Congratulations! You’re starting a behavioral health private practice. You’ll have the independence to run your practice the way you like, hold the office hours you want, and experience all the benefits of being on your own.

But first, there’s a lot to think about before you throw open your doors and see your first client. Here are 15 important preparations to make before you head out on your own:

 

Let’s start out with some nuts and bolts that your clients won’t see. They’re important to make sure your practice is legal, financially safe, and registered with government as well as insurance entities:

 

1. Register your LLC/PLLC.

According to NerdWallet, registering your new practice as a limited liability company (LLC) or professional limited liability company (PLLC) is an important way to separate your personal finances from your professional finances. This is essential in the event that you file bankruptcy, someone takes legal action against your practice, or other events where you need to protect your personal assets because of a problem in your practice.

This expert also notes that you should check with your state to see if it has any specific requirements or recommendations about registering.

 

2. Get a national provider identifier (NPI).

Having a NPI is essential (and required by law) if you are going to be conducting electronic transactions for HIPAA-covered business. This can apply if you’re using an EHR and if you’re sending electronic claims to insurance companies.

You can apply for a NPI from the Centers for Medicare & Medicaid Services (CMS – remember this acronym, it comes up a lot!) here.

When you apply for your NPI, you’ll need to select a taxonomy code. This is a code that describes to CMS what kind of provider you are, how you’re classified, and what you specialize in. For example, you can apply for a NPI with or without a license, but it will change which taxonomy code you use. Keep in mind that if you get your original NPI before you get licensed, you’ll need to update it later.

 

3. Get insured.

Typically there are two types of insurance a mental health professional or group practice needs: Liability insurance and malpractice insurance.

USA Today notes that getting liability insurance for your practice is extremely important. Doing so protects you in case someone is injured while they’re in your office and incurs medical expenses.

You will also need malpractice insurance, which is there in case a client sues you because they believe your practice caused harm to them. This type of insurance is usually required if you want your services to be covered by insurance. Speaking of that, you should…

 

4. Get credentialed with insurance.

If you want access to insurance networks (or even if you don’t, more below), start working on credentialing the moment you have an NPI, license, malpractice insurance, have a tax ID and sign a contract for office space. Credentialing is the process of applying to an insurance company (also known as a “payer”) to prove you’re a valid provider of services. If you’re successfully credentialed, that means your services will be covered by that insurance company.

This is a long process that typically takes 60-120 days or longer when the paperwork is filled out correctly. Mistakes can double the amount of time it takes to get credentialed. Services like CAQH ProView and, here in MN where we’re based, the Minnesota Credentialing Collaborative (MCC) are designed to store your provider data and submit credentialing requests to multiple payers.

Now, you may have heard of out of network (OON) benefits, where a client can ask to be reimbursed for your services by insurance even if you’re not part of the payer’s network. This doesn’t necessarily get you out of credentialing: Some payers require you to credential even if you or your client will submit for OON.

You should also look ahead to the next step:

 

5. Get contracted with insurance.

Contracting is the process of getting a contract with an insurance company to render those services at agreed-upon rates. Most payers look at the number of providers in a specific geographic area when they’re deciding if they want to contract with you. Make sure to focus on what makes you different from other providers like certifications, specialties, or unique populations that you work with.

Requirements vary by payer and whether you are submitting with a group or individual NPI, but the basic requirements are items we’ve covered:

• Tax ID
• NPI
• License
• Proof of insurance (individuals are required to show Proof of Malpractice Insurance and a copy of a valid license)

Credentialing and Contracting can be daunting, but we can help! Contact Us to learn more about our credentialing and contracting services.

 

6. Set your rates (and give them some thought).

Rates can be tricky. A lot goes into them, from what clients in your area are willing to pay to how many clinicians are near you and how insurance will reimburse. While we recommend consulting with your professional association or colleagues, here’s how you can get a good start:

Typically you want to charge more than you are contracted to get paid by any one payer. So if you’re contracted with Payer 1 to get $85 for a one hour session and Payer 2 pays $93/hr, go for something above $93; just in case the payer decides to increase their reimbursement rate. The charge should generally also be something that your OON or private-pay clients can afford as well. Insurance companies aren’t fans of being charged more for the same service, although there is wiggle room when financial hardship is involved.

If you’re contracted, read your contract carefully. You may be able to request increases in the amount a payer pays you each year.

 

7. Write a professional will.

Right now you’re excited to begin your practice, and the last thing on your mind is probably what happens if you pass away. But for the sake of your clients and your estate, it’s important to prepare for that possibility.

American Psychological Association services recommends that you write a professional will. This is where you name a trusted colleague as an executor to wrap up your practice in the event of your death. This includes notifying your clients of your passing, assisting them with the transition, and making sure their health records are retained safely for as long as the law requires.

 

8. Make sure you have savings in the bank.

When your practice is getting started, you’ll spend a lot of time finding clients and building your caseload. You won’t make money right away.

