New CPT Codes for Mental Health Services

For those who do their own billing: make sure you've updated your CPT codes to reflect the changes that became effective 1/1/13.

CPT stands for "Current Procedural Terminology." The American Medical Association establishes a code (a number) for each service or procedure a medical provider may perform, including mental health services. From time to time, things are added and removed from the list, and procedures are reorganized based on current practice.

The codes for psychotherapy services have been changed starting this year. The biggest change is that, instead of separate codes for each duration of standard and "interactive" psychotherapy, "interactive complexity" has been added as a separate code to be billed in addition to the standard psychotherapy code when applicable. Therapy is considered "interactive" when it is conducted with non-verbal clients.

Here are the update CPT codes applicable to psychotherapy:

90791     Psychiatric Diagnostic Evaluation (by non-prescribing professionals)
90837     Psychotherapy, 60 minutes (client or family member)
90834     Psychotherapy, 45 minutes (client or family member)
90832     Psychotherapy, 30 minutes (client or family member)
90839     Psychotherapy for Crisis, first 60 minutes
90840     Psychotherapy for Crisis, each additional 30 minutes
90846     Family Psychotherapy (without client)
90847     Family Psychotherapy (with client)
90853     Group Therapy
90785     Interactive Complexity

Private Practice: Tax Deductions

Obviously, an added complication of private practice is sorting out the tax issues involved. I am no expert, here, and am just beginning to get an idea of everything involved, but I thought I'd start to share what I'm learning. First off: tax deductions.

Tax deductions are expenses the government allows to be deducted (subtracted) from the amount of annual income on which you are required to pay taxes. The more you are able to deduct, the less you pay in taxes. When it comes to business expenses, the theory is that you do not pay income tax on the amount of "income" that is really just recouping money spent to make the income. So if I have to spend $5 to make $100, only $95 is "real" taxable income.

So, what expenses are tax deductible? In general, any expense that is considered "ordinary and necessary" to running a business - ordinary meaning that professionals in general would agree that it is a relevant business expense, and necessary meaning that it furthers business objectives. Note that expenses to start (rather than run) a business are considered capital expenditures, and not deductible as business expenses. 

Examples of deductible expenses are advertising, office expenses, supplies, and utilities, insurance, legal/professional services, and rent. Examples of nondeductible expenses are professional examination fees, commuting expenses, fines/penalties, and personal expenses.

When something is used for both business and personal purposes (e.g., your cell phone), the expenses has to be split (“allocated”) between personal and business on a reasonable and consistent basis. Obviously, you can only deduct the business portion as a business expense. 

A special case is the home office. The IRS is pretty stringent in its requirements for a home office. Basically, for a therapist to claim a home office s/he would have to see clients there, use the space exclusively for business, and as the primary place of business. Unless you see your clients in a dedicated office attached to your home, you won't be able to claim a home office. 

To substantiate deductions, you also need to have receipts or cancelled checks to show that the expense was actually paid, within the relevant tax year. It's important to keep good records for expenses, in addition to client records!

I'm hoping people will leave comments with their own knowledge of deductible and nondeductible expenses and how you handle taxes in private practice!

Private Practice: Business Formats

Before my foray into private practice, I had only the vaguest sense that there were multiple structures a business could have. However, one of the things practitioners have to decide when they open a practice is how they want to set up their business as a legal and tax-paying entity. It turns out there are several options, and they can seem a bit confusing to those of us without a business background.

The simplest and easiest type of business for a private practitioner is a sole proprietorship. In fact, you don't even have to file any legal paperwork to establish a sole proprietorship unless the business will operate under its own name rather than yours. There are no ongoing fees to maintain this kind of business, and taxes are relatively straight-forward, since business income is reported on the owner's personal tax return. (This is supposedly beneficial, since otherwise profits would be taxed twice: once as the business's income, and once as income paid to the owner by the business. However, you do also have to remember to pay Social Security and Medicare taxes on your business income).

The downside is that the owner becomes personally liable for business debt (e.g., if you fail to pay bills, collectors can go after your personal accounts and assets). There can also only ever be one owner; adding additional owners would lead to a change in business structure.

If you have or add another owner to the business, whether that person is a spouse/family member or another provider, the next simplest business structure is a partnership. General partnerships are established via a formal or informal partnership agreement. This agreement specifies division of contributions, responsibilities, profits and losses. There are no requirements for this division, as long as their is a business rationale. Each partner reports their share of profits and losses on their personal income taxes - the business is not a separate tax entity. Each partner also retains personal liability for business debts; in fact, creditors can hold a single partner (or each partner) liable for the entirety of the debt.

(There is also something called a limited partnership; however, I don't think that a private practice would ever function as a limited partnership. Limited partnerships have two kinds of partners: general partners who operate the business and are liable for its losses, and limited partners whose only role is to contribute capital and determine who will run the business. Limited partners share in profits, but are only liable for losses to the extent of their contributions. There is more legal paperwork required for this type of partnership).

