The Business of Starting a Private Practice

by Jeann Linsley, CSW

You've just completed your second year in your first post-graduate social work job. The paperwork is killing you. Supervisors are hounding you. Your salary is barely supporting you.

You begin making inquiries about private practice, starting your own business so that you can finally free yourself of the frustrating constraints of agency work.

You have to get on a managed care panel, says one colleague. But the panels often are jammed to capacity, says another. And you probably won't get on the panels, because you don't have enough experience, says another seasoned private practitioner.

You have to have lots of supervised agency work, take special courses, and be supervised for a specific number of hours by a licensed mental health professional or social worker. And fiscal cutbacks are making it harder to find quality supervision in agencies.

If you've just received your master's degree, you might be able to open a private practice legally-if you live in Minnesota or New York. But even in Minnesota, laws are getting stricter. And insurers might not reimburse you, because of your inexperience. Besides, professionals in the field discourage brand new graduates from going immediately into private practice.

Is this how Sigmund Freud started?

The reality of the 1990s is that social work graduates who are thinking of entering private practice will have to clear not only the hurdles of managed care, but will face all the usual challenges of starting their own businesses and obtaining the supervision and credentials necessary for a private practice.

Before even thinking about managed care, new clinicians need to start by finding out what credentials and training are required or recommended, say experienced practitioners.

Most states require new private clinicians to have at least two years of supervised post-master's experience, says Elise Young, of the National Association of Social Workers headquarters in Washington, DC.

Some practitioners recommend even more training.

Sheila Peck, LCSW, a private practitioner and a consultant on practice-building for clinicians, recommends that anyone starting a practice have at least five years of supervised agency practice.

"We discourage people coming right out of school," says Peck, whose private practice is on Long Island, NY.

Peck, who is public relations chair for the New York State Society for Clinical Social Work and serves on the marketing and public relations committee of the National Federation of Societies for Clinical Social Work, Inc. (NFSCSW), also emphasized the importance of credentials, even though in some states, including New York, these are not an absolute requirement for a private practitioner.

Credentialing requirements vary from state to state, and some states are making their requirements stricter, says Young.

New York does not require a specific license for private practitioners, but some professional organizations recommend the BCD, or Board Certified Diplomate, an advanced clinical credential awarded by the American Board of Examiners in Clinical Social Work. To obtain the BCD, a clinician must have six years of supervised experience and must pass a test and pay a fee, according to Peck.

In New York, the Federation also recommends that private practitioners have an "R" number, which documents that a Certified Social Worker has had six years of supervised psychotherapy experience. All insurance companies in New York State that provide mental health coverage must cover Certified Social Workers who have an "R" number.

Other states have varying requirements or recommended levels of training and credentials. In California, you can't hang out a "counselor" shingle without first having two years of post-master's degree experience under the supervision of a licensed social worker or a licensed mental health professional, passing an exam, and taking special courses in child abuse/neglect, human sexuality, and other subjects, says Young.

In Minnesota, the required credential for private clinicians is the Licensed Independent Clinical Social Worker (LICSW). To obtain that license, private practitioners must have a minimum of two years of post-graduate employment, also under the supervision of a licensed social worker, according to Chad Breckenridge, president of the NFSCSW.

Minnesota law does not allow new master's degree graduates to engage in private practice without having the two years' experience, Breckenridge says. However, insurers might be reluctant to reimburse these newcomers, and a recent case before the Minnesota licensing board questioned the ethics of allowing new graduates to practice, he says.

In Georgia, private practitioners must present evidence of having practiced clinical social work for a minimum of 3000 hours (slightly over a year) post-master's, and also show that at least 2000 hours were completed under supervision.

Depending on the state requirement, new clinicians can gain much of their post-master's experience in a post-graduate training institute.

Post-graduate training institute programs can be invaluable to new clinicians, says Peck. Many private practitioners have attended institutes which offer training in different kinds of therapy and counseling.

In New York, there are dozens of such institutes, and practitioners who have used them recommend them highly.

"Most clinicians that I know have attended an institute of some kind. Managed care is more and more requiring that. They ask for proof that you have attended an institute," says Peck, who attended a three-year family therapy institute.

In choosing an institute, a prospective student should consider several factors, including cost, time, class schedules, and most importantly, whether it fits their interests. While many New York institutes emphasize long-term psychotherapy, there are institutes for short-term solution focused therapy and brief dynamic therapy, family therapy, child and adolescent therapy, spirituality and psychotherapy, and other specialties.

"Go there and talk to students. Try to make it a good match," says Diane Greene, a clinician who has a practice in New York City. She also recommends talking with instructors and attending events that are organized by the institute.

