So you want to start a private practice: some thoughts - PowerPoint PPT Presentation


Title: So you want to start a private practice: some thoughts


1
So you want to start a private practice some
thoughts
  • Judy Ripsch, Ph.D., L.C.S.W.

2
Intro
  • Intro Self (Who made me the expert?)
  • Why are you here?
  • What do you want to know?
  • Need to assess market and assess self

3
Assess Self
  • Attitude
  • Knowledge
  • Skills
  • Both as a practicing clinician and as a business
    person
  • Lets talk about the business person

4
Business Hat Exercise
  • Write down all the words and phrases that you
    think of when you hear the word "business.
  • Share

5
Business Hat Exercise
  • Does the word business make you feel uneasy,
    tense?
  • Do you think someone may be taking advantage of
    you?
  • Do you feel that you lack business skills?

6
Business Hat Exercise (Cont.)
  • Do you believe that business people are
    ruthless, money-hungry, without ethics,
    insensitive to others, a different breed from
    counselors and counselor educators, and from you?

7
Business Hat Exercise (Cont.)
  • If your answer was "yes" to any of these
    questions, then you may have roadblocks that hold
    you back from deciding whether to start a private
    practice.
  • Do you want to be a business person?

8
Attitude
  • Your first step is to put on your business hat!
  • The confidence it takes to put on this hat comes
    from your desire to not only help people, but
    also to make money.
  • Can you bill? Can you collect? Are you worth
    your fee?

9
Attitude (Cont.)
  • You must be comfortable with your need to make
    money and charge directly for your
    servicesremember, making a living is not
    unethical!

10
Attitude (Cont.)
  • You must be willing to take some risks
    financially.
  • It often takes at least two years to build a
    successful practice considerably more if it is
    planned and managed poorly.

11
Attitude (Cont.)
  • (after 5 yrs IRS considers it a hobby!)
  • You may lose money initially until a referral
    network and client base are established.

12
Knowledge
  • You must become well acquainted with budgets,
    cash flows and business plans to evaluate the
    potential and ongoing viability of your
    independent practice.
  • You must know about billing, coding, collecting.
  • You must be prepared to market your skills to
    guarantee success.

13
Skills
  • You must be able to attend to the minutiae of
    running an office as it is unlikely you will be
    able to afford to hire someone to do this
    initially.
  • You must be able to perform in an ethical,
    competent, legal manner.

14
What do I need to start?
  • License
  • Malpractice Ins (1,000,000-3,000,000)
  • Lawyer
  • Incorporate? LLC?
  • Accountant
  • Taxes
  • Business Plan
  • Access to clients
  • Access to payers

15
Business Plan
  • A detailed and sound business plan plots your
    targets for your business and identifies how you
    will achieve them.
  • Most business plans contain three standard
    elements
  • Marketing plan.
  • Operating plan.
  • Financial plan.

16
Marketing Plan
  • Your marketing plan should contain a detailed
    marketing analysis.
  • How will you do this? (e.g. other professionals,
    customer/clients)
  • Needs analysis.
  • Whats needed in the area?
  • What already exists?
  • Wait lists?
  • Other

17
Marketing Plan (Cont.)
  • Analysis of your competitive strengths and
    weaknesses in ability to fill need.
  • Identify the areas where you know you have an
    edge and those where you are less qualified.
  • Finally, identify your sales strategythe means
    by which you will make your services known.

18
Operating Plan
  • Good business planning also involves the creation
    of an operating planone that attends to the
    "mechanics" of running a business.
  • You must specify
  • The location (building and equipment).
  • Management and staffing (as appropriate).
  • Administrative or professional procedures that
    you expect to follow (hours of work, scheduled
    services). (PP manual)

19
Financial Plan
  • Lastly, your business plan requires a financial
    plan component. Clearly identify startup costs,
    expected sources of funds, cash-flow forecasts,
    operating costs, and an initial profit/loss
    forecast.
  • Your business plan must emphasize quantitative
    data to justify why your business will succeed.

20
Financial Plan (Cont.)
  • Qualitative data can be used as well to help in
    identifying trends associated with the
    marketplace.
  • Using quantitative and qualitative data to build
    your business demonstrates that you understand
    that the market truly requires your services.

21
Strategic Plan
  • For most private practitioners, the business and
    strategic plan will be one and the same.
  • Strategic questions to be considered are
  • What are your long-term strategies to market
    the practice?
  • What are your long-term client and revenue
    goals?

22
Strategic Plan (Cont.)
  • What are your minimal profit margins/client
    retention rates required to maintain the
    practice?
  • What associations and networks are planned to
    promote practice growth?
  • What contingency plans have been created for
    times of illness or slowness in the marketplace?

23
Strategic Plan (Cont.)
  • While business and strategic plans are to be
    written, they are not carved in stone.
  • Each is to be treated as a toola fluid
    documentthat you can adjust and reevaluate as
    necessary.
  • Think Treatment Planning!

24
Budgeting
  • Your budget will be a key feature of your
    business plan and is updated annually.
  • A budget outlines expected sources of income and
    expenses and results in a projected income or
    loss for the year.

25
Budgeting (Cont.)
  • Your budget for your first year of practice will
    include start-up costs in addition to ongoing
    expenses.
  • When budgeting, it is useful to overestimate
    costs and underestimate projected income so as to
    increase the realistic nature of your
    expectations.

26
Budgeting (Cont.)
  • Developing a "worst case" scenario will result in
    more careful planning of budget categories.
  • Your budget and your financial statementproduced
    at the end of the fiscal yearpermit more
    accurate planning of your budget for your second
    and subsequent years of practice.

27
Budgeting (Cont.)
  • A financial statement is the summary of actual
    income and costs incurred for the fiscal year and
    shows either a profit or a loss on the balance
    sheet.
  • It uses the same categories as those used in your
    budget and includes various depreciation
    schedules.
  • See Accountant!

28
Expense categories
  • Expense categories in a budget can vary, but
    common ones might include
  • Office spacerent, furniture, cleaning,
    upgrades and painting, utilities, parking.
  • Telephonephone lines, computer access, fax
    line, long distance charges, cellular phone
    service, answering services.
  • Machinecomputer, server, fax, copier, printer,
    answering machine

29
Expense categories (Cont.)
  • Office supplies and materialsbasic office
    supplies, ink, paper, stationery, specialized
    supplies, test materials, reference materials,
    coffee.
  • Postage.
  • Bank chargesfor checks, accounts, deposits,
    NSF checks written by clients, credit card fees.
  • Billing program/service (clearing house)
  • Business program (Quicken?)

30
Expense categories (Cont.)
  • interests on loans.
  • Insuranceprofessional liability, general
    office liability, health care, disability, office
    expense (e.g. unemployment ins.) , accidental
    death and dismemberment.
  • Salaries and benefits paid to staff (self).
  • Retirement savings
  • Pro Bono work

31
Expense categories (Cont.)
  • Licensesprofessional licenses, business
    licenses, registration fees, listing fees.
  • Income taxespayments are computed based on
    your income or loss for the year and are not a
    budget category per se. You will however, need to
    plan on accumulating enough cash to pay your
    taxes on a quarterly basis. (Double FICA)
  • Business and other taxesas may be required
    locally.

32
Expense categories (Cont.)
  • Bad debtsunpaid invoices that are written off.
  • Bookkeeping and accounting fees.
  • Legal fees.
  • Outside professional servicescase consultants,
    supervision, holiday cover-off.
  • Professional developmentconferences and
    workshops, supervision. (CEUs)
  • Professional dues and membership fees.

