Process of starting a small private practice

[fallen625]

I am wondering if anyone has any thoughts on how you go about starting a small private practice. Would just love any advice in general. I have an academic job but want to start something small (i.e., one day a week, half a day a week) to keep doing just a little therapy/keep up my skills. Would love to hear any thoughts on anyone who has done anything like it, or any helpful resources. My husband has run is in business/has his own small side hustle as a hobby so he can teach me the business/accounting/etc. side of things, but I am wondering how you even go about learning about marketing, finding patients, issues like insurance, how to deal with the space issue when you only need space for one day a week, record-keeping, etc. Any resources or advice would be appreciated.

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[AcronymAllergy]

Quickly popping in to recommend starting with a book geared toward the topic, such as "The Paper Office in the Digital Age." I'm sure plenty of other folks will have great suggestions.

 

[beginner2011]

In about four months I will be in a very similar position to you, @fallen625. I've been trolling PsychologyToday and other known group practice websites from folks in my area to collect forms (e.g., informed consent, privacy policy, intake, etc.) and see how people advertise their services on the internet.

TELEHEALTH: I know doxy.me offers free HIPAA compliant telehealth services.
DIGITAL PRACTICE: I think SimplePractice seems to have the best reputation in terms of functionality and cost. If you're doing telehealth then I think you probably need something that's encrypted to communicate with folks since email won't cut it. If it weren't for the difficulty of communication I would probably go with manual documentation using word/excel docs I create myself.
OFFICE SPACE: In terms of space, I don't know. I've started to reach out to colleagues in private practice in the area, but haven't had luck so far. Everything seems to be fully sublet! I may start to try being a bit more creative, since I'll probably only be using the space for telehealth sessions for at least a while.
ADVERTISEMENT: It seems like the best/most common method is to get connected with established folks who can provide referrals. In my area, my impression is that the majority of providers are booked out and happy to have someone with availability to refer folks to. I've also heard PsychologyToday is a good place to have a presence.

 

[foreverbull]

There should be some threads on this—I know I’ve contributed to the topic at times.

I have a list of some things I had to do to go into private practice logistically (ie business EIN, publishing business name, opened a business account, etc.). I’m happy to share info privately.

Just to add to what @beginner2011 said, as someone who doesn’t take insurance, Psychology Today has been and continues to be the main source of referrals in my practice (although word of mouth, my website, and listserv referrals help some) and includes telehealth for no additional cost other than the subscription. Also, I know people love their Simple Practice, but there are cheaper options with similar features these days.

@beginner2011 the paid Gmail business/workspace is HIPAA compliant, so technically email can be HIPAA compliant. I purchased it precisely for that reason—it has higher security than typical gmail and a BAA, if I recall. If you want to get really technical, if your client is willing to send their own PHI over email, that is consenting to the risk if you inform them of the risk prior and give them a more secure option (snail mail). I’ve seen this done in medical offices as well. That said, it’s not meant to be a longterm solution and the therapist isn’t sending PHI—only the client in that situation, and by doing so, consented to it.

At any rate, there’s a lot that goes into creating a practice, from creating your business name, to purchasing general insurance if you lease an office, building your website, writing up your consent forms, marketing, etc. I’m not sure that a thread will cover it all, but I’m happy to share some pointers—feel free to PM me.

 

[erg923]

I am wondering if anyone has any thoughts on how you go about starting a small private practice. Would just love any advice in general. I have an academic job but want to start something small (i.e., one day a week, half a day a week) to keep doing just a little therapy/keep up my skills. Would love to hear any thoughts on anyone who has done anything like it, or any helpful resources. My husband has run is in business/has his own small side hustle as a hobby so he can teach me the business/accounting/etc. side of things, but I am wondering how you even go about learning about marketing, finding patients, issues like insurance, how to deal with the space issue when you only need space for one day a week, record-keeping, etc. Any resources or advice would be appreciated.

Should you even bother with insurance if you are are dedicating just 4-8 hours/week to clinical services?

 

[WisNeuro]

Yeah, with that little amount of time, I wouldn't bother with insurance. You'll spend as much time per week dealing with insurance companies as you spend in clinical work.

