Part II: Expanding to a Psychotherapy Practice Group

Developing a Business Plan

• Mission, Values, Vision: During my time as a senior director at UPMC's inpatient hospital, it became clear to me the sole foundational factor in the values of my staff was reliability. If I have to look over your shoulder, nothing else matters. If you do a great job 75% of the time, and then stuff doesn't get done, I'd rather do it myself. If you do a solid job 100% of the time and tell me when you need help, I will continually reinvest in you. We have a clear mission to contribute back to our community, to be diligent and competent, to invest our attention, and to be reliable.

  

  
  

• On-boarding: Create a live-document guide of everything a new hire must know and do. Review it with them at on-boarding, encourage them to keep it accessible for reference, and review as necessary.

  
  

• Expectations: Set clear expectations of what can be expected of you as the practice owner and what you expect of your hires. Decide if they will be 1099 (and what the state stipulations are for this) or W2. If W2, what are the benefits, and how much will they cost per employee? Some practice owners fear the risk of audit if hiring 1099 contractees, so know the stipulations - some rules are federal defined by the IRS and some are devolved to the state level. A basic way to understand this is in terms of expectations and benefits. A contracted person is their own business, and while sometimes the world "employee" is still used, we cannot treat their position like that of a W2 employee: you don't set their hours or employee-like expectations, yet you also cannot provide them with benefits. Consider consulting legal guidance. 1099 allows you to pay more, and offer more independence, but might box out people who don't have a partner with a job that provides benefits.

  • Hours or number of clients per week?

  • What is your availability?

  • Do they pay for any infrastructure like EHR, website / marketing and taxes, credit card transaction fees, claim submission fees, claim reimbursement recovery, credentialing, etc.

  • Monthly, weekly and daily responsibilities, including how clinicians collect outstanding balances.

  • Payout Rate: most practice groups pay 60% (less if not licensed), but I pay 70% assuming hires adhere to the reliability expectations - if they don't, they can buy more of my time and receive 60% payout.

  • How long is the contract for? We specify 1-year after truly being up and running with a nearly full caseload.

  • Regular meetings to review expectations following best practices management and supervision guides.

  
  

A calming therapy room designed for comfort and tranquility.

Building a Team for Group Practice

If you're setting up a group practice, hiring the right team is crucial. To create a nurturing environment, consider these steps:

• Hiring: Select therapists who align with, yet diversify your vision and values. Hire within your network as possible - my first hire was a former doctoral supervisee and he has also recruited classmates to join. Discussed expectations - for me, reliability is always part of the discussion.

  
  

• Supervision: Clinical and administrative supervision can be important. I payout higher than competitors but also charge for clinical supervision (both in and outside of my practice group), but also offer additional support at no charge (ie., quick questions that need an answer that evening). I provide administrative supervision free such as how to do things on the EHR or billing questions, but also regular, such as quarterly, reviewing if we are meeting our respective expectations and job satisfaction.

  
  

• Team Culture: Cultivate a supportive environment. I encourage consulting each other, sharing referrals, and getting together both socially and for group clinical supervision, case review or education.

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Financial Management

Most psychologists are far from being strong business people or accountants. I found it very difficult to gauge monthly costs as I built my group practice. There are increased costs, but several months until new hires are making money, plus you will likely hold off on filling any openings in your schedule as you take on more admin roles. You could hire someone to do this, but it is another cost and may not be worth it until you have several clinicians across which the cost is ameliorated.

• Budgeting: Develop a budget reflecting your operational costs, and how much you might want to invest in marketing on top of basic costs you've already decided on (EHR, website, claims and credentialing etc).

  • Your EHR will likely have a per-clinician cost

  • Increased marketing: whenever I hire, I re-invest in marketing both for the company broadly and often for that specific clinician. I don't know if I agree with this, but when hiring marketing, a rule of thumb I heard repeatedly was to expect $500 in Google ads to fill a new hire's caseload. I've leaned more on Facebook ads than Google as of late.

  • Credentialing costs

  • Claims costs: Simple Practice is $0.25 / claim after the first 35 each month, plus I pay 6% for recovery of denied or rejected claims (to a claims specialist) and about 3% credit card processing fee. It is not uncommon to pay 6% of all claims or income for end-to-end management, or a flat fee depending on your practice size.

  • Tax on some of these costs (namely the EHR).

