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Counselor Case Study: Improper management of boundary extensions and failure to adhere to interstate counseling regulations

Medical Malpractice Case Study with Risk Management Strategies
Presented by NSO and CNA
Medical malpractice claims may be asserted against any healthcare provider, including counselors. The insured in this case was a licensed professional clinical counselor (LPCC) who held a doctorate degree in counseling psychology and worked in a private practice setting.


This case involved a 30-year-old male client who contacted the LPCC to request marriage counseling. The client reported that he had a history of situational depression and anxiety for which he was not taking any medications. Because the LPCC was not licensed in the state where the client resided, he was unable to provide counseling due to licensing regulations.As an alternative, he offered the client remote life coaching services. As part of his practice, the LPCC advertised that he offered life coaching as an alternative to counseling for out-of-state clients. The advertisement included a disclaimer indicating that life coaching services were not reimbursable by health insurance. The client agreed with this plan and signed a written contract to proceed with life coaching.However, the LPCC did not engage in a detailed informed consent discussion regarding the limitations of life coaching and how it differed from counseling. In addition, the LPCC did not document a mental health assessment and plan, as they were not a requirement for life coaching.
The coaching sessions were initially conducted via videoconferencing and were focused on the client’s marital discord and career development. However, the client became more intolerant of the marital relationship and expressed a desire to “get away.” The client informed the LPCC that he had lost his job and could not afford to secure an apartment. He stated that continuing to reside with his spouse was exacerbating his depression and anxiety. The LPCC empathized with the client, and, in an effort to assist him, he invited the client to move into his home. In exchange for the living accommodations, the LPCC requested that the client perform household chores and handyman services. As part of the “bartering agreement,” the LPCC indicated that he would provide in-person life coaching sessions to the client.
The client accepted the offer and moved into the LPCC’s home. He performed household services, and the LPCC met with the client routinely to provide life coaching. After several months, the relationship inappropriately became more “personal.” The LPCC could no longer differentiate his role as to whether he was acting as a life coach, counselor or friend. For example, the LPCC would often refer to himself as a “counselor” in email communications with the client, but also would have personal interactions with the client on social media. Although the life coaching contract stated that the LPCC would not communicate via email, there were numerous personal emails between the LPCC and the client, including one in which the client expressed that he viewed their relationship as a friendship. At this point, the LPCC realized that he had crossed boundaries and needed to extricate himself from the situation.  He first informed the client about the importance of maintaining professional boundaries and made reference to the American Counseling Association (ACA) Code of Ethics. The client responded with anger and was resistant to making any changes to the situation.
Several days later, the LPCC consulted with a colleague who was a professional counselor. The colleague advised the LPCC to terminate the relationship with the client. The LPCC also shared his concerns about the client’s escalating emotional outbursts and suggested that the client may have a borderline personality disorder. The colleague agreed with this assessment and advised the LPCC to refer the client for a mental health evaluation.
The LPCC met with the client again outside of the home setting to discuss his concerns about the ongoing boundary extensions and to refer the client for a mental health evaluation. The client remained resistant and began exhibiting angry outbursts. Due to the client’s desire for a personal friendship, the LPCC reiterated that he was unable to continue in the relationship. He further stated that he was severing all ties with the client and thus requiring the client to move out of his home. The LPCC abruptly terminated the relationship believing that there were no other options.
After moving out of the LPCC’s home, the client began posting accusations of abuse about the LPCC on social media. The client had become aware of other clients who were being seen by the LPCC and contacted them in an effort to gain support for his personal vendetta against the LPCC. The other clients did not respond.