 

[PsyDr]

In general:

1) Office rent is going to be your largest expense. This will determine if you are vaguely profitable.
2) Some of the work arounds for #1 is getting cheaper rent by subleasing space at non-peak hours, OR by renting/buying your own space and subleasing it to someone else at a higher rate. Local psych associations are a gold mine for locating these.
3) Record keeping is a non-issue. Get a cheap EMR or a high speed scanner +encryption software.
4) If you take insurance, then you don't have to market. Patients will find you by searching their insurance website.
5) Getting an insurance biller for a small practice can be difficult, as many take a percent of gross billing. Billers then have a choice of 10% of $10k or $10MM. Finding a good fit is complicated.
6) Insurance contracts usually have requirements for availability, which can complicate part time practice.

 

[Sanman]

Yeah, with that little amount of time, I wouldn't bother with insurance. You'll spend as much time per week dealing with insurance companies as you spend in clinical work.

There are only two ways to increase profit. Increase your hourly earnings or increase your volume. You don't have time for volume, so taking insurance is unlikely to benefit you much.

 

[R. Matey]

There are only two ways to increase profit. Increase your hourly earnings or increase your volume. You don't have time for volume, so taking insurance is unlikely to benefit you much.

Have folks here had any luck obtaining private pay clients for psychotherapy for a small practice like this and actually turn a profit?

 

[Sanman]

Have folks here had any luck obtaining private pay clients for psychotherapy for a small practice like this and actually turn a profit?

I know several VA folks that see 3-5 clients for cash that did nothing more than a psychology today listing. Not even a website. The issues come in when you need volume.

 

[foreverbull]

Have folks here had any luck obtaining private pay clients for psychotherapy for a small practice like this and actually turn a profit?

Subletting an office from someone else just one day a week or a few evenings can keep costs down for part-time practitioners and maximize profit. But since some of this goes straight to state and federal taxes + business costs, it also really depends on your ongoing business costs. Regardless of part-time vs. full-time, you still have to have insurances (malpractice, general too if you sublet an office that isn't covered) and a few other costs, like a local business license, license renewal fees, CEs, etc. If your 9-5 employer covers any of these, that's a huge bonus and will cut costs in your business.

 

[taylortaylor164]

6) Insurance contracts usually have requirements for availability, which can complicate part time practice.

Would you be able to expand on this? What are some examples?

 

[WisNeuro]

Would you be able to expand on this? What are some examples?

For them to accept you into their network, you have to provide a certain number of "available" hours in the week.

 

[PsyDr]

Would you be able to expand on this? What are some examples?

Example: I was a privder for FICTIONAL Insurance Company. FICTIONAL Insurance Company has 50 different plans. I initially agreed to take their PPO plan. FICTIONAL Insurance suddenly required me to take ALL of their plans. Some of these plans pay less. Some plans required preauthorization for each unit of testing (e.g., HMO plans). One of these plans required me to schedule new patients within 24 hours of being called. That was not possible for me or any other neuropsych provider in the area.

Imagine how that works for someone who is only doing clinic work 1 day/week. You're at your day job on a Monday. You get a call saying that you HAVE to see someone tomorrow. What're you going to do? Take a vacation day each time that happens?

 

[foreverbull]

Example: I was a privder for FICTIONAL Insurance Company. FICTIONAL Insurance Company has 50 different plans. I initially agreed to take their PPO plan. FICTIONAL Insurance suddenly required me to take ALL of their plans. Some of these plans pay less. Some plans required preauthorization for each unit of testing (e.g., HMO plans). One of these plans required me to schedule new patients within 24 hours of being called. That was not possible for me or any other neuropsych provider in the area.

Imagine how that works for someone who is only doing clinic work 1 day/week. You're at your day job on a Monday. You get a call saying that you HAVE to see someone tomorrow. What're you going to do? Take a vacation day each time that happens?

I had also heard from a colleague who takes both cash and insurance that you technically can’t turn down an insurance client if you have availability (to save a slot for private pay) or that’s somehow a huge problem with the company. I think it goes back to reserving set hours for insurance-based clients, but that seems ridiculous to have to turn down higher paying client because it’s slotted for insurance clients. This led to frustration for my colleague who wasn’t making as much as expected from insurance-based clients and wanted more cash paying ones instead, but had already made an agreement.