So, you need to save up enough money to keep you going until your start making money. Make sure to take a realistic look at what your expenses will be (including how much you need to pay yourself), and think of how much money you need to cover them.

It may be a good idea to take a full-time job at an agency or a group practice first. Then you can start part-time as you build clients at your own practice or save up more money and go full time right away. Learn the pros and cons of these approaches here.

 

9. Create forms for clients.

No one likes paperwork, but making sure you have all the forms you need to legally and ethically practice is extremely important.

These forms should be ready for clients to fill out before their first appointment, including:

• Notice of a client’s rights under HIPAA
• Consent to receive treatment and a clear understanding of charges, policies about cancelations and emergency procedures, and notice about where a client can submit complaints
• Permission to bill insurance for services rendered

 

10. Get an electronic health records/practice management system.

Having an electronic health records (EHR) system is important (We know a good one). First and foremost, it keeps your clients’ health records safe, secure and backed-up. A good EHR will streamline your work day, and many offer features that clients expect like completing intake forms, scheduling and paying bills online, as well as text-message reminders for upcoming appointments.

Get that EHR right away so you can keep all your clients records safely in the cloud from day one and avoid having to transfer many client files into an EHR later when you have too many to manage.

 

While all those back-end details are really important, you also have to make sure your customer-facing assets are ready to attract prospective clients:

 

11. Create a website.

A website serves multiple important functions for prospective clients: It gives clients a place to find you, helps your practice be found by search engines, and lets clients get to know you. You can make the website more helpful by including pictures of yourself, information about how you provide therapy and what conditions you specialize in, what insurance networks you’re credentialed with, as well as your contact information.

You should also consider if you want to post your fees to your website. While some clients may decide not to use your services if the price is higher than what they think they can afford, you also gain some trust and credibility by being transparent about how much your services will cost.

If you don’t have an EHR with a client portal where you can have clients fill out the intake paperwork we talked about above, you will want to put those forms on your website so clients can print them out.

Today it’s pretty easy to create and maintain a website with tools like Squarespace and Wix that offer drag and drop setup and access to stock imagery.

 

12. Establish referral sources.

When you’re starting with zero clients, a website is probably not enough to get the word out about your practice. You can sign up for websites that clients use to find therapists, like Psychology Today and GoodTherapy. Your local professional organization may also provide opportunities for you to advertise your practice. And there are plenty of social networking groups for therapists online where you can form relationships with other clinicians based around location, specialty, or license who can refer to you.

 

13. Figure out how clients will contact you.

We said above that you need to put contact information on your website. So, you need to figure out how your prospective clients will contact you.

Even though communications are moving more toward electronic, a lot of clients will still prefer to call you. One option is to stick with using your cell phone. In that case, USA Today recommends that you set up a professional-sounding greeting for your voicemail. You can also set up a Google Voice or other virtual phone line that will have a different phone number but will still ring your phone. To keep client information safe, we recommend that you password protect the phone you use to access this voicemail. Also, many insurance companies will require you to state in your answering message, “If this is an emergency, please call 911, (a crisis hotline if available) or go to your closest emergency room.”

You can also sign a contract with a call center. This option will be a bit more expensive, but it can offer advantages like making sure a prospective client always speaks with a human, even if they simply greet the client before redirecting them to your voicemail. Many call centers offer hourly rates so you don’t pay for calls you don’t receive.

You can set up a secure email like ProtonMail or Paubox or any other secure email service. Just make sure they’ll sign a BAA. This gives you a secure way for you and your clients to communicate securely.

Finally, many EHR’s with online portals will allow prospective clients to reach out electronically to ask for more information.

When you’re looking into any of these options, make sure they’re HIPAA-compliant or you get acknowledgement on your consent for treatment from your clients to use these services.

 

14. Get listed on mapping sites.

Now that you have the ingredients to convince a client to sign up for their first session, you want to make sure it’s easy for the client to find your office. While providing an address on your website is enough for the client to put into a mapping app, you can make it even easier.

Consider adding your practice to the map listings for major mapping apps like Google. This way, your clients can just search for your practice name in their favorite mapping application, and your business will pop up. This will also make your clients more confident they have the right location and didn’t type in the address incorrectly.

 

15. Get an office that fits your needs.

Now that your client has good directions to you, make sure you have an office that has amenities that make clients comfortable and allow you to conduct business. Look for an office with a thermostat and internet access. See if your office offers a non-PO box address. And see if the landlord offers front desk and scheduling services.

This therapist consultant notes that you don’t want to have an office that’s too big. It can cost you a lot of money that you don’t need to spend.

And speaking of saving money, you can keep costs down by renting an office by the hour or the day. This gives you the flexibility to start small and grow if you add another client. You may even be able to sublease from another therapist who doesn’t need their office at all times.

 

So, those are a lot of essential things you need to do when you’re starting your private practice. Of course this list isn’t all-inclusive, and these are guidelines. For any legal questions, make sure to speak with a lawyer.

If you’ve already started your practice, let us know on Facebook, Twitter or LinkedIn what else new practiced administrators should be doing as they start their practices.