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Starting a Mental Health Care Practice

There are many career offerings in the mental health services field. You may choose to offer counseling services. You can work with those with disabilities, substance abuse issues, or other mental health issues. You can work in private practice or the public health field. Or, instead of offering direct health services, you may use your education to provide advocacy services.

A range of opportunities are available for those in the mental health field. These include:

  • School psychologist
  • Clinical psychologist
  • Family therapist
  • Licensed Professional Counselor (LPC)
  • Licensed Mental Health Counselor (LMHC)
  • Licensed Clinical Social Worker (LCSW)
  • Licensed Master Social Worker (LMSW)
  • Licensed Marriage and Family Therapist (LMFT)
  • Mental Health Nurse Practitioner (MHNP)
  • Psychiatrist (M.D.)
  • Doctor of Psychology (Psy.D.) in Clinical Psychology
  • Doctor of Philosophy (Ph.D.) in Clinical Psychology

There are many types of mental health licenses to choose from. Choosing a suitable license for your career in therapy, counseling, social work, or human services can be daunting yet exciting.

This article guides mental health professionals in starting a small business. It provides essential information on what steps to take to ensure you're addressing any issues as you open your new practice.

Licensure Requirements

Medical professionals, including mental health professionals, have licensing requirements. State law determines the particular healthcare field.

In general, you'll find the following career paths:

  • Getting a master's degree in mental health counseling can allow you to become a counselor
  • Earning a doctoral degree can allow you to diagnose and provide therapy and treatment plans or focus on clinical research and analyzing data
  • A medical doctor can diagnose mental health disorders and prescribe medication

It's a given that you must get the needed educational requirements in a degree program. Fulfilling these requirements can allow you to pursue your goals.

But it's essential to know more to run a successful practice. It's also critical to meet all necessary compliance and regulatory requirements. This can help avoid professional malpractice and other types of lawsuits.

Starting a Mental Health Practice

You have your degree and relevant professional licensure. Now, you can develop a niche aligning with your interests and experience. Once you make this initial decision, it's on to the next steps.

As a mental health professional interested in becoming a business owner, there are other concerns.

Legal and Regulatory Requirements

Starting a private therapy practice involves legal and regulatory components. These include the following:

  • Securing a business license: You must choose a business structure and register your therapy practice as a legal entity. When starting a business, you can choose from various structures as your state's laws allow. These can include a sole proprietorship, partnership, LLC, or corporation. Consult a CPA, business advisor, or business lawyer to learn more.
  • Learning about local regulations: Where you open your mental health services business dictates the rules. It's important to research applicable local regulations. A local business attorney or business advisor can provide guidance.
  • Acquiring professional liability insurance: In addition to insurance you should have as a business, professional liability insurance is also essential for your practice. It's also known as malpractice insurance. This coverage protects you and your company against lawsuits. These suits stem from patient outcomes based on actions or inaction.
  • Adhering to healthcare regulations: Maintaining confidentiality is essential to your practice. This includes complying with HIPAA requirements. Ensure patients sign consent documents authorizing treatment and applicable waivers.
  • Abiding by all applicable guidelines and requirements: Be sure to maintain your licensure. This may require attending continuing education (CE) seminars. Taking this step allows you to maintain your license. It will also help keep you up to date on any changes to laws and regulations that impact your practice. For example, the American Counseling Association offers many CE courses each year. Applicable requirements can also depend on the organization that licenses you. For example, you may be accredited through The Council for Accreditation of Counseling and Related Educational Programs (CACREP). This can come with its own set of policies and requirements.
  • Deciding between private pay or insurance: It's up to you whether to take insurance. You may take a hybrid approach or begin private pay only and add insurance later. If you seek to get paid under insurance policies, you must also understand insurance reimbursement issues.

Setting Up Your Mental Health Practice

An attorney focusing on business compliance can help you get your mental health practice up and running. They can guide you through the steps needed to start a business compliant with the following:

  • State laws relating to your business
  • Licensing organizations
  • State boards
  • Local organizations

FindLaw provides resources about starting a business.

Lawsuits in Mental Health Practices

Mental health practitioners must comply with the profession's legal and ethical rules. Complying with such obligations is required to remain in good professional standing.

Confidentiality Obligations

Confidentiality is an integral part of most provider-patient relationships. Safeguarding client conversations is critical.

But what are the mental health professional's obligations if a client makes statements suggesting they will hurt someone? Must a social worker, therapist, counselor, psychiatrist, psychologist, or other mental health professional inform someone about the statements? What is the duty to warn?

If a client makes a credible threat, state duty to warn laws vary. The obligations could include requiring any of the following:

  • Reporting to law enforcement
  • Warning the victims
  • Warning relatives
  • Taking steps to protect the intended victim, such as hospitalizing the client

The responsibilities can also vary based on the type of licensed mental health professional involved.

Many states, such as New York, impose mandatory reporting duties on mental health professionals. Other states may require psychologists and psychiatrists to warn but only impose a voluntary or permissive duty on therapists.

Other Common Claims Against Mental Health Professionals

In addition to potential claims against mental health professionals for confidentiality issues, common complaints they face include:

  • Relationship boundary issues, e.g., sexual relationships with clients
  • Patient suicide
  • Mental health misdiagnosis
  • Misrepresenting qualifications
  • Practicing without a license
  • Billing fraud

If you face a professional malpractice suit, getting legal help is essential.

Need Help Navigating Legal Issues for Your Mental Health Practice?

An experienced attorney can help. If you need help understanding your legal obligations concerning starting a private mental health practice, contacting a business lawyer is wise.

If you're in practice and someone brings a claim against you concerning your professional mental health services, you need someone to represent your interests. An experienced professional malpractice attorney can help you protect your business when these issues arise.

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Next Steps

Contact a qualified business attorney to help you navigate your business's legal and regulatory landscape.

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