I’m not sure how often/quickly you’re allowed to adjust the number of available slots for insurance clients. Has anyone had experience with this and know more about it?

 

[Sanman]

I had also heard from a colleague who takes both cash and insurance that you technically can’t turn down an insurance client if you have availability (to save a slot for private pay) or that’s somehow a huge problem with the company. I think it goes back to reserving set hours for insurance-based clients, but that seems ridiculous to have to turn down higher paying client because it’s slotted for insurance clients. This led to frustration for my colleague who wasn’t making as much as expected from insurance-based clients and wanted more cash paying ones instead, but had already made an agreement.

I’m not sure how often/quickly you’re allowed to adjust the number of available slots for insurance clients. Has anyone had experience with this and know more about it?

I'm curious, how did they know what hours were actually available/filled?

 

[erg923]

I had also heard from a colleague who takes both cash and insurance that you technically can’t turn down an insurance client if you have availability (to save a slot for private pay) or that’s somehow a huge problem with the company. I think it goes back to reserving set hours for insurance-based clients, but that seems ridiculous to have to turn down higher paying client because it’s slotted for insurance clients. This led to frustration for my colleague who wasn’t making as much as expected from insurance-based clients and wanted more cash paying ones instead, but had already made an agreement.

I'm pretty sure this is Hokum. They don't know your schedule.

 

[taylortaylor164]

I had also heard from a colleague who takes both cash and insurance that you technically can’t turn down an insurance client if you have availability (to save a slot for private pay) or that’s somehow a huge problem with the company. I think it goes back to reserving set hours for insurance-based clients, but that seems ridiculous to have to turn down higher paying client because it’s slotted for insurance clients. This led to frustration for my colleague who wasn’t making as much as expected from insurance-based clients and wanted more cash paying ones instead, but had already made an agreement.

I’m not sure how often/quickly you’re allowed to adjust the number of available slots for insurance clients. Has anyone had experience with this and know more about it?

Also what if that patient is not within your area of competence? I can see a lot of problems with this.

 

[foreverbull]

I'm curious, how did they know what hours were actually available/filled?

I think the clinician may have actually told them that she didn't want to take as many insurance clients in her schedule in anymore? I think at some point the person was told that as long as they had an agreement/contract, the clinician couldn't turn down their insured clients for those open slots.

To be fair, I don't know this person super well and didn't hear what happened after that.

 

[WisNeuro]

I'm pretty sure this is hokum. They don't know your schedule.

Well, you have to supply your clinic schedule when you credential. And, if they hear enough from patients that they can't get in to see you they can drop you from their panel. But no, thy don't have access to your schedule once you are up and going.

 

[erg923]

Well, you have to supply your clinic schedule when you credential. And, if they hear enough from patients that they can't get in to see you they can drop you from their panel. But no, thy don't have access to your schedule once you are up and going.

For goodness sakes, son....

 

[WisNeuro]

For goodness sakes, son....

? Have you never applied to insurance panels old man? Or did they do it differently back in the days of humors and trephination?

 

[erg923]

? Have you never applied to insurance panels old man? Or did they do it differently back in the days of humors and trephination?

Yes. I shook a hand or two over the Chesterfield, adjacent to the davan.... right before I used my "tooth polish" for the night.

In my most serious Boston accent....stop being so serious @WisNeuro

 

[ClinicalABA]

? Have you never applied to insurance panels old man? Or did they do it differently back in the days of humors and trephination?

Can you really trust anything erg says on insurance issues? He's one of "them" now😉 says so right there next to his profile picture!

 

[Sanman]

Can you really trust anything erg says on insurance issues? He's one of "them" now😉 says so right there next to his profile picture!

It is also possible that it is all a lie and he is really a drummer in an English rock band.

 

[ClinicalABA]

It is also possible that it is all a lie and he is really a drummer in an English rock band.

Good point- insurance peer reviewers and mentally unstable drummers do share a lot of similar traits.

 

[Sanman]

Good point- insurance peer reviewers and mentally unstable drummers do share a lot of similar traits.

I can see both groups having sudden urge to destroy a Holiday Inn, perhaps for different reasons.

 

[WisNeuro]

I can see both groups having sudden urge to destroy a Holiday Inn, perhaps for different reasons.