Some clinicians opt for another form of business: a limited liability company (LLC). LLCs are a hybrid of a partnership and a corporation: like a partnership, the LLC does not pay separate income taxes, and like a corporation, owners are not personally liable for business debt/losses. However, there are significantly more administrative requirements and costs for an LLC compared to a sole proprietorship or partnership. Paperwork has to be filed with the State, and some States may not allow LLCs with only one owner. I live in Massachusetts, and it seems like a single owner is permissible here. However, a form has to be filed with the state at start-up and annually thereafter, with a cost of $500 each time.

It's also important to know that "limited liability" means that no one can come after your personal assets due to business debts...BUT malpractice suits are not business debts. Some practitioners decide on this business structure thinking it will protect their personal assets in case of such a suit. However, both the business and the practitioner as an individual would be named in any suit, and laws governing LLCs specify that liability is not limited in the case of unethical conduct. Given that there is relatively low overhead for a therapy practice, and one would therefore assume limited potential for unpaid debts to add up, limited liability does not seem like a sufficient reason to choose an LLC, at least from my perspective!

Corporations get even more complicated. To form a corporation, articles of incorporation have to be filed with the State (along with money, of course). Corporations have shareholders, directors and officers. There have to be annual meetings, stock certificates to share holders, meeting minutes, and elections. The corporation has to have its own bank accounts and pays separate taxes (meaning income is taxed twice, because each individual's income from the business is also included on personal tax returns. Some earnings can be maintained by the corporation for future expenses and not paid to owners/employees, hwoever, and that income would only be taxed once). The only real benefit beyond the limited liability (which is the same as an LLC) is that corporations can provide fully-deductible fringe benefits (e.g., health insurance, pensions, etc.)

Some alternatives exist to the standard corporation. Close corporations are simplified versions of a corporation for small businesses, and differ State to State. S corporations are also somewhat simpler in that there can be only one owner, and income passes through to the shareholder(s) rather than being taxed separately (and therefore twice). However, fringe benefits may be taxable, there are limits on the maximum number of shareholders, and differences in how capital gains are handled. All of this seems pretty complicated, and unnecessary for a private practice...but that's just my opinion.

I think the sole proprietorship and partnership models seem best suited for private therapy practices. These models also have the advantage that they are easy to dissolve, and practitioners can decide to opt for a more complex structure instead if that makes sense some time in the future. However, I am very much a novice when it comes to this business stuff, so I'd love to hear from others on how you have (or would) set up your business!

Private Practice: Security of Records

If you plan to do any electronic transmission of client records (e.g., submitting insurance claims electronically), you have to comply with HIPAA standards to maintain the security of client records. Even if you don't plan to transmit records electronically, it's still a good idea to take security precautions with client records.

Client records fall into two categories: hard-copy paper records, and electronic records. Paper records should be double locked, meaning they should be kept in a locking file box or cabinet in a locked office (or home). Most filing cabinets have locks - you just need to use them! If you move records between locations, or don't have enough to warrant a filing cabinet, you can get a file box like this one. I like that it has combinations (rather than a key that could get lost). It's a bit heavy, but that is probably a good sign when it comes to security - reinforced edges and walls mean that it would be hard to break open by sheer force.

When it comes to electronic records, at minimum they need to be kept in a password-protected file. It is better to encrypt them. Any mobile platforms (e.g., a USB flashdrive) should be encrypted, and so should emails that contain protected health information. I found a free program that is actually pretty user friendly that allows me to create encrypted drives on my computer, encrypt mobile technology, and send encrypted email. It's called Cypherix LE.

Of course, if you use electronic medical records software, it probably has encryption built into it - but that's a feature to find out about if you're considering and comparing software.

Does anyone know of other useful security products or features? Or security considerations I'm not thinking of?

Private Practice Billing: Anatomy of an Insurance Claim

As I said in an earlier post, billing is a crucial factor in the viability of private practice. In order to be reimbursed by health insurance companies, you have to submit the standardized CMS-1500 form.

To complete the form, you need the following information: The client's name, date of birth, address, phone, marital and employment status, insurance policy number, name and address of the primary insured (if other than the client), as well as the client's relationship to the insured, the employer or school through which the insurance is provided, statement that the client has signed an authorization for the provider to provide medical information to the insurance company and receive payment of medical benefits, a beginning date for the current "illness," ICD-9 diagnosis code(s), prior authorization number (if applicable), date(s) of service (for outpatient therapy, the beginning and end date are the same), place of service code (11 is the designation for an outpatient office), procedure code (see my previous post for common codes), a diagnosis pointer (the number of the line on which the ICD-9 code for which treatment was provided), charges, number of units (a session would be 1), provider's NPI, tax ID, practice and billing address(es), and whether you "accept assignment" (will accept adjustment of the charges without billing the client for the difference - typically, if you have a contract with an insurance company, you have to agree to this provision).

Once you have the information, one option is to submit a hard copy of claims to an address provided by the insurance company, printed on the special paper form with red lines (yes, it has to be on this kind of paper, so you either need a fancy computer program that prints it in red and black following government specifications, and plenty of red ink, or to buy the paper).