33
Expense categories (Cont.)
  • - Play therapy materialsstocking a play therapy
    room can be very costly. Depending on the
    complexity of the materials offered, costs can
    run to several thousand dollars.
  • - Biofeedback materialsagain this specialized
    equipment can be very costly. Often a specialized
    room and chair for sessions will further add to
    cost.

34
Expense categories (Cont.)
  • - Professional journals, reference materials and
    membershipsin order to keep current with
    emerging research findings regarding theory and
    clinical practice, it is convenient to subscribe
    to various professional journals and to buy
    essential reference materials.
  • - Locked fireproof filing cabinets (At lease two
    locks between files and intruder)

35
Expense categories (Cont.)
  • Sales promotionopen house, special mailings,
    phone book, internet presence.
  • Vehicle and travel expensestravel logs of
    business and personal use, vehicle charges,
    mileage paid, airfares, metered parking
  • Depreciation of furniture, business machines
    and any large purchases.
  • Collection fees
  • Software (client records)
  • Others

36
Simple principles can guide early budgeting
  • Be realistic and estimate costs carefully.
  • Practice austerity and shop around.
  • Balance cost, durability and quality of
    materials.
  • Start basic.

37
Simple principles can guide early budgeting
(Cont.)
  • Underestimate income and overestimate costs.
  • Accumulate operating capital prior to opening
    your office.
  • Avoid large loans as you will need considerable
    income to service the debt.
  • Expect some payment lag. (Depends a lot on
    payor)

38
Simple principles can guide early budgeting
(Cont.)
  • Obtain partial guaranteed funding. (part time,
    consultant, services for hosp/court/etc.)
  • Maintain a block of funds to cover at least six
    months of operating expenses in case of various
    emergencies.
  • Review your budget regularly to gauge your
    financial performance.

39
Accounting and financial records
  • As an independent practitioner and business
    person, you will need to keep accurate and
    detailed financial records.
  • Not only does this allow you to track and manage
    your finances, but such records are necessary
    should you ever be audited by federal tax
    personnel.
  • Consultation with a business accountant is
    essential in setting your accounting system and
    financial records.

40
Accounting and financial records (Cont.)
  • Your accountant also may suggest a user-friendly
    accounting software package that enables you or
    your support staff to enter basic data and even
    produce a financial statement.
  • You should consult a licensed accountant to
    determine the need for a formal audit or
    financial review of your business.
  • If you incorporate you may require a formal
    audita statement that ensures accuracy and
    appropriateness of all expenses and income
    claimed by your business. Check with lawyer.

41
Accounting and financial records (Cont.)
  • If you plan to depend on support staff to be
    responsible for record-keeping, ask detailed
    questions during their initial interviews about
    their experience with financial record-keeping,
    get references!!!
  • Institute checks and balances.

42
Accounting and financial records (Cont.)
  • Even so, it is very worth your while to be well
    aware of the income and costs in your business
    and review them regularly.
  • You are ultimately responsible for the success or
    failure of your business and cannot make informed
    business decisions unless you are indeed
    informed.

43
What else?
  • You are your own business manager/CEO.
  • You may also be your own bookkeeper!

44
Basic necessary financial records include
  • Receipts for all money received from direct,
    uninvoiced payment. (e.g. Co-Pay)
  • Number these sequentially provide one copy to
    the client and keep one for your records.
  • Invoices for services.
  • Number these sequentially provide two copies
    to the clientone to be returned with payment,
    one to keepand keep one for your records.
  • Open a separate account solely for your
    business, record all deposits/checks and balance
    all statements on a monthly basis.

45
Basic necessary financial records include
  • Use of a separate bank account assists in the
    ongoing management of your finances and saves you
    time when preparing financial statements and tax
    returns
  • Bank deposit slips. These are provided by your
    bank number them sequentially.
  • Use sequentially numbered, personalized
    business checks.
  • Record the name of the payee, the reason for the
    payment and the amount of the check on the check
    stubs.

46
Basic necessary financial records include
  • For services invoiced to you, note the check
    number and the date paid on your copy of the
    invoice.
  • Always check and balance statements of credit
    cards and checking accounts used for your
    business.
  • Maintain a petty cash fund and accurate records
    (receipts) of expenses paid with these moneys.

47
Basic necessary financial records include
  • Keep a log of all mileage driven for your
    business so that you can either claim mileage or
    a portion of your vehicle expenses.
  • Consult your accountant on the best strategy.
  • Keep a log of all pay telephone and parking
    meter cash payments for later claims
  • My Accountant gave me a book!

48
Basic necessary financial records include
  • Keep records of pay issued to people in your
    employ. If not contractual, you will need to
    make deductions for them and submit the Income
    Tax and FICA.
  • Regular monthly remittances reduce penalties. You
    will also need to decide what pay schedule to use
    to pay employees (e.g., monthly, biweekly, etc.).
  • You will need to pay them regularly and to pay
    them prior to paying your own salary if cash flow
    is low.

49
Basic necessary financial records include
  • While these records are detailed and laborious to
    keep, they are worth the effort as every penny is
    accounted for and you can see clearly how your
    business is functioning and can then plan
    accordingly.
  • As an independent practitioner, you will be
    responsible for paying and collecting various
    taxes. (e.g. Fed St. Income Tax, HICFA,
    Unemployment tax)
  • Electronic billing/banking will make some of
    these suggestions archaic.

50
Office Space
  • You will need to find or develop office space.
  • One way is to contact existing practitioners in
    your area and sublet space from them.
  • Most private practitioners have open times in
    their offices where, for a fee, you may be able
    to use the office when they do not.

51
Office Space (Cont.)
  • The difficulty with this plan is that you are at
    the mercy of their schedules.
  • Another creative way to obtain office space is by
    contacting your local pediatricians, general
    practitioners, gynecologists, or other doctors.

52
Office Space (Cont.)
  • You might offer a service to them in exchange
    for space in their office when they are not using
    it.
  • You could offer to do parenting groups, marriage
    enrichment groups, weight loss help, divorce
    recovery, or stress management, all in exchange
    for office space.

53
Office Space (Cont.)
  • The idea here is that even a busy doctor's office
    has times where it is not in use.
  • Also, a pediatrician may relish the thought of
    having a licensed mental health professional in
    the office, available to see his/her patients.

54
Office Space (Cont.)
  • There are many options with which to negotiate.
    If the doctor or the office manager seems
    interested, but suggests some payment for office
    space, and if the cost is reasonable, you may ask
    to have your name put on the door with the other
    professionals.

55
Office Space (Cont.)
  • The cost of using the office is offset by the
    invaluable publicity, creditability and access to
    clients.
  • If you follow this plan, it is best to target a
    doctor's office that fits your niche.
    (CA/Pediatrician, Womens groups/gynecologist,
    etc.)

56
Office Space (Cont.)
  • If this seems to difficult to do, remember that
    you are a business person and that the worst
    thing that they could say in answer to your offer
    is no.

57
Office Space (Cont.)
  • Sharing office space holds down cost. Another
    mental health professional, a friend, may be
    interested in opening an office and all expenses
    would be shared.
  • Finally, there's always the possibility of
    finding a small office in your target area that
    may fit your budget.

58
Office Space (Cont.)
  • Be sure the office is accessible, clean, private,
    confidential, professional, has a waiting area,
    has accessible bathroom, etc.
  • Depending on your area/nitch/comfort level, you
    may choose to provide home visits. (Not N.H. in
    IL as yet.)
  • Be creative!

59
Forms
  • Forms
  • Clinical records (notes, plan, soc. Hx, diag.)
  • Consent to treat , Confidentiality/HIPPA
    Statement
  • Consent to bill
  • Demographics, referral source
  • Complete, organized and proper clinical records
    enhance service provision and also serve to
    protect the practitioner in the event of a
    malpractice allegation or later subpoena to
    court.

