entails paying for onoing professional indemnity insurance, protocols for paying temporary staff or professional nominees, and reserves to cover ongoing costs. Integration with the practitioner’s will—under the guidance of a healthcare lawyer—may also be necessary for harmonising professional wishes with legal requirements.
Legal and Ethical Considerations
Aligning with Healthcare Regulations
Contingency plans must reflect current health sector regulations, including the AHPRA Code of Conduct and relevant Privacy Laws.
Ensuring Patient Confidentiality and Continuity of Care
Plans must articulate the processes for patient handover—consent for information sharing, procedures for referral, and measures to ensure patients receive appropriate care regardless of the practitioner’s status.
The Role of Legal Advice
Seeking independent legal counsel is strongly advised when drafting a PCP. This minimises the risk of unintended conflicts between the PCP, your will, or employment contracts, and ensures your intentions can be executed as planned.
Compensation
While PCPs are not legal documents per se, a PCP should clarify compensation for the nominee, the mechanism for their payment via the estate (in the event of death), or via power of attorney (for incapacity), and detailed instructions for the executor.
Practical Steps: Building Your Practice Contingency Plan
- Conduct a Comprehensive Risk Assessment: Evaluate your unique vulnerabilities: health emergencies, disasters, regulatory concerns, and technology failures.
- Draft the PCP Document: Set out procedures for each risk, including appointment of a nominee, emergency communication plans, and protocols for patient care transition.
- Legal Review: Secure advice from a lawyer experienced in healthcare. Review all documentation against professional standards, laws, and ethical codes.
- Stakeholder Communication: Inform all relevant parties—nominees, staff, next of kin, executor, and, where necessary and appropriate, clients—of the plan and their specific roles.
- Integrate Technology Solutions Ensure your records, scheduling, and communication systems are backed up, cloud-accessible, and secured with robust passwords and encryption. Ensure the PCP has a provision for your nominee to access the passwords.
- Formalise Legal Documentation Maintain all legal agreements, including the PCP, professional will, enduring power of attorney, and payment authorisations, in a readily accessible yet secure location.
- Regularly Review and Revise Schedule annual reviews—or more frequent updates following significant changes in practice circumstances, law, or technology.
Special Considerations and Q&A
Who should serve as my professional nominee? Ideally, a registered psychologist or qualified health professional with experience in private practice settings. If colleagues are reluctant, a fee-for-service arrangement with a trusted professional may be necessary.
Should I reference the PCP in my will? Yes—consult your lawyer to ensure the PCP is referenced in your will as a separate, practice-specific document. Without this, the executor (who may not be a health professional) may lack both the authority and knowledge to effectively wind up your professional affairs.
What if I become incapacitated for a period? The PCP should also specify arrangements in the event of incapacity, not just death—including notification procedures, file management, and payment for the nominee.
How should payment for my nominee be structured? Payment may be an agreed one-off or ongoing fee, drawn from your estate or arranged via power of attorney in the case of incapacity. Address this in your will and/or PCP, with legal advice, and ensure you have contingency funds in place.
CHECKLIST: Key Elements of a Practice Contingency Plan
- Appointed professional nominee(s) with clear contact details and agreement regarding responsibilities and fees.
- Detailed practice access instructions (locations, security arrangements, passwords, key holders).
- Protocols for secure and legal management of current and past records.
- Clear procedures for client communication and notifications.
- List of external agencies and stakeholders to be notified in the event of incapacity or death (insurers, regulators, referrers, accountants, etc.).
- Integration of up-to-date legal and ethical guidance, with regular review cycles.
- Contingencies for both short-term incapacity and permanent incapacity/death.
The Value of a Proactive Approach
Avoiding Costly Interventions
Without a PCP, an external Manager may be appointed (potentially costing $40,000 or more), disrupting care, impacting reputation, and imposing additional strain on grieving family or unprepared staff. A PCP not only reduces this risk but allows you to appoint someone you trust. If your incapacity is only temporary, a PCP will also prevent you from breaching the code of conduct.
Securing Your Practice and Your Clients’ Wellbeing
Taking the time to prepare a PCP—and integrating it with your legal, financial, and clinical frameworks—sends a powerful message of responsibility to clients, staff, and peers. It ensures that, whatever arises, your practice remains a place of care and trust, able to weather personal and professional storms with grace.
Conclusion: Foresight as Professional Duty
Establishing a practice contingency plan transcends administrative necessity; it is a profound act of stewardship for your clients, your colleagues, and your community. It protects not only the infrastructure and financial health of your practice, but the therapeutic relationships and patient trust that underpin your work. In a world where uncertainty is a given, such planning is not just prudent; it is indispensable to ethical practice.
If you’re ready to take the next step in safeguarding your practice, our experienced team can advise and guide you in tailoring a Practice Contingency Planning Agreement to your needs. Don’t leave your patients, staff, or loved ones unprepared. Contact us to discuss your unique situation, and ensure your practice remains in safe hands, no matter what the future holds.
Therapas provides a legally reviewed practice contingency plan here.
