5 Mistakes To Avoid When Starting Out In Private Practice

Many mental health practitioners think long and hard before making the decision to go into private practice. And we can see why: although you can work when you want, and won’t get bogged down in workplace politics, growing a business can be challenging and stressful.

However, the benefits of autonomy and creating your own opportunities are still highly appealing to therapists who are independent and excited about new possibilities. Getting started on the right foot is key for your future success. 

Here are five mistakes and solutions to some common private practice problems that we see new therapists are making.

Running a private practice is about more than being amazing at clinical work. It’s learning about everything from managing finances, facilities management, managing your own staff, and for many: medical billing and dealing with insurance companies. Most of these skills aren’t learned in school – and we see a lot of therapists struggling once they open the doors and realize there’s so much they don’t know. 

Many clients hire us after underestimating how quickly the medical billing gets complex, confusing and time consuming. That’s why putting in the hours up front to figure out what you can manage on your own and where you need help is key when establishing your practice. 

Contracting with an insurance company is a big decision, but when you own your own practice, you have choices. Unfortunately, many therapists who are just starting out think it’s all or none; they go on a contracting spree, accepting contracts from any company that will accept their application. 

We recommend that our clients treat contracting strategically. We steer them towards companies that pay well and are less onerous to work with.

When you’re running your own practice, deciding how much to pay yourself can feel daunting. That’s why estimating your revenue, calculating expenses, and adjusting your budget accordingly can make a huge difference. When you know how much you’re making, you can figure out how much you can afford to take home.

Success in private practice hinges in part on seeing enough patients to meet your financial needs. Where will your patients come from?

If you leave a group practice or an agency, will your patients come with you, or will you be starting from zero? For insurance companies you contract with, will a listing in their insurance directory be enough? If not, how will you supplement? Whether you go to local events, ask your network for referrals, maintain a listing on other directories like Psychology Today, or try other marketing initiatives, it’s important to develop a plan. How will you make a name for yourself?

Professional relationships are all about setting expectations. Establishing your practice policies up front is the easiest way to clearly communicate with patients about your expectations and their responsibilities.

Answering these questions are a good starting point:

• At what point in the process will I take payment?
• Will I accept credit cards?
• When do I send bills?
• What’s my cancellation policy?
• How do I communicate financial responsibilities and explain co pays?

You can tweak your processes throughout the life of your practice, but not planning your policies before you open your doors could have a negative impact on your cash flow and ability to stay operational. You don’t want to wait until you’re out of cash and have $20,000 that you don’t know how to collect to realize patients aren’t paying you because you’ve never made it clear as to when and how you expect them to.

A successful practice will look different for every provider. If your goal is increased flexibility, owning your own business can help you achieve that. But if you don’t invest the time in addressing potential missteps early on, you could end up stuck in the weeds.

At MindEase Billing, we love helping health therapists who want to hang out their shingle achieve success by starting their practice off on the right foot with efficient, effective medical billing that helps them make a great living doing something they love. Book a discovery call if you need help establishing your practice, or if you’d like to see how we can take over from a billing situation riddled with missteps.

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