60
Core contents of clinical files
  • Identifying data name, birth date, address,
    phone numbers, gender, responsible payor.
  • Intake form identifying presenting problems.
  • Record of appointments, no-shows,
    cancellations.

61
Core contents of clinical files (Cont.)
  • Any assessments undertaken and interventions
    recommended, formulation and treatment goals.
  • Description of the types and dates of the
    services provided, record of cancellations and
    no-shows.
  • Periodic description of client progress.
    (Justify continuing service.)
  • Copies of any formal service agreements.

62
Core contents of clinical files (Cont.)
  • Copies of signed releases of information and of
    the information released. (Make note on release.)
  • (Needed info is based on State Law. May include
    the names of any persons you expect to be
    contacting, the reason for the contact and the
    kind of information you will be discussing,
    purpose, expiration date of consent, signature,
    witness, etc.Check your state law!)

63
Core contents of clinical files (Cont.)
  • Copies of any release forms for taping,
    training, etc.
  • Copies of any written correspondence and record
    of phone calls.

64
Key elements to be addressed in effective
clinical record-keeping include
  • Date all reports only on the day they are
    completed.
  • Reports are to be signed by the practitioner
    providing service. (Name, License)
  • Notes must be accurate and specificthese are
    vital to help follow the progress of a client.
  • Include a mechanism for regular file review.

65
Security of information
  • All records, regardless of whether they are on
    paper or electronic, must be kept securely.
  • Must use appropriate firewalls if using
    electronic submissions.
  • Choose fireproof cabinets and locations away from
    general traffic areas.

66
Security of information (Cont.)
  • Keep files and records under lock and key at
    all timessecured from public access.
  • Keep public areas of the practiceparticularly
    the reception areafree of personal or financial
    information. (e.g. Dont call client by name!)
  • Shred all recordings or client documents that
    are no longer needed.
  • Minimum of two locks between file and access..

67
Fees
  • How do you set a fee schedule?
  • (Find out usual and customary in area, may
    check insurance or Medicare payment schedule,
    consider your experience and skill level)
  • The issue of payments is very important.

68
Fees (Cont.)
  • Be sure the client (AND YOU) understand that
    payment is made at the time of the appointment,
    and that any insurance consideration will be
    worked out in advance.
  • Deductables/copays, EOBs

69
Fees (Cont.)
  • Accepting payment for your services may make you
    uncomfortable at first. Do not be. You are a
    valuable professional who is licensed, and
    remember you are solid, knowledgeable, and
    effective.

70
Fees (Cont.)
  • If you consider sliding fee, be fair to yourself.
    Remember It is also a reflection of your
    vision, your self-worth and education. Many
    clients will see your fees as a gauge of your
    value as a professional.
  • Pro-Bono

71
Marketing
  • Provide good service. No network can compare to
    the one you create through the excellence of your
    work. Referrals from satisfied clients may not
    generate immediate referrals, but over time
    increase your client base. (After 30 years in
    Pontiac, I am seeing 3rd generation, presently
    WOM and EAP are my client base!)

72
Building a Client Base
  • Provide personal contact and immediate
    responses to inquiries from both referral sources
    and potential clients to demonstrate your
    interest in meeting their needs.
  • Maintain goodwill with potential referral
    sources and other professionals in the community.

73
Building a Client Base
  • Realize that various other professionals besides
    psychologists may be valuable referral sources,
    including medical professionals, educators,
    social workers, general counselors, employee
    assistance programs, lawyers and social service
    personnel, to list a few.

74
Building a Client Base (Cont.)
  • NETWORK, NETWORK, NETWORK
  • Refer clients elsewhere if you do not have the
    specific skills they require, or provide an
    option of an alternate referral if your waiting
    list is very long. Maintain a referral list of
    other professionals whose work you respect.

75
Building a Client Base (Cont.)
  • Distribute your business cards freely. Make
    them easy to read, attractive and professional.
    Include your name, degrees, license,
    certificates, address, and phone/fax/e-mail
    numbers. (e.g. mine)
  • Send a thank you letter to the referral source
    once you have seen a client and received their
    written consent to do so.

76
Building a Client Base (Cont.)
  • Send an announcement mailing when you first
    establish your practice, or add another
    practitioner to your practice. Realize that this
    may result in very few referrals, but will still
    make your availability known.
  • Contact local business reporter to do a piece on
    something special you are offering. (Horse riding
    therapy)

77
Building a Client Base (Cont.)
  • Hold an open-house to make your availability
    known, thank the people who have supported you,
    to establish a practice, and generally establish
    goodwill.
  • Join the local Chamber of Commerce.

78
Building a Client Base (Cont.)
  • Place your name and perhaps an advertisement in
    the Yellow Pages. Some people look there first.
  • Realize, however, that some people may not
    select a psychologist through the Yellow Pages.
    Know that having your name there indicates that
    you are a bona fide practitioner and provides
    phone numbers and addresses to facilitate contact
    with you.

79
Building a Client Base (Cont.)
  • Be willing to accept interviews from the media on
    general topics in psychology.
  • Have your name placed on a list for speakers'
    bureaus indicating your willingness to give
    presentations and workshops. This makes your name
    known.
  • Volunteer to speak at service clubs, church
    groups, womens groups, etc.

80
Building a Client Base (Cont.)
  • Give your practice a name and a logo. Again,
    this makes your name stand out and is likely to
    be most useful if you are in a joint practice
    with several other practitioners.
  • Serve on various community boards for either
    profit or non-profit societies.
  • Become adjunct faculty for universities,
    community colleges, etc.

81
EAPs
  • Employee Assistance Programs (EAPs) are employee
    benefit programs offered by many employers,
    typically in conjunction with a health insurance
    plan.
  • EAPs are intended to help employees deal with
    personal problems that might adversely impact
    their work performance, health, and well-being.
  • EAPs generally include assessment, short-term
    counseling and referral services for employees
    and their household members.

82
EAPs (Cont.)
  • Employees and their household members may use
    EAPs to help manage issues that could adversely
    impact their work and personal lives.
  • EAP counselors typically provide assessment,
    support, and if needed, referrals to additional
    resources.

83
The issues for which EAPs provide support vary,
but examples include
  • substance abuse
  • safe working environment
  • emotional distress
  • major life events, including births, accidents
    and deaths
  • health care concerns
  • financial or legal concerns

84
The issues for which EAPs provide support vary,
but examples include (Cont.)
  • family/personal relationship issues
  • Partner relationship issues
  • work relationship issues
  • concerns about aging parents
  • An EAP's services are usually free to the
    employee or household member, having been
    pre-paid by the employer

85
/- of working with EAP
  • PLUSES
  • Easy to collect from Contractor
  • Less paperwork
  • Source of referrals
  • No deductibles/co-pays to collect (no
    out-of-pocket for client)
  • Does not require major (reimbursable) diagnosis

86
/- of working with EAP (Cont.)
  • MINUSES
  • May be required to share clients info with
    employer (with clients permission)
  • Can not charge a no show fee
  • May not be able to self refer
  • Eap company is Keeper of the Records
  • Must be able to function in brief model
  • Some EAP companies have questionable fee
    arrangements

87
Insurance
  • Some insurances require that you be on their
    panel
  • Some will pay at lesser rate if you are out of
    network, some not at all.
  • Can often apply through web site (look for
    provider relations)
  • Find out who insures most people in your area
  • BC/BS is usually big

88
Insurance
  • May check with other providers (hospital?) to see
    whom they bill
  • Will need copies of current license, malpractice,
    certifications (e.g. CADC)
  • Medicare is special insurance with own process
    see on line, all electronic billing (central
    management service)

89
/-
  • PLUSES
  • Some referrals if persons covered are seeking
    someone in network
  • Can be reliable source of income
  • You maintain your own records
  • Many accept multiple billing methods

90
/-
  • MINUSES
  • May have to get preapproval
  • Deal with deductibles each year and copays
  • May pay reduced rates to covered therapists

91
Coding Info Needed for Billing
  • The CPT is a uniform coding system consisting of
    descriptive terms and identifying codes that are
    used primarily to identify medical services and
    procedures furnished by physicians and other
    health care professionals.