Risk Management Comments

Approximately six months after the LPCC terminated the relationship, the plaintiff (client) filed a lawsuit against the LPCC asserting the following:
  • Improper management of boundary extensions in violation of the 2014 ACA Code of Ethics.
  • Failure to adhere to state licensing statutes and regulations related to interstate counseling.  
  • Failure to conduct and document informed consent relating to the risks, benefits and anticipated consequences of extending the counselor/client relationship beyond conventional parameters.
  • Failure to initiate a timely referral for evaluation and treatment of borderline personality disorder.
  • Improper termination of the client-counselor relationship.
The plaintiff asserted that he suffered emotional distress, depression, anxiety, sleep disturbances and a loss of income as a result of the above-noted assertions.  In his deposition, he testified that he believed that the LPCC was acting as his counselor despite signing the initial contract for life coaching sessions.
The client was able to demonstrate through expert testimony and evidence, including emails and texts between the LPCC and client, that the LPCC was providing “counseling.” Defense experts in the field of counseling were unable to support the LPCC, as they agreed with the plaintiff’s assertion that the LPCC was serving in the role of a counselor, not a life coach.  Moreover, his actions failed to align with the ACA Code of Ethics. The experts highlighted the multiple emails authored by the LPCC referencing “counseling” and were critical of the LPCC’s statement indicating that he was working “under the guise of life coach” to justify out-of-state counseling. Although the experts believed that the LPCC’s intentions were altruistic, they opined that the relationship was inappropriate and harmful to the client. The lack of documentation also presented a significant challenge to the defense of this case. Other factors complicating the defense included the inappropriate bartering that took place as well as the abrupt termination of the established relationship. The LPCC acknowledged that he should have performed a more comprehensive mental health assessment, which likely would have limited or prevented the boundary extensions.
Based upon the above-referenced challenges, defense attorneys concluded that there was a low likelihood for a successful defense verdict. Therefore, a settlement was negotiated in mediation on behalf of the LPCC.
Total Incurred: More than $775,000.          
(Monetary amounts represent only the payments made on behalf of the counselor.)
Risk Management Recommendations
  • Understand and comply with all federal/state laws and regulations related to telecounseling. A lack of knowledge does not absolve the counselor of the responsibility to adhere to legal and regulatory requirements.
  • Review the ACA Code of Ethics at least annually and participate in continuing education programs related to evolving ethical issues. 
  • Clarify expectations regarding roles and boundaries, including the counselor’s availability and method of contact, to ensure that counseling is therapeutic and client-centered. Document the discussion and the client’s agreement.
  • Exercise professional judgement when extending counseling boundaries beyond conventional parameters in order to make culturally appropriate decisions and to prevent harm to clients. 
  • Follow the ACA Code of Ethics (A.12) when terminating the client-counselor relationship in order to avoid claims of abandonment and neglect.
  • Use caution when bartering with clients as this may be misconstrued as being self-serving. According to the ACA Code of Ethics (A.10.e.) counselors “may barter only if the bartering does not result in exploitation or harm, if the client requests it, and if such arrangements are an accepted practice among professionals in the community.” Further, counselors should “document such agreements in a written contact.”
  • Conduct a detailed informed consent discussion for every proposed  boundary extension, and document all discussions in accordance with the ACA Code of Ethics. (A.6.c.),including, but not limited to, the counselor’s rationale for the interaction and the potential benefits and risks for the client.
  • Develop a social media policy and conduct all interactions with clients via social media on a professional account. Refer to Section H of the ACA Code of Ethics for further guidance.
  • Document pertinent information for all client interactions contemporaneously and factually, as comprehensive documentation is the best proactive legal defense.

These are illustrations of actual claims that were managed by the CNA insurance companies.  However, every claim arises out of its own unique set of facts which must be considered within the context of applicable state and federal laws and regulations, as well as the specific terms, conditions and exclusions of each insurance policy, their forms, and optional coverages. The information contained herein is not intended to establish any standard of care, serve as professional advice or address the circumstances of any specific entity. These statements do not constitute a risk management directive from CNA.   This material is for illustrative purposes and is not intended to constitute a contract.  No organization or individual should act upon this information without appropriate professional advice, including advice of legal counsel, given after a thorough examination of the individual situation, encompassing a review of relevant facts, laws and regulations. CNA assumes no responsibility for the consequences of the use or nonuse of this information.

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