6 Tips for Opening a Private Practice
As I near the one-year anniversary of opening my private practice, I have been doing a lot of reflecting on things I wish I had known prior to opening my own private practice and the hurdles I had to overcome to get to where I am today. Starting a private practice felt exciting and empowering, but let’s be honest; it also felt overwhelming. Until I was in it, I didn’t realize how much behind-the-scenes work it would take. So here are six tips that I learned amidst the chaos that I wish someone would have shared with me when I was getting started:
Talk to Therapists Already in Private Practice
Before I made the jump, I reached out to other therapists who had left agency work behind. Unfortunately, the colleagues that I knew were all a part of established group practices. Still, these conversations were fruitful. I was able to hear about their real-life experiences to better understand what to expect. I was able to learn about average insurance reimbursements in my area, how long it often takes to receive payment from insurance and some of the challenges they faced in their own transition. If you are looking for more information on how to utilize this information to determine if private practice is the best next step for you, stay tuned for future posts! One of the therapists that I spoke with virtually was able to offer me a deal towards SimplePractice (which is something I will discuss later), but knowing how helpful saving money was in the early stages of my business, I wanted to pass those savings along here as well.
One thing that was challenging for me in this stage of opening private practice, was that I had limited to connections to others who had been in solo private practice for an extended period of time. Because of this, I was limited in the advice or information I obtained on the business aspect of things, which leads to me a lot of the other tips included!
2. Form Your Business Legally in Your State
So, this is one of those boring steps that is so important to the process. Before you can do almost anything else, you need to have a TIN (tax identification number), which you receive from registering your business according to your state’s requirements. Most people start by forming an LLC, however, some will transition to an S Corp. I encourage you to do your own research and talk with tax professionals in your area regarding which choice would be best for you and your business. This may also mean applying for any other licenses or permits that are required in your state or area. Again, this isn’t glamorous but getting it right from the start will save you from a lot of headaches down the line.
3. Apply for Your NPI
Again, this is one of those steps that is boring, but important. Even if you are not planning to take insurance, you still need an NPI (National Provider Number). It is required for billing, superbills, and a lot of documentation systems to verify that you are a credentialled provider. The good news is that this is free and easy to apply for online. First, you will want to verify that a previous employer didn’t already create an NPI for you (as some agencies will have done this). You can search for your name HERE to find out. Remember to search under any previous names (maiden, etc.) that you may have had. If you do not find yourself in the search process, you will go HERE, create an account and apply for an NPI. You may need to enroll your business for an NPI separate from yourself as a provider, depending on insurance requirements in your area.
4. Decide if You’ll Have a Physical Office, Telehealth Only- or Both
This is a decision that can feel challenging to make this early on in the process. However, you will be required to have a business address in order to credential with insurances (which we will discuss more in the next step). If you don’t plan to take insurances, you have more time to decide what is best for you. However, if you want to take insurance, you will need to have an address and phone number to provide on the application. This information is often included in a public directory (again, this varies by insurance, but was common in my area), so you may want to consider whether using your personal address or phone number is something you feel comfortable with.
Many people start being fully virtual (due to lower start-up costs) and then decide whether they can afford or want to add in-person options later. However, for my area, I knew (from those conversations in tip 1) that in-person sessions were much more in-demand. Both models can work. You just need to figure out what makes the most sense for your business, your lifestyle, your financial goals, and the population you serve. Don’t feel pressured to commit to one forever, as you can always adjust as you go!
5. Begin Insurance Credentialling (if it fits with your business model)
If you want to accept insurance, you will want to start the credentialling process early, as this step takes some time. Although accepting insurance is not for everyone, it is something you will want to discuss with others in the area to make an informed decision. While it may not work for some due to reduced payment/fees, it also can bring a steady stream of referrals. You will want to weight the pros and cons (specific to your area, your population and your business) to make the best decision for you.
For those who make the decision to take insurance, you do have the option of utilizing an outside person/agency to complete the credentialling applications for you. Personally, I utilized the online websites for the most popular insurances in my area and completed the applications myself. This was time consuming, but saved me money. Although it was a bit of a headache, it was similar to filling out an extensive job application and I found it to be manageable, as long as I set aside some dedicated and uninterrupted time to work on it.
In my experience, after submitting the initial applications it was a few weeks to months of waiting periods. Some of the insurance companies reached out periodically for different contracting and credentialling pieces that they were in need of (like signatures, W-2, proof of liability insurance, etc.). In total, I believe the credentialling process took me around 3 months from when I completed the applications until I was approved to begin seeing clients.
6. Choose the Right EHR (Electronic Health Record) System
There are a lot of EHR systems out there, and the best one is the one that works for you. You will want to have something that is built for therapists and that offers scheduling, documentation, billing and telehealth all in one place. The more features that the EHR system can streamline and offer to you, the better. Not only does this make private practice easier and more efficient, but it saves money compared to having to outsource features that you need.
I talked with a lot of therapists in my area, as well as others online to decide that SimplePractice was the best fit for me. Not only did it offer a free trial (that I utilized to learn about the system and get familiar with it before I was seeing clients), but it also offered all of the features I needed (and a lot more that I realized were important throughout my work). One of these was the ability to arrange billing and EFT (electronic funds transfer) right through their program. This means that when an insurance company pays me, it gets direct deposited into my bank account and I don’t have to deal with paper checks and waiting on snail mail. Another feature that I didn’t realize was so important until I had it was the clinician application on my phone. It allows me to see my schedule no matter where I am and utilize the secure messaging with clients. I can create a new client right from my device (for those times I get a referral call and I am not near my laptop). It even gives me the option to chart a session from the app (for those days I get home and realize that I never finished a note from the middle of the day). If you have questions about the plenty of other features offered through SimplePractice, feel free to reach out.
If you’ve decided that this is the best fit for you, use this link to get a free 7-day trial of SimplePractice, with an additional 70% off for the next 4 months AND a free 30 day trial of Note Taker.
Opening your own private practice is a BIG DEAL, but that doesn’t mean that it isn’t completely doable. With the right tools, support and mindset you can build something that feels aligned, sustainable and meaningful. You don’t have to have it all figured out day one. In fact, I’m 350 days in and I’m still continuing to grow and learn with my business. Start small, stay curious and give yourself permission to grow.
If you are starting to think about the transition to private practice and are filled with questions, fears or general curiosity OR if you read this and know that private practice is right for you and are ready for support towards the next steps- you don’t have to figure it out alone. Reach out here for private practice coaching. You will receive an email in 1-2 business days after you submit this form with information about how to get your first appointment with me scheduled!