How to Start your Private Therapy Practice in Arizona
Tired of seeing ads that funnel you to expensive coaching programs and online courses, scrolling and clicking through ad copy that tries to relate to your experience from a person who is transitioning from therapist to coach? Had enough of being added to newsletters and mailing lists to access content that you already know? Are you looking for a simple breakdown of the steps to start your private therapy practice?
I’m a professional counselor with a background in industrial engineering. As an engineer, I emphasize lean design by simplifying processes and eliminating waste (muda). I’m also on a vendetta against hierarchical systems that exploit labor, which is why I strongly urge therapists to form private practices so they can work fewer hours and earn higher incomes. The following is what I hope to be a clear, concise, and comprehensive guide on how to start your private practice in Arizona.
Choose an entity name and purchase a domain name
You can purchase your web domain through GoDaddy, Bluehost, or Domain.com. If you host a website through Squarespace or Wix, you can purchase the domain directly through them.
Choose a form of business
Determine if you will be a Sole Proprietor, Partnership, Limited Liability Company (LLC), Professional Limited Liability Company (PLLC), S-Corp, C-Corp
Check out Simple Profit’s blog post on factors to consider when forming a business type.
Form your business with the Arizona Corporation Commission (ACC)
The ACC includes a 10-step guide to starting a business in Arizona.
Form your business here.
Obtain a local business license
My business is located in Scottsdale, which requires a business registration license. Phoenix does not require a general business license. Check with your city for licensing requirements.
Obtain an Employee Identification Number (EIN) from the IRS
It is helpful to establish your business with an EIN when you open your business, as transitioning in the future will be more complicated. Using an EIN replaces your social security number when conducting business. The IRS includes a questionnaire to determine if you will need an EIN.
Apply online. You will be given the number immediately if you complete your application online.
Open a business banking account
Keep your personal transactions separate from business transaction.
Open a business credit card to make purchases through your business.
Bank of American, Chase, Capital One, Citibank, Wells Fargo, and US Bank have Zelle integrated into their banking systems. Opening a business account significantly increases your daily transfer limits, which may be necessary if you open a group practice and pay contractors.
Set up EFT/ERA with individual insurance payers.
Determine your method of bookkeeping and accounting
Check out Simple Profit’s blog for additional information.
Wave offers free accounting software. QuickBooks has several plans. For simpler accounting, you may choose to use a spreadsheet.
Obtain a National Provider Identifier (NPI)
An NPI is required by HIPAA in the administrative and financial transactions of health care providers, health care plans, and health care clearinghouses.
You will need to an NPI to contract with insurances.
Obtain your NPI through The National Plan & Provider Enumeration System.
Obtain an NPI 1 for yourself as an individual and an NPI 2 for your organization/group.
Purchase Insurance
Professional Liability: Healthcare Providers Service Organization (HPSO), CPH & Associates, NASW Insurance Company, and American Professional Agency all offer excellent coverage options.
General Liability: protects businesses from claims that result from normal business operations. Business liability insurance policy for protection from bodily injuries, medical payments, advertising injuries, and more.
Workers’ compensation: Workers’ compensation provides medical expenses, lost wages, and rehabilitation costs to employees who are injured or become ill “in the course and scope” of their job.
Select an Electronic Health Records (EHR) system
You may choose to use paper records, but I strongly advise against it. Your EHR will enable you to easily reconcile payments, file insurance claims, and securely maintain clinical documentation.
Simple Practice (get $200 off), Therapy Notes, Office Ally, and TheraNest are strong EHR systems.
Obtain a secure, HIPAA compliant business phone line
Google Voice is HIPAA compliant with a Business Associate Agreement within G-Suite.
Obtain a secure, HIPAA compliant business email
Hushmail provides HIPAA compliant and encrypted email service.
G-Suite is HIPAA compliant with a Business Associate and includes options to send confidential email. Use the Virtru Google Chrome extension to ensure end-to-end encryption.
Build your online presence
Create a professional website.
Squarespace, Wordpress, and Wix are strong options for building a website, with professional templates and styles.
Hire a graphic designer to make your logo. Fiver and Upwork offer low-cost professional graphic design services.
Use Dall-E to create AI generated images.
Use Canva for free graphic design tools.
Claim your business on Google.
Make sure to thoroughly complete your profile so you show up on local searches.
Update your LinkedIn profile
Build a FaceBook business page
Join an online directory
You will likely not show up on search engines when you start off, so it is a good idea to join at least one directory for mental health professionals.
Psychology Today is first in search engine optimization (SEO), so you will likely generate the most leads from this directory. Good Therapy is another strong option. Therapy Den is an emerging free option. Online Therapy is a good online only option. If you are looking for referrals, want to offer affordable counseling, and want to avoid insurance, try out Open Path Collective.
Hire a professional photographer for your headshot.
Learn how to craft an impactful profile for your practice
Apply for insurance panels
Headway is an independent practice association that can help get you credentialed through their group in less than thirty days. They manage admin and billing work like benefits verification, claim submission, and payment collection. They also help clients navigate their benefits before each session. If interested in their service, please use my referral link here to set up a meeting (please note that I receive a referral bonus if you use my link).
Over-reliance on Headway for client acquisition and business operations could leave therapists vulnerable if the platform changes its terms of service, increases its fees, or experiences technical or financial difficulties. Therefore, it’s extremely important to secure your own contracts with insurance payers in addition to using Headway’s service (see instructions below to secure your own contracts).
Create a profile with CAQH Proview. Most insurance panels will require a completed profile and pull your information to credential your practice. Check out SonderMind’s instructional guide for completing the CAQH profile.
You will need the following information to complete credentialing:
CAQH number
NPI and enumeration date
Copy of professional license, license number, and effective date
Social security number or EIN (Tax ID)
Date of birth
Updated CV/resume
Malpractice Insurance
Credential with Blue Cross Blue Shield here.
Credential with Optum/United Health Care here.
Credential with Aetna here.
Credential with Cigna here.
Expect credentialing and contracting to be complete within 6-8 weeks, at a minimum.
Learn more about CPT codes in mental health here.
Pay estimated taxes
You need to pay taxes to the federal and state government every quarter. Failure to do so could lead to penalties.
Pay the Internal Revenue Service (IRS) here.
Pay the Arizona Department of Revenue here.
*Please let me know if there is anything helpful that can be added. We want to have a comprehensive guide and it is possible some nuances have been overlooked.