Another option is to submit the form electronically. While electronic submission requires more effort to set up initially, it streamlines the process for subsequent submissions. It also has a faster turn-around time, which means you get paid faster. Because of HIPAA requirements for the security of electronic submissions, all claims submitted electronically have to be formatted/encrypted as EDI 837 documents (you may see this number with a letter suffix: 837p is the version for providers, and 837i is the version for institutions). There are several ways to accomplish this:

(1) A few health insurance companies have a system set up via their own website provider portal for claim submission

(2) You can use a billing clearinghouse that takes the non-EDI format claim you submit to the clearinghouse, transfers it to the prope 837 format, and sends it on to the insurance company. Clearinghouses may cost 6%-8% per claim, however.

(3) You may already be using practice management software or an electronic health record platform of some kind. If you are, or plan to use this kind of software, it probably has the capacity to generate claims in the approved format. If the software is web-based, you can probably establish EDI communication with the health insurance companies you work with, through which the claim can be submitted.

Most of these kinds of software platforms have some sort of subscription costs. The more elaborate it is - the more it resembles a medical record rather than a billing program - the higher the cost may be. For the frugal-minded, like myself, there are options, however. For a full electronic medical record, the cheapest option seems to be Care Paths (www.carepaths.com), at about $30 per month. I looked into that option and it seems like a decent system that could be customized to meet the needs of the private practitioner.

However, my practice is small and, as I said, I'm...frugal...so I went with another option: Office Ally (www.officeally.com) offers FREE software, including a bare-bones claim submission platform (Office Ally), but also a more elaborate practice management software platform (Practice Mate), where you can input each of your clients, create visit templates, which automatically fill out all of the key information that stays the same week to week, edit for the given appointment, record copays, issue receipts, and generate claim forms easily and quickly. Office Ally also walks you through the process of setting up EDI communication between Office Ally and each of your payers, allowing you to submit claims and get replies electronically.

Let me know if you are aware of other reasonably priced services, and/or what your billing practices and experiences have been!

Private Practice: Billing Terminology

You've set up your office, finalized insurance contracts, and marketed your practice. You've scheduled appointments, and seen your first clients. The hard part is done, right? Smooth sailing?

Not quite. Now you have to actually get paid for the services you are providing. That's pretty easy if your clients are self-pay...but many (perhaps most) people want to use insurance if at all possible.

I thought billing an insurance company would be relatively straight-forward: enter some information on the insurer's secure website, or perhaps fill out and send in a form I could download. Nope. It turns out to be quite a bit more complicated than that.

In order to understand billing, you first have to familiarize yourself with key terms and abbreviations. You have to know these terms to even begin to sort out the billing process (which I'll write about it a future post).

1) Information about the Provider
To begin with, you need to know your NPI number (might as well memorize it, really, you'll be using it so often!), and your tax ID number - that is either your personal social security number, or a special tax ID provided if you registered yourself as a company or business (in which case it would be called an EIN - Employer Identification Number). If you are asked to select between S or E, it's asking whether your tax ID number is a "social" or "employer" number.

2) Information about the Client
You will need to know the client's insurance policy member identification number and date of birth. For medicaid products, you may hear the member number referred to as the RID - short for medicaid recipient identification number. You may also need their social security number, address, phone number, and employer. If the insurance policy is in someone else's name (e.g., a parent or spouse) - referred to as the policy holder, or perhaps the guarantor - you will need that person's name, date of birth, and possibly social security number.

3) Information about the Service Provided
You will need to provide the client's diagnosis, with associated ICD code (International Classification of Disease). Yes, just when you thought you had the DSM down, they want you to use a different system. Thankfully, many of the codes in ICD-9 are very similar to their DSM-IV-TR counterparts. I don't know, however, how things will change with ICD-10, which will be required within the next 2 years, and expands the possible length of each code to a maximum of 7 digits. Bear in mind that the diagnosis code determines whether the client is eligible for parity.

You also have to provide a code indicating what procedure (service) you provided. These are called CPT (Current Procedural Terminology) codes, established by the American Medical Association. The insurance company likely provided a list of relevant CPT codes in your contract, specifying the reimbursement rate for each. Ones you should know include:

90801 - Diagnostic Interview Evaluation (i.e., assessment)
90804 - Individual Therapy, 20-30 minutes
90806 - Individual Therapy, 45-50 minutes
90853 - Group Therapy
90847 - Family Therapy, with Patient Present

Note that there are separate codes (not listed here) for therapy including medication management (for prescribing professionals), and codes designated "interactive therapy" - the latter refers only to therapy that is non-verbal, and relies on assistive additions, such as an interpreter or technology for non-verbal communication. Play therapy does not qualify (it is partially verbal).

4) Standardized Billing Formats
All of this information must be encapsulated into a standardized form, to comply with Federal regulations (HIPAA). It seems that specific standards were developed for Medicaid and Medicare, and private insurance companies have decided to apply these standards across the board (I suppose it simplifies things somewhat to use one standard, rather than trying to keep track of different rules for each insurance company).

