Opening a Private Therapy Practice 3: Contact Information, Malpractice Insurance, and your W9

You have made it this far! This is fun right? Sure, it is a lot of work and logistically complicated; but I promise you can do it. After getting your NPI and EIN numbers(refer to Part 1), and office space squared away (refer to Part 2), you are ready for the next steps! This is the final entry in a three-part series on Starting a Private Practice, and if you have not read through the other articles, I highly encourage you start with them.

What does contact information, malpractice insurance and your W9 have in common to be included in this one post? Absolutely nothing. I am going to be honest with you, there are a thousand moving pieces that you will need to keep track of while in this process. I just don’t want you to forget these pieces because they are all important!

Phone and email contact information for your therapy practice

First step is to create a contact phone number! You will need a phone number that you feel comfortable sharing with clients and strangers. It is probably best not to use your personal contact information here; although many old school therapists do this. I imagine 99% of the time it is fine to use your own number; but that 1% might be a client with poor boundaries that calls late in the night. 

There are many ways to set up a new phone number, or even purchase a new phone with a new plan. I personally appreciate the Google Voice option. If you have a Gmail account, this is a free service that takes seconds to set up. It is controlled by an app on your phone, and to anyone calling, it functions as if it is a regular phone number. You can also manage settings on how and when you would like to receive your phone calls.

Next step is to establish an email address. There are many services to create a new email contact. The most important thing to keep in mind keeping your emails HIPPA compliant. Should you encrypt your emails? Yes and no. If you are using a service like Simple Practice, patients have the ability to communicate and submit their Protected Health Information (PHI) via their patient portal. But if you are communicating with other providers and health insurance companies, you should definitely encrypt your emails. Most insurance companies have their own version of this, or they require you to use fax (yes….fax). Why encrypt your emails? Unfortunately we live in a world where hackers reign, and your emails can be intercepted in transit, or even resting in your inbox. There are many options for sending an encrypted message. I have found Proton to be easy to use, and the basic plan is free.

Faxing in the twenty-first century: why a therapist needs a fax number

I’ll be honest, I have no idea how to get a fax machine and set it up. But I do know how to download an app. There are quite a few apps for faxing sensitive content; I use GeniusFax. It is not free, but I am able to keep my own fax number and buy fax pages as I need them. On occasion I have been asked for my fax number, and some insurance companies prefer this method over encrypted emails.

Don’t be caught in the awkward position of looking like you think you are too cool for a fax number. You are not. But you don’t need to carry around a 30lb fax machine, just use your millenial savvy brain and download an app. No one has to know.

Malpractice insurance for a self employed, private practice therapist

The American Bar Association states that America has one lawyer for every 240 residents. The American Psychological Association reports that about 2% of psychologists will face a malpractice suit at some point in their career. This is why malpractice insurance is required and necessary. You will not be able to move forward with your business plans until this is set up, luckily this also can be done in minutes, and is relatively inexpensive ($200-$300 a year). Worst case scenario, if you end up in a lawsuit situation, your malpractice insurance will cover you and protect your personal assets.

I cannot advise on which malpractice insurance company to choose, but I can say that you will need at least $1 million of coverage for each incident, with $3 million in aggregate coverage (heaven forbid you have multiple suites against you!). This is actually the bare minimum. Health insurance companies will not consider you for their network unless you have at least this amount in malpractice coverage.

Insurance companies require you to provide a W-9 tax form

The W-9’s full name is the Request for Taxpayer Identification Number and Certification. This is a one page document that can easily be found on Google; and it will take three minutes to fill out. Insurance companies plan to reimburse you for your services, and they are required to file a 1099-MISC. They will use the information on your W-9 form to verify that their information is correct on their own tax documents. Come January insurance companies that have paid your for claims will mail you their documents, and you can use these on your taxes (or you can use a service like Simple Practice to keep track of your income).

Congratulations! You can officially begin practicing in your own therapy practice! But wait? What about scheduling intakes? Credentialing with insurances? Getting paid? Our work is far from finished. But if you have completed all of the steps on posts 1, 2 and 3, you are well on your way!

TL;DR

You need a phone number, email address, resource for sending and receiving PHI and a fax number for potential clients and insurance companies to contact you.

Malpractice insurance is a MUST and it relatively inexpensive. It can be purchased in five minutes with a number of companies online.

Even if you don’t understand all of the tax documents and obligations, you need a W9. This can be found online.