Psychotherapy vs. Coaching: What’s the Legal Distinction?

Connor D. Jackson JD

Connor D. Jackson is a Chicago-based healthcare lawyer who has independent practices in several other states. Visit his firm’s website here.

Therapists have the necessary education, license, training, and clinical experience to help clients. But those things also come with restrictions: licenses are usually state-specific, and each state’s laws set forth a therapist’s legal responsibilities (like mandatory reporting). This leaves some therapists eyeing the “coaching” industry and profession with envy and asking, “Why don’t the same rules apply?”

Coaching and therapy are two different things.

Or at the very least, they shouldThey can be very different! While coaches are healthcare providers, therapists are healthcare providers. Although every state requires therapists be licensed, there is no state that regulates or licenses coaches. Coaches do not have to be licensed because there are no licensing requirements. 

  • Proper training or education
  • Oversight by a regulatory agency
  • Compliance with HIPAA is an obligation
  • Mandatory reporting requirements
  • Clinical experience

A coach is not a healthcare professional and cannot do work that infringes on a therapist’s legal scope of practice.  Coaches cannot do the following:

  • Their services can be billed to health insurance companies.
  • Offer the full range and services of therapists.
  • Treat or diagnose mental health conditions.
  • Use any term that is allowed for licensed professionals to describe your services.

Any coach who offers services that are similar to those of a licensed psychologist risks felony charges

Unlicensed people who enter licensed mental health care in Illinois, for instance, have been sanctioned by regulatory authorities. These are just a few examples. IDFPF’s disciplinary reports(Illinois Department of Financial and Professional Regulation).

  • An unlicensed person was penalized for practicing medicine without a license because she owned a business that offered psychiatry services — even though she performed only administrative duties.
  • An unlicensed person practiced licensed clinical social work for a decade and billed his services to insurance under a licensed provider’s credentials. 
  • An unlicensed person who used the term “social worker” was fined and sanctioned for engaging in the unlicensed practice of social work.
  • A therapist who billed an unlicensed person’s services to insurance was sanctioned for aiding and abetting the unlicensed practice of social work.

Other states are also strict. For instance, Oregon found that a woman’s “coaching” services were professional counseling services and She was approved.

Protected Language

In many states, licensed providers can use protected language. This means that people who do not have a license to provide services can use protected language. NotThose who hold the same license are not allowed to use certain words to describe or promote their services. 

In California, for example, LMFTs’ practice act says:

“No person may engage in the practice of marriage and family therapy… unless he or she holds a valid license as a marriage and family therapist… nor may any person advertise himself or herself as performing the services of a marriage, family, child, domestic, or marital consultant, or in any way use these or any similar titles, including the letters “L.M.F.T.” “M.F.T,” or “M.F.C.C,” or other name, word initial, or symbol in connection with or following his or her name to imply that he or she performs these services without a license as provided by this chapter.” (BPC § 4980(b))

Coaches who use certain words or abbreviations in their coaching can be punished for practicing the licensed profession unlicensed. So even if she’s never seen a single client, “Carrie Coach, MFT” is illegally holding herself out to the public as a marriage and family therapist.

Licenses vs. Certificates

For patients, a string of letters after a professional’s name can signal credentials and qualifications. Healthcare is different. 

Jane Jones, CPC. CSC. CHLC is a life coach who works with couples. Jane’s credentials? She’s a Certified Professional Coach, Certified Sex Coach, and a Certified Health & Life Coach. These certificates were all obtained from non-profit, for-profit businesses. Some were online-only, non-interactive programs. 

Jane may be using some acronyms in healthcare. A CSC could be a licensed nurse who has received additional training to obtain a certification in cardiac surgery. And a healthcare practice may require that their administrator be a CPC—or a certified professional coder trained in medical billing.

Imagine a couple searching for help because they are experiencing marital strain due to a traumatic experience. Jane is listed and has glowing online reviews. 

The couple compares Jane’s online profile with that of Tara Thomas, LCP. Tara is a licensed psychologist, and she has no reviews. This is because soliciting them from patients is against her practice act. Tara has extensive clinical experience and holds a Ph.D. from an accredited university in psychology. She has met all requirements for her state license and bills her services to insurance. She can also diagnose one partner’s PTSD, and she protects her records per HIPAA.

Jane Jones and Tara Thomas have starkly different experience and qualifications, yet they’re sometimes “competing” for the same clientele. However, it’s crucial to note that a coach whose work too closely mirrors Tara’s is likely practicing psychology without a license — a criminal offense in many states! 

Psychotherapists Who Practice as “Coaches”

Psychotherapists licensed by the state may consider the grass greener in the coaching field. While it may seem appealing for therapists calling themselves coaches to avoid regulation oversight, this can cause more headaches than they solve. 

Coaches are subject to the same legal regulations as therapists — they just have a much harder time satisfying them! Therapists are qualified, have practice acts and play a legal role in the protection of the public’s health. Meanwhile, coaches’ conduct isn’t regulated by any state’s law, but if they step into any of the areas within the scope of therapists’ practice, they, too, will face legal consequences. 

There is no shortcut to becoming a healthcare provider.

This article is intended for education purposes only and is not intended as specific legal advice. This article does not create an attorney-client relationship for Jackson LLP Healthcare Attorneys with the reader. It This information should not be construed as a substitute to competent legal advice from a licensed attorney within your jurisdiction. 

Psychotherapy regulation has one key benefit: it is fundamentally protective. Both mental health professionals as well as the public can benefit from a clear description of the roles and responsibilities involved in the practice and administration of psychotherapy. A therapist who acts outside of their scope of practice can be disciplined by a regulatory agency. There is no equivalent in coaching. Check out our classic article “50 Warning Signs of Questionable Therapy and Counseling” to learn more about behaviors to avoid as a therapist, both regulated and unregulated.

© Copyright 2021 All rights reserved. Permission to publish granted in part by Connor D. Jackson JD

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