Paper billing must be done on specific forms called CMS-1500 forms. CMS stands for Centers for Medicare and Medicaid Services. This government agency was previously known as the Health Care Financing Administration (HCFA), and thus the forms were HCFA-1500 forms. The version of the form does change over time, and the current version is 5010. Be sure you are using the right form. Furthermore, the grid lines on the form are red - and must be red for it to be submissible. That means you either need to purchase official forms, or use a computer program and printer that will print it with red lines. Also keep track of your insurance company contracts for any other requirements; for example, one company with whom I contract requires the form be typed (either via a computer program designed for the form, or via typewriter!), in all capitals.

If you want to submit claims electronically, you will need to set up EDI - Electronic Data Interchange - with the insurance companies, to ensure that protected health information is being submitted securely. You will either need access to a secure FTP program (File Transfer Protocol), or use a service of some kind (a topic for the next post on the subject). The CMS-1500 form is still used, but this time an electronic version that has been encrypted in a standard way (referred to as EDI 837, with suffix p for individual providers and i for institutions). If you want electronic notification of the insurance company's response to the claim, you want electronic remittance advice (ERA), which has a formatting designation EDI 835.

That sounds complicated - but it isn't as hard as it sounds, and you don't have to pay for a billing service. More to come on that. Why would you want to learn it? Insurance companies say that it is faster (2 weeks versus 45 days), and has a higher approval rate due to fewer user errors (since omissions and typos may be caught by whatever program you are using).

Please leave comments with any billing tips you have, and any terms I've missed!

How to Establish a Private Practice: Marketing, Part 2

In my previous post on marketing, I talked about connecting with "gatekeepers" to obtain referrals - in other words, marketing yourself to providers potential clients are already seeing, such as their Primary Care Provider. While this is an important aspect of a private practice marketing plan, it's not sufficient by itself.

These days, more and more people go to the internet as their starting point when they want to find...well, anything, really. When people have physical symptoms, they often check WebMD before they think about calling their own doctor. Similarly, when people begin to have psychological symptoms, they often go online before they talk to anyone about it. In fact, people may be even more likely to use the internet for mental health problems, given the stigma and embarrassment that may arise from talking more openly about these difficulties.

Thus, while a potential client may not plan to see his or her PCP for another several months, he or she may decide to see a therapist sooner, based on information gathered online. Where do these potential clients find a therapist? Some may get a recommendation from family or friends, but many will look (you guessed it) online.

The bottom line: To market your practice, people should be able to find you online.

There are a number of ways to build an online presence:

1) Social Media: Make use of the network you already have by publishing information about your practice on social networking sites. If you haven't signed up for LinkedIn, do so. It is a way to connect with other professionals, direct people to your website and/or blog, and your public profile is a way for potential clients to learn about you. Also create a facebook page for your business - and don't forget to "like" it as yourself so all your facebook contacts find out about it!

2) Get your own website. These days it's both easy and inexpensive to get a website, and you don't have to be a computer whiz. Weebly.com offers free, user-friendly website design. For a small fee, it will also register and host a domain name for you (about $4.00/mo). However, you can shop around and get a cheaper rate for domain registration and hosting, and publish your Weebly site on your domain (Weebly even provides instructions). I paid $2.17 for a full year for my domain (www.nataliehill.info). What should your website include? Who you are, what you offer, financial information (insurance, fees, etc), location, directions, availability, contact information, and a photo if you're comfortable with that (some potential clients may feel more comfortable calling if they are able to put a face with a name).

3) Sign up for an online therapist directory. The most reputable one is by Psychology Today, but there are other directories as well. These have a higher monthly fee ($30 for PT), but even one referral from them covers the subscription cost for a full year after attending only 5 sessions. I joined PT a month ago, and have two clients through this resource already!

4) Blog. A blog can be integrated into your website, and has several benefits. It allows potential clients to learn a bit about your approach (note that this blog is not attached to my website, since its audience is therapists, not clients), it increases search traffic to your website, and exponentially expands the number of pages on that site (since each post has its own URL). Why is that good? For reasons beyond the scope of this post, it may increase your search page ranking (how close to the top you appear in the results of someone's search), particularly if other people link to it. Even better if you then comment on other people's blog posts, with links back to your blog.

The bottom line: however you do it, get the information on-line, where people can find it!

Goodness of Fit in Therapy

The Ecological Theory of human behavior in the social environment suggests that how well someone functions in life is the direct result of the "goodness of fit" between the person and their environment. So, for example, how well a student learns is heavily influenced by the degree of fit between the teacher's teaching style and temperament, and the student's learning style and temperament. Similarly, two children with different temperaments may respond very differently to the same parenting; for example, what one experiences as playful roughhousing the other may experience as overwhelming or threatening.

Goodness of Fit is also a factor in the therapeutic relationship. Different clients respond differently to different therapists' styles, manners of interacting, and intervention approaches. When the fit is good, outcomes may be better than when the fit is less good. It's also likely to be more satisfying for both client and therapist. In contrast, if it's a bad fit, the client is more likely to be guarded, defensive or resistance, and the therapist may be less likely to be empathic and patient. As a result, the process is less likely to be therapeutic, and may even be counter-therapeutic.