In my real world experience, I would much rather destroy a peer reviewer than a hotel room. We've got some terrible ones here, particularly the ones employed by bcbs.

 

[Sanman]

In my real world experience, I would much rather destroy a peer reviewer than a hotel room. We've got some terrible ones here, particularly the ones employed by bcbs.

Never felt the urge to destroy a peer reviewer, but perhaps an insurance company. I reserve my contempt for the wheel not the cog. Though in some way, shape, or form care will always be capitated and this is what we get for not having a mature national convo.

 

[WisNeuro]

Never felt the urge to destroy a peer reviewer, but perhaps an insurance company. I reserve my contempt for the wheel not the cog. Though in some way, shape, or form care will always be capitated and this is what we get for not having a mature national convo.

I dunno, have you ever had to talk to a peer reviewer? I had one who claimed to be board certified, turned out it was a vanity board and not even in neuro. They also refused to allow for more than 4 total hours (interview, testing, scoring, report writing, feedback) for a weird case in the parkinson's plus area. Only time I've made a formal complaint to the state DoH.

 

[Sanman]

I dunno, have you ever had to talk to a peer reviewer? I had one who claimed to be board certified, turned out it was a vanity board and not even in neuro. They also refused to allow for more than 4 total hours (interview, testing, scoring, report writing, feedback) for a weird case in the parkinson's plus area. Only time I've made a formal complaint to the state DoH.

Dozens from different companies, Level 1 and Level 2. It became a large part of my previous job when certain companies were routinely denying payments for 20+ clinicians and we lost $100k in billables one month due to this. The game became figuring out the correct code words to use to get it approved via talking to many different reviewers. United Healthcare was worse than BCBS for me due to their push to take over the LTC market (if a facility signed up X number of their LTC folks, United provided their own NP to manage (limit) care. One of the many ways I saw the winds changing and left for the VA.

That said, I know the hours and money they offer. I don't blame anyone for opting for a job with better hours and pay. Not sure what that says about the system when reviewing care pays better than providing the actual care.

 

[PsyDr]

1) The entire business model for insurance is contractually obligated people to an agreement that they have no possible way of understanding. Once they get that contract, the business model is to take in more money than you pay out for medical care. No one reads the contracts, except for lawyers and obsessive personalities.

2) The majority of clinicians fail to educate themselves about the areas in which they work. As hilariously narcissistic as it is unethical, people just assume they know what something means.

3) Healthcare insurance denials are only denials in payment, not in getting services.

4) are the healthcare insurances a bunch of jerks? Sure! So are the providers who get mad when the terms of their contract are enforced, or when they are asked to do evidence based practices.

 

[WisNeuro]

1) The entire business model for insurance is contractually obligated people to an agreement that they have no possible way of understanding. Once they get that contract, the business model is to take in more money than you pay out for medical care. No one reads the contracts, except for lawyers and obsessive personalities.

2) The majority of clinicians fail to educate themselves about the areas in which they work. As hilariously narcissistic as it is unethical, people just assume they know what something means.

3) Healthcare insurance denials are only denials in payment, not in getting services.

4) are the healthcare insurances a bunch of jerks? Sure! So are the providers who get mad when the terms of their contract are enforced, or when they are asked to do evidence based practices.

"But it is essential that I administer a full WAIS, the Rorschach, and a TAT to diagnose ADHD!" (true story back when I used to do some peer reviews as a side hustle).

 

[PsyDr]

"But it is essential that I administer a full WAIS, the Rorschach, and a TAT to diagnose ADHD!" (true story back when I used to do some peer reviews as a side hustle).

It’s absolutely ridiculous to fail to read every sentence of their insurance contracts, including their own personal healthcare insurance. There are literally cancer exclusions in many healthcare insurances. Only the ridiculously reckless are willing to gamble their entire life, instead of spending an hour reading the agreement

 

[WisNeuro]

It’s absolutely ridiculous to fail to read every sentence of their insurance contracts, including their own personal healthcare insurance. There are literally cancer exclusions in many healthcare insurances. Only the ridiculously reckless are willing to gamble their entire life, instead of spending an hour reading the agreement

I'm one of those who reads everything in most legal contracts. Along with every word of health insurance lit before picking a plan. Unlike my sister-in-law, who found out the hard way what a high deductible plan means when you go for anything besides a yearly physical.

