Update Jan-1-2021: I have decided to let go of my mental health counseling license, and I am leaving this page up because I have heard from so many people that it has been a valuable resource.
Update Jan-27-2022: I split this article into two parts. The first is more geared toward therapists, while the second may be useful to other healers starting a private practice, including therapists.
The intent of this page is provide a quick and hopefully-not-too dirty guide to setting up a private mental health practice in Washington State. I practice out of Seattle, and most info here will be applicable state-wide. Disclaimer: although I have done my best to provide accurate information, I will not take responsibility if you don’t do everything right. Also, I originally wrote this around 2011, and have made some attempts to keep it updated, but there are no guarantees that it is up to date. So, do your research – hopefully the pointers here will help with that. Also, this is by no means a complete guide to everything you need to know to run a practice. I am including very little about the clinical side of things, and I’m not saying much about full licensure or the exam. That said, I’m open to feedback about this page, and will attempt to change it to make it as useful as possible.
I’ll go through the tangled mess of bureaucratic footwork you need to do, then review some of the basics of getting your practice going, including finding a supervisor, setting up some forms, finances, and marketing.
Legal Stuff
Business Licenses
You will need to set up a business structure. I recommend starting with a PLLC/LLC (Professional/Limited Liability Company. An LLC is better than a sole proprietorship because it means you are not liable for debts incurred by the business (should the business fail). I have heard that a Professional Limited Liability Company (PLLC) may be required for businesses that require state licensure. RCW 25.15.046 uses some vague language that does not clarify, to my non-lawyerspeak brain, at least, if it is actually required.
You need to set up a legal business by filling out the Limited Liability Corporation application here. You are creating a Single Member LLC registered with Washington State. It takes about 15 minutes and costs $200. You will need to name your company – pick something simple, not necessarily a trade name, like Jason Foster LLC. Of course, they won’t let you use that because that’s my LLC’s name. 🙂 This application does not require a practice address, just a home address.
It costs more money to set it up ($700+), and the accounting requires more resources (you’ll probably want to pay a CPA, and they will charge more than those filing as an LLC), but once you are making enough money, you might consider switching over to an S-Corporation, because it will save you money on tax payments, at the time of this writing, at least. Congress may change things. Talk to a CPA about this when you are ready. It probably won’t make financial sense in the first year or two. If you form an S-Corp, you may need to register it as a Professional Service Corporation with the State. Again, the RCW isn’t too clear on this. Sorry.
You will need an Employer Identification Number (EIN) from the IRS. Get it here. [free, 5 min]
You will need to apply for a Washington State Business License. With this, you’ll get a UBI number. [file online, $15-$20, 30 minutes (provide Trade Name, if applicable)]
Finally, you will need a City Business License. If you are in Seattle, use this form. This requires physical space of practice, optional trade name. [file online, 30 minutes, $56 if you plan to make less than $20K (half off if you are starting after June 30th)].
Insurance
You need professional liability insurance. Not that I’m necessarily recommending them, but CPH hasn’t given me any problems (nor have I had to use them). It should cost about $130/year.
You may also want to consider Business Insurance, which covers things beyond professional liability, like Slip & Fall coverage.
If you are working out of your home, you should look into getting trip and fall insurance, perhaps through the same broker that you get your home insurance or renter’s insurance from.
Licensure
LMHCA / LMFTA application
About 80% of Washington State counselors are registered as Licensed Mental Health Counselors (or Associates). The other 20% (not counting social workers, who are a significant chunk) are Licensed Marriage and Family Therapists (or Associates). LMFTs require a few extra credits from your master’s program – check with your program if you don’t know which you qualify for. You can review the credentialing requirements here.
Here is the LMHCA form.
make sure you get the ASSOCIATE package.
Here is the LMFTA form.
make sure you get the ASSOCIATE package.