Working in agency settings, at least in the settings where I've worked, "fit" is rarely a consideration - or at least, not a deciding factor. The decision tends to be more about numbers - what clinician(s) have room in their schedule or a smaller caseload. Sure, if multiple clinicians are available, the person assigning cases may consider who may be a better fit. However, once the assignment is made (i.e., by the time the clinician and client meet for the first time), it's usually a "done deal" - clients and therapists are typically discouraged from requesting reassignment.

Private practice is a totally different ballgame. Both clients and clinicians have a lot more choices, and the ability to "shop around" for the right "fit." Granted, clinicians don't necessarily want to be too picky, especially starting out, and clients may also find the process of trying out various therapists (and repeating the intake process over and over) becomes onerous if they are too picky. Nevertheless, both have significantly more control over whom they see.

So, what makes for a good "fit" in therapy?

From the perspective of the client, trying to choose the right therapist, you should:

1) Feel comfortable enough to be open about what you're experiencing...without expecting that you'll feel totally comfortable. This is a stranger, after all, with whom you're sharing very personal information. If you expect total comfort from the beginning, you will discount providers who could actually be a really good fit for you. You want someone who challenges you in some way - that's what produces change. It should feel different than talking to a friend.

It's also common to experience whatever relationship issues you may have in life getting played out in relationships with therapists - this is actually good and productive, and helps resolve those issues if you can stick it out. Deciding that it's a sign the therapist isn't a good fit just means that you're putting off an issue that is likely to come up again with the next therapist.

2) Feel like the therapist can help you (i.e., they know something about what you're dealing with), and find their approach acceptable. You don't have to totally understand or believe in all aspects of someone's approach, but if you're operating from totally different worldviews, that can be an obstacle.

3) Consider the logistics - does the therapist's availability work for you? Does the location make sense for you? Is the therapist's financial policy acceptable to you (for example, whether they will go through your insurance, what your copayment or fee is), and do you understand no-show or cancellation policies? If these logistics aren't acceptable to you, they are bound to become barriers in treatment.

From the perspective of the therapist, the consideration of fit has to consider:

1) Our ethical obligation to clients. Specifically:Do you feel you can competently treat this client? Do you have knowledge and expertise with the client's presenting problem? And, although this piece is rarely acknowledged, do you feel able to empathize with the client? If you can't establish empathy, the treatment is not going to work, and while we probably all pride ourselves on our empathy, sometimes there really just is a bad fit, and our own "stuff" gets in the way. Our responsibility, when we don't have the expertise, or empathy for a particular client, is to make a referral to another professional who might be a better fit.

2) Workload balance. Our practice is only likely to feel manageable if we maintain some balance in the work we take on. If we already have several high risk clients, it may not be feasible to take another one. Similarly, there may be a limit to the number of clients with personality disorders we can manage, or the number of cases with a lot of collateral involvement, etc. We have to recognize and listen to our own limits.

3) Logistics: Like the client, we have to consider our schedule and availability (whether we are able to take a client during the time(s) the client is available), and financial agreement (whether we can take the client's insurance, for example).

There may be other considerations on either side. How do you think about finding the right fit between therapist and client?

How to Establish a Private Practice, Part 4: The Fine Print

As you probably know from your work experience, and coursework on ethical and legal requirements, therapists must provide specific information to potential clients and obtain the client's "informed consent" before initiating treatment. That means that clinicians starting a private practice have to have the necessary documents ready when their first client walks through the door.

What do you need?

1) Statement of Client Rights and Responsibilities

This statement should be available to the client to keep for reference, and you should also keep either a signed version, or an acknowledgment that they have received it.

Rights involve all the legal and ethical rights afforded clients, such as the right to participate in treatment planning, decline specific treatments or interventions, not face discrimination, privacy, confidentiality, and to file a grievance. Responsibilities can include maintaining behavioral control, providing accurate information, respecting the privacy and rights of others, participating in treatment, and/or stating whether or not they are willing to adhere to elements of their treatment plan.

2) Consent for Treatment

Clients demonstrate informed consent by signing this document. Therefore, it must contain several specific elements:

a) An explicit statement that the client consents to receive evaluation and/or treatment from you (or a particular clinician, practice, or agency), understands the potential risks and benefits, and that treatment can be discontinued at any time by either party.

b) A statement of the risks and benefits of therapy

c) Information on the Limits of Confidentiality

d) After-hours or emergency coverage policy

e) Clinician's credentials and contact information

The consent for should be signed and dated by the client, and witnessed by you or another staff person, e.g. if you happen to have a receptionist.

3) Notice of Privacy Practices (or Policies)

This has to be pretty specific to comply with HIPAA guidelines. The American Counseling Association has published guidelines (for the Notice of Privacy Practices, as well as Informed Consent, actually) that clarify what you should say. Feel free to take a look at mine, in the "Introductory Client Packet" on my website. Include signature lines for the client and witness to sign and date that s/he has received a copy of this information.