Hint to future job seekers, you should definitely do this and monetize the insurance benefits when comparing jobs and negotiating positions.

 

[medium rare]

This thread reminds me, yet again, why I do not take insurance. My practice is already bursting at the seams; I cannot imagine what it would be like to be on an insurance panel or two and have to deal with that demand and headache.

Interestingly, in the last couple years I have had an increasing number of calls from insurance companies asking me to join their network. I never bother to return the call. Seems like the tide (in my area anyway) is shifting.

I remember the days when folks were scrambling to join panels in a Darwinian-like attempt to survive and an attitude of doom and gloom hovered like a dark cloud over the practice of psychology. I still chuckle nowadays when I encounter a fellow psychologist who says, “there’s no way to make it in private practice without taking insurance.”

 

[WisNeuro]

This thread reminds me, yet again, why I do not take insurance. My practice is already bursting at the seams; I cannot imagine what it would be like to be on an insurance panel or two and have to deal with that demand and headache.

Interestingly, in the last couple years I have had an increasing number of calls from insurance companies asking me to join their network. I never bother to return the call. Seems like the tide (in my area anyway) is shifting.

I remember the days when folks were scrambling to join panels in a Darwinian-like attempt to survive and an attitude of doom and gloom hovered like a dark cloud over the practice of psychology. I still chuckle nowadays when I encounter a fellow psychologist who says, “there’s no way to make it in private practice without taking insurance.”

At this point it's just getting on a couple of the good ones to maintain a certain percentage of clinical work to keep the courts happy in the IME world

 

[taylortaylor164]

It’s absolutely ridiculous to fail to read every sentence of their insurance contracts, including their own personal healthcare insurance. There are literally cancer exclusions in many healthcare insurances. Only the ridiculously reckless are willing to gamble their entire life, instead of spending an hour reading the agreement

Is it common for providers to turn down signing an insurance contract once they read the fine print and reimbursement rates? It seems you are flying blind until you receive the actual contract.

 

[erg923]

I am not a peer reviewer, you idiots!

Provider relations issues move UP the chain of command (to me)...not down

 

[Sanman]

I'm not a peer reviewer, you idiots! Provider relations issues move UP the chain of command (to me)...not down

So, who is in charge of destroying the Holiday Inn...you or the peer reviewer?

 

[erg923]

So, who is in charge of destroying the Holiday Inn...you or the peer reviewer?

Bugger off and make me a tuna sandwich! That was either Moon or Hendrix? Not sure. Either way...sad ending, ya know....

 

[Sanman]

Bugger off and make me a tuna sandwich! That was either Moon or Hendrix? Not sure. Either way...sad ending, ya know....

Holiday Inn in Flint Michigan was where Moon spent his 21st birthday and supposedly drove a Lincoln into the hotel pool, among other things. Not sure about the tuna sandwiches, doesn't seem very rock n roll. Legendary, but a very sad ending.

 

[erg923]

Holiday Inn in Flint Michigan was where Moon spent his 21st birthday and supposedly drove a Lincoln into the hotel pool, among other things. Not sure about the tuna sandwiches, doesn't seem very rock n roll. Legendary, but a very sad ending.

I'm aware.

Just meant that those were the...."last words." Think it was Hendrix, actually?

Not that I would ever say such nastiness to my wife of course, but you have to admit that such anti-climatic "last words" is.... EPIC!

This should probably have been via DM now that I am thinking about it...

 

[Sanman]

I'm aware.

Just meant that those were the...."last words." Think it was Hendrix, actually?

Not that I would ever say such nastiness to my wife of course, but you have to admit that such anti-climatic "last words" is.... EPIC!

Ah, gotcha. It certainly beats the way Elvis died.

 

[erg923]

Ah, gotcha. It certainly beats the way Elvis died.

"Good career move"

-Michael O'Donoghue

 

[foreverbull]

This thread reminds me, yet again, why I do not take insurance. My practice is already bursting at the seams; I cannot imagine what it would be like to be on an insurance panel or two and have to deal with that demand and headache.

Interestingly, in the last couple years I have had an increasing number of calls from insurance companies asking me to join their network. I never bother to return the call. Seems like the tide (in my area anyway) is shifting.