These forms are quite long and may take some time to fill out completely. One of the more challenging sections is the “Course Content Identification”, which requires you to fill in the course information from your masters program. You will probably need to get this from your program. In my experience, it may take a week or two for them to get back to you. The application fee is $50.
Note that the application packet includes a “Approved Supervisor Verification Mental Health Counselor Associate” form. As far as I know, you don’t need to submit this form with your application. I have heard that you need to submit it with your application for full licensure, however. This form is to be signed by your supervisor and returned to you.
NPI (National Provider Identifier) number
If you don’t already have one from your internship, you can apply (or look up your existing number) here: https://nppes.cms.hhs.gov/NPPES/StaticForward.do?forward=static.npistart
You will need your LMCHA/LMFTA license number for this application. You will also need to provide a taxonomy code. For LMFTAs, use 106H00000X. For LMHCAs, use 101Y00000X. Those are the general codes. There are also codes for specific types of counselors, and for Art Therapists, Music Therapists, Psychologists, Social Workers and others. You can refer to this list.
Supervision
As an Associate, you are legally required to have a specially-certified therapist provide oversight. More importantly, I think, this should be someone you are comfortable with, or feel like you can get comfortable with as your relationship develops. A good supervisor will not just be your mentor, they will also help you work your counter-transference, help you when you are stuck or disheartened, and help you with challenging ethical issues. Legally, however, they cannot be your therapist. You may want to discuss their approach to supervision with them before signing up.
I recommend asking around – who do your colleagues go to or recommend?
To apply for a full LMFT or LMHC license, you have to meet the following hours requirements. You have 7 years to do this, but it’s good to start thinking it about right now. I suggest reviewing the credentialing requirements for full licensure.
immediate supervision (100 hours required for LMHC / 200 for LMFT, 100 of which can be group supervision)
direct counseling (1200 hours required for LMCH / 1000 for LMFT, 500 of which must be multi-body))
total supervised experience hours (3000 hours required)
Your supervisor will be signing off on your hours. That means that you will want to track your hours. Use a spreadsheet, and record Individual and Relational (multi-body) hours, Group Supervision Hours, Individual Supervision hours, Training Hours, and Administrative Hours. It may not be necessary to split out Individual and Relational hours, but I like to track that.
Administration hours are hours spent writing down session notes or making appointments. They are also any hours spent working on your business – filling out all these application forms, building your website, or organizing your finances, and reading this guide. Make a clear plan, in writing, with your supervisor about what counts for administration and training hours. Hours acquired prior to your supervisor signing the Approved Supervisor form in the application packet do not count toward licensure.
You may want to get your supervisor to sign on off on your hours frequently, and keep backup copies. I heard one sad story about an associate who had their hours signed off on, then their supervisor died, then they lost their signed-off hours forms. All those hours were lost, as far as the State was concerned.
Note that the State is likely to refuse to accept signed-off hours unless they are on the official Verification of Mental Health Counselor Supervised Postgraduate Experience form [pdf].
Disclosure / HIPAA
You will need to provide a disclosure form to all of your clients before engaging in therapy. You may use my old form as a template (changing the names to protect the innocent), and I encourage you to do your research and make sure you haven’t left anything off of your version. Have your supervisor review your disclosure.
You may want to consider setting up encryption for your email transactions, or at least let your clients know that emails are not secure. I encourage you to use email only for setting up appointments, for privacy reasons (and because it can be difficult to maintain healthy boundaries if you start doing therapy over email). Here is a more detailed analysis.
Beyond that, I’m not going to get into HIPAA requirements, except to say that you should familiarize yourself with them. Keep in mind that it is very important to protect your clients’ PHI (Personal Health Information). Lock your electronic and physical files appropriately. http://www.hhs.gov/ocr/privacy/
Note that technology is covered by HIPAA. You will need to consider how you store client’s PHI. For many online services, you will need a Business Associate Agreement.
Notes
You are required to take session notes, unless your client specifically requests that you don’t, in writing. I encourage you to talk to your supervisor about this and do your own research.