4) Financial Agreement

Technically part of informed consent, the financial agreement details your fee, whether you will work with the client's insurance company, when payment is due, fees for missed appointments and returned checks, collections, etc. The client, or whoever is financially responsible, should sign it.

5) Additional Authorizations

If you do plan to accept insurance, the client will need to sign something that authorizes you to file claims and receive payment on his/her behalf. If you may be reimbursed by workman's compensation, a similar authorization will need to be signed. Finally, parents/guardians will need to authorize the evaluation and/or treatment of any minor child.

6) Authorization to Release or Request Protected Health Information

Complementing the statement of confidentiality, and privacy policy, you should have a form that follows HIPAA guidelines for clients to sign to authorize you to contact other treatment providers. Many health insurers routinely expect that therapists have contact with clients' Primary Care Physicians, and psychopharmacoloists, if applicable. Get in the habit of asking for these releases up front.

Finally, many clinicians ask clients to fill out a registration or "face sheet" with contact information, insurance information, etc. Questionnaires about presenting problem(s), and/or standardized measures may also be given to clients to complete. This part is up to you, and based on clinical rather than legal/ethical grounds.

Am I forgetting anything? If so, please let me know!

How to Establish a Private Practice: Marketing, Part 1

Now, I'm the very last person who would claim to be an expert when it comes to marketing. Thus far, my only exposure to the principles of marketing has been through the study of social psychology (which includes social influence). This was a conscious decision: I found the idea of selling anything distasteful, and wanted to go into a helping profession - help, not sell.

Little did I know that marketing is a necessary precursor to helping: you can't help people if they don't know you're out there! Most of us start out at agencies that already have clients - probably because agencies have established reputations, and also employ marketing professionals. Clinicians are often unaware of this infrastructure, but once we set out into private practice, it's up to us to make sure people know about that practice, if we want to get any clients. Clearly it was an oversight on my part to so assiduously avoid learning marketing!

Although I may be a little late on the up-take, I am now learning the basics, and will share them with you (since I've heard that many therapists start out with a similar aversion to the subject).

The first lesson: Identify the gate-keepers

While we may consider finding a therapist to be an obvious response to various life difficulties, it is actually not that obvious to many people (1) that they may benefit from therapy, and (2) where they would even find a therapist who is familiar with a given problem. So, while there may be some people who seek and find a therapist on their own, it's much more common for people to come to therapy on the recommendation of someone else - often another type of professional with whom they are already connected.

Once you've identified your target population, marketing begins with asking: "Who is already working with this population, and may be willing and able to direct them to me for therapy?" Some possibilities are:

• Primary Care Providers, including doctors, nurse practitioners, and general dentists. PCPs are often the first to hear about it when people have mental health concerns, since people are seeing them anyway, usually trust them, and many PCPs will ask about overall well-being.
• Educators (preschool through graduate school, depending on your population, including coaches), and employers. When people are having mental health difficulties, it often begins to impact their school or work performance, and therefore comes to the attention of teachers, coaches, or supervisors.
• Religious communities, and especially their leaders (i.e., ministers, rabbis, pastors, priests, imams, etc.). People often trust these individuals, and already discuss personal matters with them (not much is more personal than the state of one's spiritual life). They also have ready access to all the important transitions of family life: marriage, birth, illness/injury, death. 
• Hospitals. Mental health problems are not always identified early. Sometimes people don't get help until they are in crisis and are hospitalized. At that point, the hospital is responsible for setting up outpatient treatment as part of the discharge plan. Hospital social workers always need to know who is out there treating various populations.

What other groups come to mind as potential gate-keepers? Please contribute your ideas, if there are categories I haven't thought of!

Once you have identified gate-keepers, make a mailing list of relevant contacts in your specific area. Then get together your materials to send (to be covered in the next post on this topic).

How to Establish a Private Practice, Part 3: Insurance Panels

Once you've made decisions about when and where to start your practice, it's time to think about how you're going to get paid.

Some therapists choose not to join insurance panels. Some only accept self-pay clients, with or without a sliding scale. This saves them the hassle of negotiating with insurance companies, but it does have a down-side. It tends to require more marketing, banks on a well-established reputation for excellence, and narrows one's clientele. It also seems likely that, with the Affordable Healthcare Act increasing the availability of health insurance, most people will be buying insurance, and therefore likely want to use that insurance to pay for treatment whenever possible.

There are some alternatives when therapists do not want to join panels. Some require clients to pay them directly for services, but give clients a receipt which they can submit to their insurer for reimbursement. Others will accept insurance that includes an "Out of Network" benefit, allowing members to see any provider they choose, with a higher copay for providers who are not on the insurance panel. Usually, the provider has to get authorization and submit claims in a similar way to how "In Network" providers do. However, they do not get the benefit of receiving referrals from the insurance company.

Given that there is a similar amount of paperwork, but less opportunity to receive new referrals when not on panels, therapists wanting to open a private practice should seriously consider seeking admission to insurance panels (in other words, apply to become a provider for health insurers in your area).