92
Coding Info Needed for Billing (Cont.)
  • These health care professionals use the CPT to
    identify services and procedures for which they
    bill public or private health insurance programs.
  • Decisions regarding the addition, deletion, or
    revision of CPT codes are made by the AMA.
  • The CPT codes are republished and updated
    annually by the AMA.

93
Coding Info Needed for Billing (Cont.)
  • Because these particular codes mean so much
    income for the AMA, it is difficult to find lists
    of them that are accessible to the public. In
    fact, groups that have tried to make them public
    have been cited for violations and fines by the
    AMA and have been forced to remove them from the
    Internet. Many groups license the lists of codes
    from the AMA, however, and then publish them
    online or in books. They are allowed to charge
    for access since they are also paying that
    licensing fee.

94
CPT (Current Procedural Terminology)
  • Billing service may have them
  • May buy a book from AMA
  • May pay for list on line
  • Most common 90801-intake, 90806-45 to 50 minute
    session.(90804, 90808)
  • Helpful to have the resource for parameters of
    what's included
  • New Health and Behavior codes presently can be
    used by Psychologists

95
Health and Behavior
  • CPT Code
  • (15 min 1 unit)(1 hr 4 units)
  • 96150 Assessment initial
  • 96151 Re-assessment
  • 96152 Intervention Individual
  • 96153 Intervention group
  • 96154 Intervention family w/ patient
  • 96155 Intervention family w/o patient

96
ICD-09
  • What Do the Numbers Mean? ICD-09, ICD-10 and
    Others?
  • ICD codes were first developed in 1893 in France
    by a physician, Jacques Bertillion. They were
    called the Bertillon Classification of Causes of
    Death. In 1898, they were adopted in the United
    States, and were considered, in effect, ICD-1
    because that was the first version of code
    numbers.

97
ICD-09 (Cont.)
  • Since then, as medical science has progressed and
    new diagnoses have been developed, named and
    described, the code lists have been updated. The
    number designation changes when the updates are
    so extensive that a wholesale change needs to be
    made. There may be annual updates, too, but those
    are considered to be relatively minor, and the
    basic code set doesn't change.
  • For example, the upgrade in 1949, ICD-6, was the
    first time mental disorders were added to the
    code set.

98
ICD-09 (Cont.)
  • Most of the codes we see in the United States
    today are version 9, called ICD-9-CM codes. With
    few exceptions, the paperwork we receive when we
    leave a doctors office will contain both CPT
    codes (Current Procedural Terminology) to
    describe the service that was rendered for
    billing purposes, and ICD-9-CM codes to describe
    why that service was provided. Further, most
    death certificates filed since 1977 will have an
    ICD-9 code on them.

99
ICD-09 (Cont.)
  • The most current list of codes in use is ICD-10.
    This list was first used in the United States in
    2007. Minor revisions added to ICD-10 codes were
    made available in early 2009 by the NCHS.
    Globally, most other countries in the world have
    implemented the ICD-10 codes. There are some
    major differences between the two code sets, the
    transition is very expensive, and most American
    providers have not yet upgraded to the ICD-10
    system.

100
But I use DSM-IV-TR to diagnose!
  • Covered Diagnoses Crosswalk of DSMIV
  • The crosswalk is a document designed to help you
    determine which ICD-9-CM diagnosis code (1977)
    corresponds to a particular DSM-IV-TR diagnosis
    code.

101
Do I need to use it?
  • YES!
  • Under the Health Insurance Portability and
    Accessibility Act (HIPAA), insurance companies
    who accept and process insurance claims
    electronically are only required to accept
    ICD-9-CM diagnosis codes.

102
Do I need to use it?
  • Because there is no HIPAA requirement that
    insurance companies also accept DSM-IV-TR codes,
    insurance companies are likely to only accept
    electronic claims that use ICD-9-CM diagnosis
    codes, and which will require psychologists who
    are only familiar with DSM-IV-TR to convert their
    DSM-IVTR diagnosis codes into ICD-9-CM diagnosis
    codes.

103
Where do I find it?
  • http//www.apapractice.org/apo/insider/practice/pr
    acmanage/practice_management/dsm-9.
  • GenericArticle.Single.articleLink.GenericArticle.S
    ingle.file.tmp/Download_the_Covered_Diagnoses__Cr
    osswalk20of_DSM-IV_Codes_to_ICD-9-CM_Codes_chart.
    pdf
  • Or Google Covered Diagnoses Crosswalk of
    DSMIV Codes to ICD-9-CM Codes

104
Mentor/supervision
  • If you decide to start a business one of the most
    important components is finding a trustworthy
    reliable mentor/supervisor who is successful.
  • Can supply needed expertise in business and
    psychotherapy.
  • Can provide needed supervision.

105
Mentor/supervision (Cont.)
  • Can provide access to assessing the current
    professional standard of care.
  • It is also helpful to networking with other
    entrepreneurs/therapists, join in-person and
    virtual entrepreneur/therapist support groups,
    take classes and workshops.

106
Ways to start
  • In the beginning opt for full-time work in an
    agency or institution, but take on a few clients
    privately.
  • This augments income and helps determine if there
    is a market for your skills.
  • This provides guaranteed income and benefits.

107
Ways to start (Cont.)
  • Spend time learning the policies and procedures
    of the entity, including billing.
  • Note you must be careful to avoid any conflict
    of interest, perhaps best achieved through
    completely different referral sources from those
    of the agency. It is also important not to use
    agency time to build your practice.

108
Ways to start (Cont.)
  • Another alternative is to join a functioning
    professional practice as an associate to gain
    awareness and experience prior to establishing an
    independent practice.
  • This also provides a safety net of sorts.
  • Exercise the same care regarding conflict of
    interest as you would if working in an agency or
    institution.

109
Ways to start (Cont.)
  • Opt for a clearly delineated part-time
    roleworking half-time at an agency and half-time
    in your own practice.
  • This is advantageous, as you have some guaranteed
    income, but can have more energy available to
    devote to building your referral network. Again,
    take care to avoid any conflict of interest.

110
Ways to start (Cont.)
  • Opt for full-time practice, while understanding
    the financial risks involved.
  • Perhaps the best way to ensure viability is to
    ensure that you have some guaranteed funding,
    such as obtaining a contract for a block of
    service provision, or a part-time teaching
    position.

111
Ways to start (Cont.)
  • Guaranteed funding ensures that bills will be
    paid during the time that you are building your
    referral network and a steady client base.
  • Be creative in developing an option that best
    suits your skills, strengths, energy, need for
    security and present circumstances.
  • Have a clear idea of anticipated costs and
    potential income.

112
My Advice
  • Dont quit your day job!!!
  • A new business can take up to 5 years to turn a
    good profit!

113
My Advice
  • Expect to spend a great deal of time developing
    and running a private practiceboth in serving
    clients and in marketing and running the
    business.
  • Careful planning and preparation is crucial and
    takes time.
  • Have financial resources available to your
    business.

