Starting a private practice as a psychiatrist or mental health nurse practitioner can be exciting but requires a plan to ensure legal compliance, financial sustainability, and clinical success. Here’s a step-by-step process:
Step 1: Legal and Business Foundations
- Choose a Business Structure
- LLC, PLLC, S-Corp, or Sole Proprietorship.
- LLCs are often preferred for a psychiatrist or mental health nurse practitioner for liability protection and simplicity.
- You’ll need to register your business with your Secretary of State. In Oregon start here: https://sos.oregon.gov/business/Pages/register.aspx
- Get an EIN (Employer Identification Number)
- You can apply for this online through the IRS. You need a tax ID number (TIN) to get paid by insurance companies. We recommend using an EIN rather than your personal social security number.
- You’ll use the same TIN for taxes and opening a business bank account. Having an EIN allows you to also pay employees.
- Business License
- Some local jurisdictions in your state may require a business license—check with your city or county.
- Malpractice Insurance
- Ensure your insurance covers private practice general liability, telehealth, and HIPAA breaches.
- You can find coverage from specialized brokers as well as from your professional organization.
- NPI Number
- You’ll need a National Provider Identifier for billing and claims. Apply for one here: https://nppes.cms.hhs.gov/webhelp/nppeshelp/MAIN%20PAGE.html
- If you have one already, keep it up to date with current address, etc. See how you’re listed in the lookup tool: https://npiregistry.cms.hhs.gov/search
Step 2: Office and Operations
- Physical Location or Telehealth Only?
- If you plan to offer in-person services, secure an office that complies with HIPAA.
- For telehealth, you’ll need HIPAA-compliant software (e.g., SimplePractice, TherapyNotes, or Doxy.me).
- Business Bank Account & Accounting Software
- Keep business finances separate from your personal stuff. Consider accounting tools like QuickBooks or Wave.
- Electronic Health Record (EHR) System
- An EHR for psychiatrists or mental health nurse practitioners like TherapyNotes or Charm HER that helps with scheduling, notes, and billing.
- Insurance Billing
- If you plan to bill insurance, decide whether you’ll do it yourself or outsource it. Read our In-House vs. Outsourced Billing Guide to help you with that.
Step 3: Contracting with Insurance
- Contracting
- This can take about 3 months, so start early. You can work with a credentialing service to manage this process.
- Medicaid and Medicare Enrollment
- Consider enrolling as a Medicaid and/or Medicare provider if you plan to serve these populations.
- Commercial Payers
- We recommend picking 2-4 well-paying companies that aren’t too much of a hassle to deal with when claim processing goes sideways. You may also want to consider a payer’s market share because that can dictate how large the pool of potentials clients may be. In Oregon the plans we recommend are:
- PacificSource
- Kaiser and/or Kaiser PAR
- Blue Cross Blue Shield of Oregon (Regence)
- First Choice Health
- Moda
- Aetna
- We recommend picking 2-4 well-paying companies that aren’t too much of a hassle to deal with when claim processing goes sideways. You may also want to consider a payer’s market share because that can dictate how large the pool of potentials clients may be. In Oregon the plans we recommend are:
- Out Of Network (OON)
- For payers you don’t contract with, you’ll be OON. You can offer to provide a superbill so clients can try for reimbursements if you don’t want to submit claims.
Step 4: Compliance with State and Federal Regulations
- HIPAA Compliance: Find training to ensure your practice protects patient information.
- Consent Forms: Create intake and consent forms tailored to Federal and state laws. Your HER may have templates.
- Continuing Education: Stay updated with your CE requirements to maintain your license.
Step 5: Marketing and Client Acquisition
- Website and Online Presence
- Build a professional website with clear service offerings and booking options.
- Register with Google My Business for local search visibility.
- Referral Networks
- Build connections with primary care providers, therapists, and community organizations for referrals.
- Connect with other local practitioners and attend networking events.
- Directories
- List your practice on platforms like Psychology Today, TherapyDen, or ZenCare to reach potential clients.
- Ensure your listing is accurate on insurance directories for payers with which you’re contracted.
Step 6: Self-Care and Work-Life Balance
Running a private practice has many rewards but also has its challenges. Be intentional and proactive about setting boundaries to avoid burnout.
Step 7: Financial Management and Growth
- Review Your Fees
- Raise your rates as you gain experience and/or become more specialized.
- Monitor payer fee schedules to make sure you’re not “leaving money on the table.”
- Read our blog called How to Take Home Six-Figures in Private Practice.
- Plan for Taxes and Savings
- Set aside money for taxes and consider working with a CPA.
- Review financial statements to monitor revenue and expenses.
- Scaling and Expansion
- As demand grows, consider hiring additional practitioners or support staff.
- Consider Outsourcing
- Don’t get bogged down in the parts of your private practice that someone else can do better and more effectively – like the billing.
At MindEase Billing – a medical billing service in Oregon – we welcome psychiatrists and mental health nurse practitioners in solo private practice. To learn more about us, check out our Services Page. If you’re ready to request a Discovery Call to see if we’d be a good fit, hit the button below.[/vc_column_text][/vc_column][/vc_row]