In today’s article, we’re delving into the process of establishing a mental health private practice that generates an annual income of $110,000, breaking down the timeline, requirements, and the realistic math behind this endeavor.
Firstly, let’s debunk the myth that a private pay practice is the only route to a substantial income. Contrary to popular belief, 92% of Americans use or have insurance for therapy services.
By embracing insurance in your practice, you tap into the largest pool of individuals seeking therapy, creating a steady influx of clients.
Insurance connects you with the biggest group of people who need therapy.
Watch The Video Presentation (16 Minutes)
Crunching the Numbers
The perceived complexity of reaching a $110,000 annual income is dispelled when you break down the math. At $9,124 per month, achievable through 24 sessions a week at an $87 reimbursement per session, the question becomes, can you handle the workload?
The key goals include reaching 24 sessions per week, accomplished through effective credentialing, seamless billing, and a focus on delivering quality therapy.
Goal #1: Clients: 24 Sessions / Week
New Question: How do we get 24 clients per week in our practice?
Answer 1: Credentialing
Answer 2: Seamless Billing
Answer 3: Quality & Craft / Retention & Referrals
Goal #2: Reimbursement: $87/Session
New Question: How do we earn $87/session
Answer 1: Credentialing
Answer 2: Coding + Billing
Bonus: Renegotiate Your Rates
Navigating Insurance Challenges
Dealing with insurance may seem time-consuming, but it’s a crucial part of building a successful practice. While you can handle billing yourself, consider outsourcing to a service like TheraThink. This ensures accuracy and frees up more of your time to concentrate on what you do best – providing therapy.
Credentialing and Coding Best Practices
The credentialing process spans the first six months, involving applications to five insurance companies in the initial month. Coding best practices include accurate coding for specific situations, using appropriate CPT codes, and reflecting specified diagnoses in session notes for future reference. [See Video]
Mapping Out the Income Growth
By consistently adding two to three new clients per month while managing client turnover, you can steadily increase your sessions and income. This structured approach allows you to hit the $110,000 mark within a year.
Again, the goal here is +2-3 net new clients per month, for 12 months. You get there via credentialing, accomplishing +1 new client per insurance contract per month.
Bonus Tip: Renegotiate your rates!
Focusing on Quality Service
While the journey may involve negotiating rates and managing billing, your ultimate focus is on being an exceptional therapist. Your success lies in providing high-quality care, continually educating yourself, and creating a systematized practice for sustained growth.
Build in systems and processes to ensure you can automate as much of your practice as possible. Outsource and delegate where manual work is required and your personal touch is not important — think insurance billing vs scheduling.
In summary, achieving a $110,000 annual income in your mental health private practice is feasible by getting credentialed, mastering billing processes, negotiating rates, and consistently adding new clients. If you encounter challenges with the insurance component, services like TheraThink can provide support.
I hope this guide breaks limiting beliefs and empowers you to kickstart or elevate your practice. Wishing you a successful and fulfilling year ahead!