114
My Advice
  • Be prepared to work hard at getting started,
    getting known and encouraging referrals.
  • As your practice enlarges, decrease your other
    commitments.
  • GO FOR IT! YOU CAN SUCCEED!!!!!
  • Q/A
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So you want to start a private practice: some thoughts

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Title: So you want to start a private practice: some thoughts


1
So you want to start a private practice some
thoughts
  • Judy Ripsch, Ph.D., L.C.S.W.

2
Intro
  • Intro Self (Who made me the expert?)
  • Why are you here?
  • What do you want to know?
  • Need to assess market and assess self

3
Assess Self
  • Attitude
  • Knowledge
  • Skills
  • Both as a practicing clinician and as a business
    person
  • Lets talk about the business person

4
Business Hat Exercise
  • Write down all the words and phrases that you
    think of when you hear the word "business.
  • Share

5
Business Hat Exercise
  • Does the word business make you feel uneasy,
    tense?
  • Do you think someone may be taking advantage of
    you?
  • Do you feel that you lack business skills?

6
Business Hat Exercise (Cont.)
  • Do you believe that business people are
    ruthless, money-hungry, without ethics,
    insensitive to others, a different breed from
    counselors and counselor educators, and from you?

7
Business Hat Exercise (Cont.)
  • If your answer was "yes" to any of these
    questions, then you may have roadblocks that hold
    you back from deciding whether to start a private
    practice.
  • Do you want to be a business person?

8
Attitude
  • Your first step is to put on your business hat!
  • The confidence it takes to put on this hat comes
    from your desire to not only help people, but
    also to make money.
  • Can you bill? Can you collect? Are you worth
    your fee?

9
Attitude (Cont.)
  • You must be comfortable with your need to make
    money and charge directly for your
    servicesremember, making a living is not
    unethical!

10
Attitude (Cont.)
  • You must be willing to take some risks
    financially.
  • It often takes at least two years to build a
    successful practice considerably more if it is
    planned and managed poorly.

11
Attitude (Cont.)
  • (after 5 yrs IRS considers it a hobby!)
  • You may lose money initially until a referral
    network and client base are established.

12
Knowledge
  • You must become well acquainted with budgets,
    cash flows and business plans to evaluate the
    potential and ongoing viability of your
    independent practice.
  • You must know about billing, coding, collecting.
  • You must be prepared to market your skills to
    guarantee success.

13
Skills
  • You must be able to attend to the minutiae of
    running an office as it is unlikely you will be
    able to afford to hire someone to do this
    initially.
  • You must be able to perform in an ethical,
    competent, legal manner.

14
What do I need to start?
  • License
  • Malpractice Ins (1,000,000-3,000,000)
  • Lawyer
  • Incorporate? LLC?
  • Accountant
  • Taxes
  • Business Plan
  • Access to clients
  • Access to payers

15
Business Plan
  • A detailed and sound business plan plots your
    targets for your business and identifies how you
    will achieve them.
  • Most business plans contain three standard
    elements
  • Marketing plan.
  • Operating plan.
  • Financial plan.

16
Marketing Plan
  • Your marketing plan should contain a detailed
    marketing analysis.
  • How will you do this? (e.g. other professionals,
    customer/clients)
  • Needs analysis.
  • Whats needed in the area?
  • What already exists?
  • Wait lists?
  • Other

17
Marketing Plan (Cont.)
  • Analysis of your competitive strengths and
    weaknesses in ability to fill need.
  • Identify the areas where you know you have an
    edge and those where you are less qualified.
  • Finally, identify your sales strategythe means
    by which you will make your services known.

18
Operating Plan
  • Good business planning also involves the creation
    of an operating planone that attends to the
    "mechanics" of running a business.
  • You must specify
  • The location (building and equipment).
  • Management and staffing (as appropriate).
  • Administrative or professional procedures that
    you expect to follow (hours of work, scheduled
    services). (PP manual)

19
Financial Plan
  • Lastly, your business plan requires a financial
    plan component. Clearly identify startup costs,
    expected sources of funds, cash-flow forecasts,
    operating costs, and an initial profit/loss
    forecast.
  • Your business plan must emphasize quantitative
    data to justify why your business will succeed.

20
Financial Plan (Cont.)
  • Qualitative data can be used as well to help in
    identifying trends associated with the
    marketplace.
  • Using quantitative and qualitative data to build
    your business demonstrates that you understand
    that the market truly requires your services.

21
Strategic Plan
  • For most private practitioners, the business and
    strategic plan will be one and the same.
  • Strategic questions to be considered are
  • What are your long-term strategies to market
    the practice?
  • What are your long-term client and revenue
    goals?

22
Strategic Plan (Cont.)
  • What are your minimal profit margins/client
    retention rates required to maintain the
    practice?
  • What associations and networks are planned to
    promote practice growth?
  • What contingency plans have been created for
    times of illness or slowness in the marketplace?

23
Strategic Plan (Cont.)
  • While business and strategic plans are to be
    written, they are not carved in stone.
  • Each is to be treated as a toola fluid
    documentthat you can adjust and reevaluate as
    necessary.
  • Think Treatment Planning!

24
Budgeting
  • Your budget will be a key feature of your
    business plan and is updated annually.
  • A budget outlines expected sources of income and
    expenses and results in a projected income or
    loss for the year.

25
Budgeting (Cont.)
  • Your budget for your first year of practice will
    include start-up costs in addition to ongoing
    expenses.
  • When budgeting, it is useful to overestimate
    costs and underestimate projected income so as to
    increase the realistic nature of your
    expectations.

26
Budgeting (Cont.)
  • Developing a "worst case" scenario will result in
    more careful planning of budget categories.
  • Your budget and your financial statementproduced
    at the end of the fiscal yearpermit more
    accurate planning of your budget for your second
    and subsequent years of practice.

27
Budgeting (Cont.)
  • A financial statement is the summary of actual
    income and costs incurred for the fiscal year and
    shows either a profit or a loss on the balance
    sheet.
  • It uses the same categories as those used in your
    budget and includes various depreciation
    schedules.
  • See Accountant!

28
Expense categories
  • Expense categories in a budget can vary, but
    common ones might include
  • Office spacerent, furniture, cleaning,
    upgrades and painting, utilities, parking.
  • Telephonephone lines, computer access, fax
    line, long distance charges, cellular phone
    service, answering services.
  • Machinecomputer, server, fax, copier, printer,
    answering machine

29
Expense categories (Cont.)
  • Office supplies and materialsbasic office
    supplies, ink, paper, stationery, specialized
    supplies, test materials, reference materials,
    coffee.
  • Postage.
  • Bank chargesfor checks, accounts, deposits,
    NSF checks written by clients, credit card fees.
  • Billing program/service (clearing house)
  • Business program (Quicken?)

30
Expense categories (Cont.)
  • interests on loans.
  • Insuranceprofessional liability, general
    office liability, health care, disability, office
    expense (e.g. unemployment ins.) , accidental
    death and dismemberment.
  • Salaries and benefits paid to staff (self).
  • Retirement savings
  • Pro Bono work

31
Expense categories (Cont.)
  • Licensesprofessional licenses, business
    licenses, registration fees, listing fees.
  • Income taxespayments are computed based on
    your income or loss for the year and are not a
    budget category per se. You will however, need to
    plan on accumulating enough cash to pay your
    taxes on a quarterly basis. (Double FICA)
  • Business and other taxesas may be required
    locally.

32
Expense categories (Cont.)
  • Bad debtsunpaid invoices that are written off.
  • Bookkeeping and accounting fees.
  • Legal fees.
  • Outside professional servicescase consultants,
    supervision, holiday cover-off.
  • Professional developmentconferences and
    workshops, supervision. (CEUs)
  • Professional dues and membership fees.