Prospective private practitioners also need to find competent supervision from the time they graduate, say private practitioners. Finding the right supervision is getting more difficult, because agencies are cutting back and cannot give new social workers regular supervision, says Peck, who is involved in an effort to organize private practitioners to voluntarily provide supervision to newer social workers.

Greene also has organized a supervision referral network which provides supervision at low cost.

Finding referrals is another challenge for new private clinicians. Many private practitioners start seeking out referrals while still in their jobs. Also, "if you've gone to an institute, you can get some referrals from there," says Peck.

Greene says she started her practice with one client. She charged the client $20.

A year later, Greene still had only one client, but her practice picked up after she attended a training institute and began marketing her services. After three years of working in agencies and performing fee-for-service work to subsidize her practice, Greene quit her other jobs and began devoting all her time to the practice.

To obtain referrals, new private practitioners also must have-or must acquire-business and networking skills, says Peck.

To be successful in private practice, Peck says, new clinicians must be confident enough in themselves to promote their services, and assertive and outgoing enough to stave off the isolation of solo practice. Private clinicians must join societies, supervision and mentoring groups, and other groups that put them in touch with colleagues in the private practice arena, she says.

Greene says the toughest part of solo practice for her was mustering the confidence to sell herself.

"The therapist has to think of him or herself as a business person. You can't just rent a beautiful office and wait for business," says Peck. "You've got to do some marketing."

Peck recommends developing "niche markets," or specialized areas in which social work interventions can make a difference. For example, one of Peck's colleagues decided to make house calls, a rarity in the medical and mental health fields.

Another group of social workers decided to ally themselves with a group of Park Avenue physicians and work with medical patients who have difficulty following up with medications and other treatments that their doctors prescribe.

A third colleague of Peck's decided to work with spouses of abused women.

Part of business acumen is networking, says Peck.

To start your network, identify networks that already exist in your life, she says. Then "network your networks," or put the different groups in contact with each other, with you as the intermediary. By facilitating connections like this, you will become known and remembered by the individuals involved, she says.

New clinicians can also simply set up a "networking" appointment with professionals he or she is in contact with anyway-doctor, therapist, chiropractor, massage therapist, or dentist-to tell them about their services.

Finding clients by getting onto managed care "panels," or insurers' lists of preferred providers, could be a struggle for a new clinician, says Peck.

Your chances of getting on panels depend on whether your particular niche is one that insurance companies feel meets their need. And "they want to make sure you're licensed," Peck adds.

"New graduates probably won't get on panels, unless they have a real valued specialty. It's pretty tough to get on the panels," Peck warns.

However, it is simple to apply to be a Medicare provider, she says, and new clinicians should sign up immediately upon starting a practice.

Peck also suggests obtaining a copy of Psychotherapy Finances, a monthly newsletter which lists names of insurance companies who are looking for providers.

Peck emphasizes that there are many self-payors who have used up their benefits, or who don't want to be on record with an insurance company as consumers of mental health services.

Like credentialing, insurance reimbursement rates for private clinicians vary from state to state. In New York, the rate is approximately $65, between clients' co-payment and what the insurance company will pay, says Peck.

"It varies from 50 to 80 percent," says Young, of the NASW. Some managed care companies have maximum per session payments. "You may be charging $75 per hour, and the insurance company may only pay you $40."

Breckenridge says the reimbursement average in Minnesota fluctuates between $65 and $85 per session.

Many prospective private clinicians are drawn by the lure of higher salaries. And individuals in private practice are among the highest paid among social workers surveyed in 1995 by the NASW. Private practitioners in the survey grossed an average of $42,000 to $45,000, compared to the overall median social work salary of between $30,000 and $35,000.

Greene says private therapists can expect to make $90,000+ a year if they log 30 patient hours per week and get an average of $75 per session.

"People can make $50,000 to $80,000 a year without really knocking themselves out," she says.

However, insurance benefits and other office expenses can cut a large chunk out of the earnings of clinicians in private solo settings, says Philip Schervish, a Howard University professor who conducted the survey for NASW.

Psychotherapy Finances also contains information on salaries and other financial aspects of private practice, says Peck.

Beyond the lure of money, private practitioners agree on the non-tangible rewards of working with people, unencumbered by the bureaucracy of an agency setting.

"It's very challenging in terms of getting a reputation and building on that. But it's incredibly rewarding. And there will always be people who are looking for good therapy, regardless of insurance coverage or managed care," says Greene.

Jeann Linsley, CSW, is a freelance writer and social worker in New York City.

Copyright © 1996 White Hat Communications. All rights reserved. From THE NEW SOCIAL WORKER, Fall 1996, Vol. 3, No. 2. For reprints of this or other articles from THE NEW SOCIAL WORKER (or for permission to reprint), contact Linda Grobman, publisher/editor, at P.O. Box 5390, Harrisburg, PA 17110-0390, or at linda.grobman@paonline.com.