Where does one even begin? Well, a logical starting point is to make a list of all the insurance companies operating in your area. Your professional association may already have made a list, so check their website. Other professionals in the area can also be a resource in identifying available panels.

Next, look at the list and determine whether you already have a relationship with any of the insurers. Sometimes clinicians are providers on insurance panels through their agency work, and can transfer their provider relationship to an independent practice. Also consider which panels you are - and are not - interested in joining. Insurers vary in reimbursement rates, and quality of provider relations. For example, one of the major companies in my area tries to interfere so much in dictating interventions for clients they've never actually met that I just don't want to work with them.

Once you have your "short list" of panels you would like to join, you have a choice in how to proceed: you can hire a billing or credentialing company to do a lot of the legwork for you, or you can go through the process yourself. Money is obviously a factor here - one quote I heard for a company to help with credentialing was $200 per panel! In general, it doesn't seem necessary to me, since the application is not that onerous. That said, however, there are some panels that say they're closed, and you pretty much have to know somebody to get on them; in those cases, credentialing services may be worth it.

If you decide to see how far you can get on your own before investing extra money in your start-up, begin by going to the insurance companies' websites. Click on the "providers" section, and look for something about becoming a provider or joining the panel. Depending on where you will be practicing, some panels may be closed (typically because they feel they have enough providers, though sometimes an "insider" can still help you get in - see above), while others will outline a process for applying.

The process does differ from company to company, but typically involves the following steps:

1) Filling out an application

For the application, you will need to be licensed, have an NPI number, a tax payer identification number (for an individual provider, this can be your social security number), a practice address (where you will actually see clients), and a billing address if it is different (e.g., I use my home address; others may use a billing company). You may need a copy of your license or diploma, and a copy of your professional liability insurance face sheet. You may also be asked to furnish proof of your landlord's building liability insurance (usually that policy's face sheet - yes, really).

You will probably have to identify a clinician already on that insurer's panel who will cover for you if there is an emergency when you are on vacation or otherwise unavailable. You may need his/her NPI number. You may also have to identify a psychopharmacologist on that insurer's panel to whom you will refer if medication is necessary. You may also need to provide reference letters from clinicians who are on the panel. It pays to develop a professional network, and find out who is on various panels. When in doubt, most insurers have a provider search feature on their websites, and you can search or browse for providers you may know.

You will also be asked to indicate what populations you serve, what problems you treat, and what interventions you use. To substantiate your expertise, you may have to provide a 5 or 10 year work history, or some form of documentation showing expertise with a special population (eating disorders, or trauma, for example).

There will probably be some form of declaration or attestation to sign, along with a W-9 form (for reimbursement). Once you have all the information and documents complete, you will either fax or mail them to the address listed on the application.

2) The CAQH Universal Provider Datasource

Either before or after submitting the application, you will be asked to complete the credentialing process through the CAQH Universal Provider Datasource. This is an online clearinghouse that gathers information and documents from healthcare providers, to be accessed by insurance companies or healthcare organizations seeking to credential individual providers. You will have to get an ID number for CAQH from one of the insurance companies to which you are applying. Some allow you to call them to get this number; for others, you will get it after you have sent in your application.

Once you have an ID number, you can go to the website and create a username and password. Then, you begin the process of entering information. Bear in mind that this website is used for all kinds of healthcare providers, so you will not have responses to every question. You will need all of the same information you needed for the application: practice and billing addresses, NPI and license numbers, any professional memberships, work history, specialties, etc.

The application gives you the option of either selecting specific insurers to whom you want your information to be available, or making your information available to any insurer that attests you have applied for credentialing. I chose the latter, so as to avoid being turned down if I don't list the correct insurer; other people may be more concerned about privacy and choose the former option.

After completing the online application, you will be asked to review and attest to your responses (and you will have to reattest every 4 months). It will then prompt you to print a personalized fax cover sheet, with which to fax in copies of supporting documentation. There is a signature page that will also print, and is one of the required attachments, along with a copy of your license. Other documents you should submit include your liability insurance face sheet, a W-9, a copy of your CV, and reference letters if you have them. It will take 2-3 days for these documents to be added to your CAQH application, at which point it will be complete.

3) The contract

If the insurance company is interested, they will send you a packet with copies of a contract for you to read, sign and return to them. They then check any remaining documentation (e.g., CAQH if they have not yet reviewed it), and if all goes well, sign and return a copy to you with a welcome letter and effective date, outlining when you can start accepting their insurance, and which of their products you can accept (e.g., many have HMO, PPO, and Medicare plans, but you might not contract with all of them). Once you get this letter, you become an "In Network Provider" and can begin seeing clients using this insurance. You will also be listed on their provider list, which can be a source of additional referrals.

How to Establish a Private Practice, Part 2: Decisions, Decisions

Now that you have laid the foundation for establishing a private practice, there are some decisions you need to consider:

1) Timing

Only you can determine when the timing is right to take the leap of opening a practice. Remember that there are some start-up costs: you will have to rent space (and possibly furnish it), get malpractice insurance, print business cards and legal documents, etc. You may also choose to launch a website, or hire someone to help you with insurance credentialing. And, since money won't be coming in right away, you'll have to have a little money to play with.