33
Expense categories (Cont.)
  • - Play therapy materialsstocking a play therapy
    room can be very costly. Depending on the
    complexity of the materials offered, costs can
    run to several thousand dollars.
  • - Biofeedback materialsagain this specialized
    equipment can be very costly. Often a specialized
    room and chair for sessions will further add to
    cost.

34
Expense categories (Cont.)
  • - Professional journals, reference materials and
    membershipsin order to keep current with
    emerging research findings regarding theory and
    clinical practice, it is convenient to subscribe
    to various professional journals and to buy
    essential reference materials.
  • - Locked fireproof filing cabinets (At lease two
    locks between files and intruder)

35
Expense categories (Cont.)
  • Sales promotionopen house, special mailings,
    phone book, internet presence.
  • Vehicle and travel expensestravel logs of
    business and personal use, vehicle charges,
    mileage paid, airfares, metered parking
  • Depreciation of furniture, business machines
    and any large purchases.
  • Collection fees
  • Software (client records)
  • Others

36
Simple principles can guide early budgeting
  • Be realistic and estimate costs carefully.
  • Practice austerity and shop around.
  • Balance cost, durability and quality of
    materials.
  • Start basic.

37
Simple principles can guide early budgeting
(Cont.)
  • Underestimate income and overestimate costs.
  • Accumulate operating capital prior to opening
    your office.
  • Avoid large loans as you will need considerable
    income to service the debt.
  • Expect some payment lag. (Depends a lot on
    payor)

38
Simple principles can guide early budgeting
(Cont.)
  • Obtain partial guaranteed funding. (part time,
    consultant, services for hosp/court/etc.)
  • Maintain a block of funds to cover at least six
    months of operating expenses in case of various
    emergencies.
  • Review your budget regularly to gauge your
    financial performance.

39
Accounting and financial records
  • As an independent practitioner and business
    person, you will need to keep accurate and
    detailed financial records.
  • Not only does this allow you to track and manage
    your finances, but such records are necessary
    should you ever be audited by federal tax
    personnel.
  • Consultation with a business accountant is
    essential in setting your accounting system and
    financial records.

40
Accounting and financial records (Cont.)
  • Your accountant also may suggest a user-friendly
    accounting software package that enables you or
    your support staff to enter basic data and even
    produce a financial statement.
  • You should consult a licensed accountant to
    determine the need for a formal audit or
    financial review of your business.
  • If you incorporate you may require a formal
    audita statement that ensures accuracy and
    appropriateness of all expenses and income
    claimed by your business. Check with lawyer.

41
Accounting and financial records (Cont.)
  • If you plan to depend on support staff to be
    responsible for record-keeping, ask detailed
    questions during their initial interviews about
    their experience with financial record-keeping,
    get references!!!
  • Institute checks and balances.

42
Accounting and financial records (Cont.)
  • Even so, it is very worth your while to be well
    aware of the income and costs in your business
    and review them regularly.
  • You are ultimately responsible for the success or
    failure of your business and cannot make informed
    business decisions unless you are indeed
    informed.

43
What else?
  • You are your own business manager/CEO.
  • You may also be your own bookkeeper!

44
Basic necessary financial records include
  • Receipts for all money received from direct,
    uninvoiced payment. (e.g. Co-Pay)
  • Number these sequentially provide one copy to
    the client and keep one for your records.
  • Invoices for services.
  • Number these sequentially provide two copies
    to the clientone to be returned with payment,
    one to keepand keep one for your records.
  • Open a separate account solely for your
    business, record all deposits/checks and balance
    all statements on a monthly basis.

45
Basic necessary financial records include
  • Use of a separate bank account assists in the
    ongoing management of your finances and saves you
    time when preparing financial statements and tax
    returns
  • Bank deposit slips. These are provided by your
    bank number them sequentially.
  • Use sequentially numbered, personalized
    business checks.
  • Record the name of the payee, the reason for the
    payment and the amount of the check on the check
    stubs.

46
Basic necessary financial records include
  • For services invoiced to you, note the check
    number and the date paid on your copy of the
    invoice.
  • Always check and balance statements of credit
    cards and checking accounts used for your
    business.
  • Maintain a petty cash fund and accurate records
    (receipts) of expenses paid with these moneys.

47
Basic necessary financial records include
  • Keep a log of all mileage driven for your
    business so that you can either claim mileage or
    a portion of your vehicle expenses.
  • Consult your accountant on the best strategy.
  • Keep a log of all pay telephone and parking
    meter cash payments for later claims
  • My Accountant gave me a book!

48
Basic necessary financial records include
  • Keep records of pay issued to people in your
    employ. If not contractual, you will need to
    make deductions for them and submit the Income
    Tax and FICA.
  • Regular monthly remittances reduce penalties. You
    will also need to decide what pay schedule to use
    to pay employees (e.g., monthly, biweekly, etc.).
  • You will need to pay them regularly and to pay
    them prior to paying your own salary if cash flow
    is low.

49
Basic necessary financial records include
  • While these records are detailed and laborious to
    keep, they are worth the effort as every penny is
    accounted for and you can see clearly how your
    business is functioning and can then plan
    accordingly.
  • As an independent practitioner, you will be
    responsible for paying and collecting various
    taxes. (e.g. Fed St. Income Tax, HICFA,
    Unemployment tax)
  • Electronic billing/banking will make some of
    these suggestions archaic.

50
Office Space
  • You will need to find or develop office space.
  • One way is to contact existing practitioners in
    your area and sublet space from them.
  • Most private practitioners have open times in
    their offices where, for a fee, you may be able
    to use the office when they do not.

51
Office Space (Cont.)
  • The difficulty with this plan is that you are at
    the mercy of their schedules.
  • Another creative way to obtain office space is by
    contacting your local pediatricians, general
    practitioners, gynecologists, or other doctors.

52
Office Space (Cont.)
  • You might offer a service to them in exchange
    for space in their office when they are not using
    it.
  • You could offer to do parenting groups, marriage
    enrichment groups, weight loss help, divorce
    recovery, or stress management, all in exchange
    for office space.

53
Office Space (Cont.)
  • The idea here is that even a busy doctor's office
    has times where it is not in use.
  • Also, a pediatrician may relish the thought of
    having a licensed mental health professional in
    the office, available to see his/her patients.

54
Office Space (Cont.)
  • There are many options with which to negotiate.
    If the doctor or the office manager seems
    interested, but suggests some payment for office
    space, and if the cost is reasonable, you may ask
    to have your name put on the door with the other
    professionals.

55
Office Space (Cont.)
  • The cost of using the office is offset by the
    invaluable publicity, creditability and access to
    clients.
  • If you follow this plan, it is best to target a
    doctor's office that fits your niche.
    (CA/Pediatrician, Womens groups/gynecologist,
    etc.)

56
Office Space (Cont.)
  • If this seems to difficult to do, remember that
    you are a business person and that the worst
    thing that they could say in answer to your offer
    is no.

57
Office Space (Cont.)
  • Sharing office space holds down cost. Another
    mental health professional, a friend, may be
    interested in opening an office and all expenses
    would be shared.
  • Finally, there's always the possibility of
    finding a small office in your target area that
    may fit your budget.

58
Office Space (Cont.)
  • Be sure the office is accessible, clean, private,
    confidential, professional, has a waiting area,
    has accessible bathroom, etc.
  • Depending on your area/nitch/comfort level, you
    may choose to provide home visits. (Not N.H. in
    IL as yet.)
  • Be creative!

59
Forms
  • Forms
  • Clinical records (notes, plan, soc. Hx, diag.)
  • Consent to treat , Confidentiality/HIPPA
    Statement
  • Consent to bill
  • Demographics, referral source
  • Complete, organized and proper clinical records
    enhance service provision and also serve to
    protect the practitioner in the event of a
    malpractice allegation or later subpoena to
    court.