I remember the days when folks were scrambling to join panels in a Darwinian-like attempt to survive and an attitude of doom and gloom hovered like a dark cloud over the practice of psychology. I still chuckle nowadays when I encounter a fellow psychologist who says, “there’s no way to make it in private practice without taking insurance.”

I will say, the community in which you work will affect how many clients can afford to pay your fees. Some cash pay only clinicians will offer a sliding scale if the community is middle class or partially lower middle class. My community is solidly middle and not all can afford to pay out of pocket, especially when they already have insurance. This whole out of network thing is really unfair to clients (almost no insurance plans will reimburse in my area for out of network clinicians except for the Cadillac plans that are very expensive). I wish all insurance companies would reimburse for out of network clinicians.

I’ve also had insurance companies reach out and offer to contract with local psychologists and offer terms like $60-$75 per session to handle their overflow. Only paying half a clinician’s normal rate or less is not even trying to meet the market rate.

 

[Sanman]

I will say, the community in which you work will affect how many clients can afford to pay your fees. Some cash pay only clinicians will offer a sliding scale if the community is middle class or partially lower middle class. My community is solidly middle and not all can afford to pay out of pocket, especially when they already have insurance. This whole out of network thing is really unfair to clients (almost no insurance plans will reimburse in my area for out of network clinicians except for the Cadillac plans that are very expensive). I wish all insurance companies would reimburse for out of network clinicians.

I’ve also had insurance companies reach out and offer to contract with local psychologists and offer terms like $60-$75 per session to handle their overflow. Only paying half a clinician’s normal rate or less is not even trying to meet the market rate.

The problem that you have is that treatment by psychologist and increasingly a physician (rather than an NP or PA) is becoming the definition of Cadillac care in this country. All that having expensive PsyD programs expand does is perpetuate the difference as those with student loan debt cannot afford to accept cut rates. That is a large part of the reason why I am a proponent of LCSW training for those that want to be an outpatient therapist. Take your low cost training, accept your $75 insurance session fee and you have a viable practice model. Meanwhile, both medicine and psychology push students to specialize in order to differentiate and the remainder of generalists will fight for the 20% of the population that can afford the cash payments.

 

[WisNeuro]

The problem that you have is that treatment by psychologist and increasingly a physician (rather than an NP or PA) is becoming the definition of Cadillac care in this country. All that having expensive PsyD programs expand does is perpetuate the difference as those with student loan debt cannot afford to accept cut rates. That is a large part of the reason why I am a proponent of LCSW training for those that want to be an outpatient therapist. Take your low cost training, accept your $75 insurance session fee and you have a viable practice model. Meanwhile, both medicine and psychology push students to specialize in order to differentiate and the remainder of generalists will fight for the 20% of the population that can afford the cash payments.

I dunno about that, there is one large shady practice in town here that offers a junk contract, about 90% of their psychologists are from the recently closed diploma mill. I'd say that they cannot afford to accept those rates, but they are largely not competitive for good jobs, so they accept what they can in many areas.

 

[Sanman]

I dunno about that, there is one large shady practice in town here that offers a junk contract, about 90% of their psychologists are from the recently closed diploma mill. I'd say that they cannot afford to accept those rates, but they are largely not competitive for good jobs, so they accept what they can in many areas.

I am sure that some will accept it out of necessity because everyone needs to eat. However, given the costs of education I usually see two paths:

1. If you want to work with lower SES folks, find a job that qualifies you for pslf and do that for likely a low income

2. Head to the city or upper middle class suburbs and join practices with the goal of seeing higher paying clients. Some end up in larger groups that take some insurances.

I don't see a lot of them trying to take insurance from the outset with the goal of helping those that are of lesser means, rather being a victim of the market and working at more of a master's level. Thus, if the goal is to increase MH access to those of lesser means, which is what @foreverbull seems to be interested in, I don't think more PsyD grads are the way to get there. I also don't see rates increasing for psychotherapy regardless which way the insurance system goes public or private.

 

[PsyDr]

Is it common for providers to turn down signing an insurance contract once they read the fine print and reimbursement rates? It seems you are flying blind until you receive the actual contract.

That really depends on your position in negotiations. Got assets? Got a team that can pre auth everything out of network? Got a niche that no one else has? Then yeah, you can pick and choose what you take. Otherwise...