Psychologist Starting a Practice - New York State: Procedures
We provide a 12-step checklist regarding the steps a new psychologist would need to put in place in New York State to start a practice. The checklist includes license requirements, accessing the budget, insurance panel participation, malpractice insurance, tax and legal advisers, business entity formation, EIN, self-employment taxes, consent for services, notice of privacy practices, authorization for credit card use, and becoming an out-of-network insurance provider.
Starting a new practice, here's a checklist of things you need. We provide each step as a separate point for maximum clarity. Some sources we use are older than the standard Wonder guidelines of 24 months. However, we use them as they give all the details provided, and we found no other more recent sources or any other information would disprove their accuracy. For both sources that are older, we provide examples of their accuracy confirmed in 2016, and 2018.
1. License requirements
To obtain a license as a psychologist in the New York State, a person must be:
1. Of good moral standard
2. At least 21 years of age
3. Meet examination, and experience requirements. Experience requirements constitute of having at least two years of full-time supervised experience, while examination requirements constitute of having passed the examination for "Professional Practice in Psychology (EPPP) developed by the Association of State and Provincial Psychology Boards (ASPPB) with a converted score of at least 75 as determined by the State Board for Psychology".
The fee, as of November 2016, for obtaining a license is $294, and the fee for a limited permit is $70.
2. Assess the budget
In order to set up a practice, the psychologist should be ready to determine their start-up budget by assessing expenses and sources of funding. Some possibilities of funding include taking out a loan, using your own savings, or finding investors.
3. Insurance Panel Participation and malpractice insurance
If you plan on accepting insurance as part of your practice offering, signing up for local insurance panels should be one of the first steps. A $1 million or a $3 million malpractice policy is mandatory for private practice, depending on the type of practice.
Malpractice insurance is set up by opting for one insurance company that will then require all the paperwork in order to set up your policy.
4. Secure Tax and Legal Advisers
In order to turn a practice into a legitimate business venture and a long-term investment, it is best to partner up with an accountant to handle your taxes, and an attorney to be your legal adviser.
5. Business Entity Formation
Setting up a PLC or LLC allows the owner of a practice to have limited protections for their personal assets in case bad things happen within the practice.
EIN in an Employer Identification Number which is obtained from the IRS.
7. Self-EMPLOYMENT TAXES
After opening up a practice, you will responsible for paying self-employment taxes. Many practitioners only realize this after they already have been working for a while, which can lead to financial trouble. Therefore, it is recommendable to set aside the necessary funds to cover the taxes.
8. Consent for services
Consent for Services (also known as Service Contract) is a package that allows you to take in new clients. In order to accept clients at the practice, a psychologist needs to have a new client packet which consists of consent forms and a release of information form.
9. Notice of Privacy Practices
Notice of Privacy Practices is a document that tells your clients "what you will do with their protected information and describes their rights related to that information. You must obtain authorizations from your patients before you can use and disclose their protected health information under certain circumstances. You must have procedures in place that will enable patients to access and amend their health information, and you must be able to provide patients with an accounting of disclosures you have made regarding their health information upon their request".
10. Authorization for Credit Card Use
This easy authorization can be obtained online and allows you to accept credit card payments. After setting up the authorization, it is necessary to contact a bank to provide you with necessary equipment for collecting payments.
Treatment Plan Template and Progress Note Template is necessary for practitioners to keep track of their clients.
12. Out-of-Network Insurance Provider
It has become increasingly difficult to get on insurance panels, which is why numerous practitioners have decided to proceed with out-of-network insurance: "If you are a licensed clinician, all PPO insurance plans with out-of-network benefits will consider you an out-of-network provider".
The checklist for setting up a psychologist practice in New York State includes malpractice insurance, establishing a business entity, attaining license requirements in NY, determining the focus of the practice, and evaluating tax liability.