60
Core contents of clinical files
  • Identifying data name, birth date, address,
    phone numbers, gender, responsible payor.
  • Intake form identifying presenting problems.
  • Record of appointments, no-shows,
    cancellations.

61
Core contents of clinical files (Cont.)
  • Any assessments undertaken and interventions
    recommended, formulation and treatment goals.
  • Description of the types and dates of the
    services provided, record of cancellations and
    no-shows.
  • Periodic description of client progress.
    (Justify continuing service.)
  • Copies of any formal service agreements.

62
Core contents of clinical files (Cont.)
  • Copies of signed releases of information and of
    the information released. (Make note on release.)
  • (Needed info is based on State Law. May include
    the names of any persons you expect to be
    contacting, the reason for the contact and the
    kind of information you will be discussing,
    purpose, expiration date of consent, signature,
    witness, etc.Check your state law!)

63
Core contents of clinical files (Cont.)
  • Copies of any release forms for taping,
    training, etc.
  • Copies of any written correspondence and record
    of phone calls.

64
Key elements to be addressed in effective
clinical record-keeping include
  • Date all reports only on the day they are
    completed.
  • Reports are to be signed by the practitioner
    providing service. (Name, License)
  • Notes must be accurate and specificthese are
    vital to help follow the progress of a client.
  • Include a mechanism for regular file review.

65
Security of information
  • All records, regardless of whether they are on
    paper or electronic, must be kept securely.
  • Must use appropriate firewalls if using
    electronic submissions.
  • Choose fireproof cabinets and locations away from
    general traffic areas.

66
Security of information (Cont.)
  • Keep files and records under lock and key at
    all timessecured from public access.
  • Keep public areas of the practiceparticularly
    the reception areafree of personal or financial
    information. (e.g. Dont call client by name!)
  • Shred all recordings or client documents that
    are no longer needed.
  • Minimum of two locks between file and access..

67
Fees
  • How do you set a fee schedule?
  • (Find out usual and customary in area, may
    check insurance or Medicare payment schedule,
    consider your experience and skill level)
  • The issue of payments is very important.

68
Fees (Cont.)
  • Be sure the client (AND YOU) understand that
    payment is made at the time of the appointment,
    and that any insurance consideration will be
    worked out in advance.
  • Deductables/copays, EOBs

69
Fees (Cont.)
  • Accepting payment for your services may make you
    uncomfortable at first. Do not be. You are a
    valuable professional who is licensed, and
    remember you are solid, knowledgeable, and
    effective.

70
Fees (Cont.)
  • If you consider sliding fee, be fair to yourself.
    Remember It is also a reflection of your
    vision, your self-worth and education. Many
    clients will see your fees as a gauge of your
    value as a professional.
  • Pro-Bono

71
Marketing
  • Provide good service. No network can compare to
    the one you create through the excellence of your
    work. Referrals from satisfied clients may not
    generate immediate referrals, but over time
    increase your client base. (After 30 years in
    Pontiac, I am seeing 3rd generation, presently
    WOM and EAP are my client base!)

72
Building a Client Base
  • Provide personal contact and immediate
    responses to inquiries from both referral sources
    and potential clients to demonstrate your
    interest in meeting their needs.
  • Maintain goodwill with potential referral
    sources and other professionals in the community.

73
Building a Client Base
  • Realize that various other professionals besides
    psychologists may be valuable referral sources,
    including medical professionals, educators,
    social workers, general counselors, employee
    assistance programs, lawyers and social service
    personnel, to list a few.

74
Building a Client Base (Cont.)
  • NETWORK, NETWORK, NETWORK
  • Refer clients elsewhere if you do not have the
    specific skills they require, or provide an
    option of an alternate referral if your waiting
    list is very long. Maintain a referral list of
    other professionals whose work you respect.

75
Building a Client Base (Cont.)
  • Distribute your business cards freely. Make
    them easy to read, attractive and professional.
    Include your name, degrees, license,
    certificates, address, and phone/fax/e-mail
    numbers. (e.g. mine)
  • Send a thank you letter to the referral source
    once you have seen a client and received their
    written consent to do so.

76
Building a Client Base (Cont.)
  • Send an announcement mailing when you first
    establish your practice, or add another
    practitioner to your practice. Realize that this
    may result in very few referrals, but will still
    make your availability known.
  • Contact local business reporter to do a piece on
    something special you are offering. (Horse riding
    therapy)

77
Building a Client Base (Cont.)
  • Hold an open-house to make your availability
    known, thank the people who have supported you,
    to establish a practice, and generally establish
    goodwill.
  • Join the local Chamber of Commerce.

78
Building a Client Base (Cont.)
  • Place your name and perhaps an advertisement in
    the Yellow Pages. Some people look there first.
  • Realize, however, that some people may not
    select a psychologist through the Yellow Pages.
    Know that having your name there indicates that
    you are a bona fide practitioner and provides
    phone numbers and addresses to facilitate contact
    with you.

79
Building a Client Base (Cont.)
  • Be willing to accept interviews from the media on
    general topics in psychology.
  • Have your name placed on a list for speakers'
    bureaus indicating your willingness to give
    presentations and workshops. This makes your name
    known.
  • Volunteer to speak at service clubs, church
    groups, womens groups, etc.

80
Building a Client Base (Cont.)
  • Give your practice a name and a logo. Again,
    this makes your name stand out and is likely to
    be most useful if you are in a joint practice
    with several other practitioners.
  • Serve on various community boards for either
    profit or non-profit societies.
  • Become adjunct faculty for universities,
    community colleges, etc.

81
EAPs
  • Employee Assistance Programs (EAPs) are employee
    benefit programs offered by many employers,
    typically in conjunction with a health insurance
    plan.
  • EAPs are intended to help employees deal with
    personal problems that might adversely impact
    their work performance, health, and well-being.
  • EAPs generally include assessment, short-term
    counseling and referral services for employees
    and their household members.

82
EAPs (Cont.)
  • Employees and their household members may use
    EAPs to help manage issues that could adversely
    impact their work and personal lives.
  • EAP counselors typically provide assessment,
    support, and if needed, referrals to additional
    resources.

83
The issues for which EAPs provide support vary,
but examples include
  • substance abuse
  • safe working environment
  • emotional distress
  • major life events, including births, accidents
    and deaths
  • health care concerns
  • financial or legal concerns

84
The issues for which EAPs provide support vary,
but examples include (Cont.)
  • family/personal relationship issues
  • Partner relationship issues
  • work relationship issues
  • concerns about aging parents
  • An EAP's services are usually free to the
    employee or household member, having been
    pre-paid by the employer

85
/- of working with EAP
  • PLUSES
  • Easy to collect from Contractor
  • Less paperwork
  • Source of referrals
  • No deductibles/co-pays to collect (no
    out-of-pocket for client)
  • Does not require major (reimbursable) diagnosis

86
/- of working with EAP (Cont.)
  • MINUSES
  • May be required to share clients info with
    employer (with clients permission)
  • Can not charge a no show fee
  • May not be able to self refer
  • Eap company is Keeper of the Records
  • Must be able to function in brief model
  • Some EAP companies have questionable fee
    arrangements

87
Insurance
  • Some insurances require that you be on their
    panel
  • Some will pay at lesser rate if you are out of
    network, some not at all.
  • Can often apply through web site (look for
    provider relations)
  • Find out who insures most people in your area
  • BC/BS is usually big

88
Insurance
  • May check with other providers (hospital?) to see
    whom they bill
  • Will need copies of current license, malpractice,
    certifications (e.g. CADC)
  • Medicare is special insurance with own process
    see on line, all electronic billing (central
    management service)

89
/-
  • PLUSES
  • Some referrals if persons covered are seeking
    someone in network
  • Can be reliable source of income
  • You maintain your own records
  • Many accept multiple billing methods

90
/-
  • MINUSES
  • May have to get preapproval
  • Deal with deductibles each year and copays
  • May pay reduced rates to covered therapists

91
Coding Info Needed for Billing
  • The CPT is a uniform coding system consisting of
    descriptive terms and identifying codes that are
    used primarily to identify medical services and
    procedures furnished by physicians and other
    health care professionals.