2) Target population

What type of clients do you want to work with? While you may not want to overly limit yourself, having expertise with a specific population or problem helps with marketing and referrals (niche marketing, I think it might be called). Many clinicians will work with a range of clients, but tend to target a particular age group, type of problem, and/or modality (individual, couples, family, group).

3) Schedule

When do you plan to schedule appointments? Are you going to try to do full-time private practice right away, or are you scheduling your practice around another job? How many billable hours do you want to schedule each week? Are you willing to do any evenings or weekends? Consider both your own needs, and the needs of your target population (e.g, children are not usually available weekday mornings).

4) Location

Based on the answers to these questions, you will need to look for office space. Unless you happen to have an office set up in your home, or enough capital to actually buy a space, that means you're looking for a professional rental. Craig's List actually has a section under real estate where professional spaces are listed. The local chapters of various professional associations (NASW, APA, etc) also sometimes post office listings. If you plan to rent full-time office space, you may have more options available than if you want to share an office, but you will also most likely have to furnish it yourself (this is an extra expense...but you can decorate however you want).

Sharing office space can be a good option for people just starting out, and spending fewer hours a week at their private practice. Some clinicians sublet their offices, and other landlords rent office space in time blocks (usually a minimum of 4 hour blocks). These spaces are usually furnished (again, that can be good or bad). When you're looking at offices, make sure to also ask about utilities, services, shared bathrooms, copy machine/fax, waiting areas, etc.

You may have a general (or even specific) idea about the area or neighborhood where you want to locate your practice. However, some flexibility is necessary, based on what office space is actually available, and at what cost. Especially if you are renting less than full time, you may be more limited geographically. As you consider locations, think about where you may be getting referrals, local competition, convenience to transportation options, and overall accessibility.

5) Money

How do you plan to get paid? How much will you charge? Your hourly rate should reflect the going rate in your area. Will you be working with insurance companies? If people are paying out-of-pocket, will you offer a sliding scale? (These questions deserve their own post, to come, but are things to consider as you begin, because they may influence how you market your practice and to whom).

Once you have answered these questions, arranged for office space, etc, it's time to begin the insurance credentialing process (if you plan to accept insurance) and marketing your practice. These will be discussed in the next few posts in this series.

How to Establish a Private Practice, Part 1: Before You Begin

I recently decided to try to build a small private practice, with the eventual goal of staying at my full-time job, but leaving my fee-for-service job and doing private practice instead. The benefits of transitioning from fee-for-service to private practice are that I would make more money, be able to select the population and clients I work with, and get to decide how to structure things like paperwork and policies (within legal and ethical guidelines, of course).

I search online for information, tips and steps to take to start a practice, but found surprising little (excepts ads). So, I'm trying to remedy that situation through a series of posts on the subject, as I muddle my way through. This is part 1.

Things you will need ahead of time:

1) The first requirement for a private practice is pretty obvious: you have to be licensed to practice independently. Usually that means a graduate degree and a certain amount of post-graduate supervised experience. You will need to produce a photocopy of your diploma, and of your professional license, when applying to join insurance panels (a process referred to as credentialing).

2) Next, you need professional liability insurance (aka malpractice insurance). Many professional associations, such as the NASW and APA, offer low-cost insurance options for members. You will have to produce proof of insurance when applying to join insurance panels. However, it can be a little confusing to figure out what to buy. While the minimums vary from state to state and panel to panel, I have found that $1,000,000 per claim, $3,000,000 aggregate is the most required by panels in my area. (This is different than what was recommended on NASWMA.org, which suggested $2,000,000/$2,000,000, and would not have worked for at least one of the major insurance panels in the area because of the lower aggregate coverage). The good news is it is fairly easy to change coverage levels if you accidentally purchase the wrong amount initially.

The other quirk of malpractice insurance is that the premium varies depending on how many hours per week you practice. However - this total includes ALL of your practice, not just your private practive. So, for example, even though I will only be seeing clients privately fewer than 8 hours a week, I also have a full-time job, and therefore need full-time insurance.

Once you buy insurance, they will send you two things: a stack of papers that include all the fine print and details of the policy, and a "certificate of insurance." You will need to provide a copy of the certificate as part of credentialing. (It may be referred to as the "face sheet" but does not say "face sheet" anywhere on it, and my insurer sent it separately - just know they are the same thing).

3) Once you are licensed, you will also need to apply for a National Provider Identifier - also called your NPI number. The application is available online, and is pretty straightforward. You don't have to be in private practice to get one, and it's easy to change your information after the fact (e.g., to update your practice address, license, etc).

4) Maintain an updated resume or CV - apparently you need one, even if you're trying to be self-employed. You will have to list at least the last 5 years of work experience, and account for any gaps, as part of credentialing.

Once you have gathered these things, there are some decisions to make. I'll address those in the next post in this series, so stay tuned. And if I've forgotten anything you need ahead of time, leave a comment!