  • Professional Email: Zoho mail has a free version, but there are many options and I found it a bit confusing. I switched to Google Workspace - there is usually a trial promotion and plans start at $7/month.

  • Phone with IVR or Auto Attendant: Interactive Voice Response is a phone system that redirects callers based upon voice commands, such as "welcome to Weingarden Psychological Services, state the name of the therapist you are trying to reach," while auto-attendant usually refers to "press 1 to reach Dr. Weingarden..." These plans start at $10/month metered or $15/month flat rate from Zoom, or if you want an all-in-one suite, add Google Voice for $20/month to Workspace. This has significantly cut down on the spam calls or calls for other clinician's caseload who called me by default.

• Payout: I do a monthly payout, setting Simple Practice to automatically generate an income allocation report. I also review the general income report which also includes fees, which is important at least insofar as budgeting but also if you expect your clinicians to pay these a part of these fees, you need to subtract a portion of it from their income (from the income allocation report), and any other fees they are responsible for per your contract. I use Melio.com for ACH payments to clinicians and other vendors, which is free unless you use upgraded options.

  • Remember, you must send your contracted clinicians a 1099 tax form at year's-end. They are simple to file manually, but Melio can do it with a premium membership (which also lets you request W-9 information rather than manually entering it).

  • Some practice pay a lower percentage AND charge for these costs, some cover the costs. I personally think it makes sense to split costs for things like claims management as I see this as an extra expense that we want to ideally avoid by collecting accurate information ahead of starting with new clients and retaining clients (we don't have claim issues with existing clients once we've ironed out any hiccups). While the cost is fairly nominal, it incentivizes clinicians to be thoughtful about this and aware of the costs of the business. Since we pay based upon reimbursement (insurance and whatever the client owes), part of getting that money is the claims management.

• Sources of Income: Do you also do assessment, consultation, or outside clinical supervision? Can you also offer those opportunities to your employees? I encourage my employees to supervise either trainee therapist or recruit new hires and offer them financial benefits to doing so. If you have a successful blog, social media or YouTube, it can be monetized or selling digital resources.

• I describe my business model as essentially renting out my infrastructure (and brand) and contracted clinicians can run their own business under mine so long as they adhere to basic ethical and company-value expectations. As part of this, I offer my clinical and administrative guidance.

• "Non-Compete": While a formal non-compete may no longer be legal, many practices still have clear language in their contact legally prohibiting clinicians from leaving with their client caseload. I empathize with a practice owner who knows the cost and effort of recruiting and filling a caseload, and then potentially losing those clients, the cost of re-hiring, credentialing and re-training a new clinician and building a new caseload. But also consider the cost of these legal parameters. It doesn't feel good to be boxed into a job, to have to consider leaving clients you've come to care for and empathize with, and doesn't make the client happy if they think they have to stop working with their therapist because of your agency. Some may stay with you, many will still follow their therapist to their new job out of their volition (which is completely legal regardless of anything in your contract), but many won't be pleased if this transition is made difficult. Many practices specify that a clinician cannot "poach" clients by soliciting them to follow them to their new job. I agree that a clinician shouldn't come in with the intent of doing so, but I also hope to create a culture in which clinicians want to stay - if they are leaving for another local agency, is there something I can do better? I willingly coach my clinicians during supervision on aspects of running their own practice - they will learn this if they want, so why not create a good culture and hope to maintain them because of what I offer - the culture and infrastructure, rather than by legal binds? Its sadly not too uncommon I see posts that a practice owner/manager found out that a clinician was poaching clients - while there is no excuse for this behavior, we can also ask ourselves about our hiring process (maybe get more internal recruitment), morale and culture (which will also improve internal recruitment), and tangible means of retention. I personally believe and appropriate transition conversation looks something like, "I've made the decision to move on from Weingarden Psychological Services, and will be starting my own practice - I want to give you some time before then to consider your options. You can stay with WPS and we will help match you with a new therapist who, if you would like, can review my notes before your start treatment. Alternatively, we can continue to work together at my new practice. Of course, you may also choose to go another route, such as if you wish to take a break from therapy or continue therapy elsewhere. Let's keep discussing over the next few weeks before I transition." I do expect (per contract) clinicians to stay with our practice for about a year after about filling their caseload.

An inviting outdoor therapy space designed to promote mental wellness and relaxation.