92
Coding Info Needed for Billing (Cont.)
  • These health care professionals use the CPT to
    identify services and procedures for which they
    bill public or private health insurance programs.
  • Decisions regarding the addition, deletion, or
    revision of CPT codes are made by the AMA.
  • The CPT codes are republished and updated
    annually by the AMA.

93
Coding Info Needed for Billing (Cont.)
  • Because these particular codes mean so much
    income for the AMA, it is difficult to find lists
    of them that are accessible to the public. In
    fact, groups that have tried to make them public
    have been cited for violations and fines by the
    AMA and have been forced to remove them from the
    Internet. Many groups license the lists of codes
    from the AMA, however, and then publish them
    online or in books. They are allowed to charge
    for access since they are also paying that
    licensing fee.

94
CPT (Current Procedural Terminology)
  • Billing service may have them
  • May buy a book from AMA
  • May pay for list on line
  • Most common 90801-intake, 90806-45 to 50 minute
    session.(90804, 90808)
  • Helpful to have the resource for parameters of
    what's included
  • New Health and Behavior codes presently can be
    used by Psychologists

95
Health and Behavior
  • CPT Code
  • (15 min 1 unit)(1 hr 4 units)
  • 96150 Assessment initial
  • 96151 Re-assessment
  • 96152 Intervention Individual
  • 96153 Intervention group
  • 96154 Intervention family w/ patient
  • 96155 Intervention family w/o patient

96
ICD-09
  • What Do the Numbers Mean? ICD-09, ICD-10 and
    Others?
  • ICD codes were first developed in 1893 in France
    by a physician, Jacques Bertillion. They were
    called the Bertillon Classification of Causes of
    Death. In 1898, they were adopted in the United
    States, and were considered, in effect, ICD-1
    because that was the first version of code
    numbers.

97
ICD-09 (Cont.)
  • Since then, as medical science has progressed and
    new diagnoses have been developed, named and
    described, the code lists have been updated. The
    number designation changes when the updates are
    so extensive that a wholesale change needs to be
    made. There may be annual updates, too, but those
    are considered to be relatively minor, and the
    basic code set doesn't change.
  • For example, the upgrade in 1949, ICD-6, was the
    first time mental disorders were added to the
    code set.

98
ICD-09 (Cont.)
  • Most of the codes we see in the United States
    today are version 9, called ICD-9-CM codes. With
    few exceptions, the paperwork we receive when we
    leave a doctors office will contain both CPT
    codes (Current Procedural Terminology) to
    describe the service that was rendered for
    billing purposes, and ICD-9-CM codes to describe
    why that service was provided. Further, most
    death certificates filed since 1977 will have an
    ICD-9 code on them.

99
ICD-09 (Cont.)
  • The most current list of codes in use is ICD-10.
    This list was first used in the United States in
    2007. Minor revisions added to ICD-10 codes were
    made available in early 2009 by the NCHS.
    Globally, most other countries in the world have
    implemented the ICD-10 codes. There are some
    major differences between the two code sets, the
    transition is very expensive, and most American
    providers have not yet upgraded to the ICD-10
    system.

100
But I use DSM-IV-TR to diagnose!
  • Covered Diagnoses Crosswalk of DSMIV
  • The crosswalk is a document designed to help you
    determine which ICD-9-CM diagnosis code (1977)
    corresponds to a particular DSM-IV-TR diagnosis
    code.

101
Do I need to use it?
  • YES!
  • Under the Health Insurance Portability and
    Accessibility Act (HIPAA), insurance companies
    who accept and process insurance claims
    electronically are only required to accept
    ICD-9-CM diagnosis codes.

102
Do I need to use it?
  • Because there is no HIPAA requirement that
    insurance companies also accept DSM-IV-TR codes,
    insurance companies are likely to only accept
    electronic claims that use ICD-9-CM diagnosis
    codes, and which will require psychologists who
    are only familiar with DSM-IV-TR to convert their
    DSM-IVTR diagnosis codes into ICD-9-CM diagnosis
    codes.

103
Where do I find it?
  • http//www.apapractice.org/apo/insider/practice/pr
    acmanage/practice_management/dsm-9.
  • GenericArticle.Single.articleLink.GenericArticle.S
    ingle.file.tmp/Download_the_Covered_Diagnoses__Cr
    osswalk20of_DSM-IV_Codes_to_ICD-9-CM_Codes_chart.
    pdf
  • Or Google Covered Diagnoses Crosswalk of
    DSMIV Codes to ICD-9-CM Codes

104
Mentor/supervision
  • If you decide to start a business one of the most
    important components is finding a trustworthy
    reliable mentor/supervisor who is successful.
  • Can supply needed expertise in business and
    psychotherapy.
  • Can provide needed supervision.

105
Mentor/supervision (Cont.)
  • Can provide access to assessing the current
    professional standard of care.
  • It is also helpful to networking with other
    entrepreneurs/therapists, join in-person and
    virtual entrepreneur/therapist support groups,
    take classes and workshops.

106
Ways to start
  • In the beginning opt for full-time work in an
    agency or institution, but take on a few clients
    privately.
  • This augments income and helps determine if there
    is a market for your skills.
  • This provides guaranteed income and benefits.

107
Ways to start (Cont.)
  • Spend time learning the policies and procedures
    of the entity, including billing.
  • Note you must be careful to avoid any conflict
    of interest, perhaps best achieved through
    completely different referral sources from those
    of the agency. It is also important not to use
    agency time to build your practice.

108
Ways to start (Cont.)
  • Another alternative is to join a functioning
    professional practice as an associate to gain
    awareness and experience prior to establishing an
    independent practice.
  • This also provides a safety net of sorts.
  • Exercise the same care regarding conflict of
    interest as you would if working in an agency or
    institution.

109
Ways to start (Cont.)
  • Opt for a clearly delineated part-time
    roleworking half-time at an agency and half-time
    in your own practice.
  • This is advantageous, as you have some guaranteed
    income, but can have more energy available to
    devote to building your referral network. Again,
    take care to avoid any conflict of interest.

110
Ways to start (Cont.)
  • Opt for full-time practice, while understanding
    the financial risks involved.
  • Perhaps the best way to ensure viability is to
    ensure that you have some guaranteed funding,
    such as obtaining a contract for a block of
    service provision, or a part-time teaching
    position.

111
Ways to start (Cont.)
  • Guaranteed funding ensures that bills will be
    paid during the time that you are building your
    referral network and a steady client base.
  • Be creative in developing an option that best
    suits your skills, strengths, energy, need for
    security and present circumstances.
  • Have a clear idea of anticipated costs and
    potential income.

112
My Advice
  • Dont quit your day job!!!
  • A new business can take up to 5 years to turn a
    good profit!

113
My Advice
  • Expect to spend a great deal of time developing
    and running a private practiceboth in serving
    clients and in marketing and running the
    business.
  • Careful planning and preparation is crucial and
    takes time.
  • Have financial resources available to your
    business.

114
My Advice
  • Be prepared to work hard at getting started,
    getting known and encouraging referrals.
  • As your practice enlarges, decrease your other
    commitments.
  • GO FOR IT! YOU CAN SUCCEED!!!!!
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