Group Practice or Group Practitioners?

So, you’ve been licensed for more than a year, working for an agency. It isn’t a bad job, but your dream since college has been to open a private practice.

You’ve lined up several referral sources, and you have a nest egg to draw upon while your practice builds.

What now? Should you just contact a realtor and start leasing an office?

Going Solo Doesn't Have to Mean Going Alone

Maybe... but there are alternatives to consider. Sharing office space with other therapists can be more cost effective: why not split the expense of waiting room decorations, kitchenette, front office staff, and the computer network with others?

And there is the “camaraderie” factor: sharing ideas with other therapists between sessions beats listening to crickets hands down. In a larger community, you will be able to locate several multi-therapist groups, and one or more may have an empty office that calls to you.

Before you join the team… figure out what kind of team it is!

Our data shows that about half of group practices using TherapyAppointment software are incorporated, a.k.a. “true” group practices operating as an LLC, PC, or S-Corp.

The other half are unincorporated, a.k.a. an “affiliation of independent therapists.” This type of group may have a name like “Main Street Psychotherapy” but it is just a name on a sign, nothing more.

Which is better? Group or Affiliation?

It depends on what you want.

In most “true” group practices, your client’s checkbook entry will read “Pay to the Order of Acme Psychotherapy, LLC” (or whatever) instead of having your name on that line. Insurance will be billed under the Group NPI for Acme Psychotherapy, paid to the group EIN. Your paycheck will likely come from Acme Psychotherapy, most likely with a hefty percentage of collections deducted (often close to 50%), but this split is in lieu of having to pay any rent. The head of the group may have policies that you have to adhere to, even if you disagree with them. Finally, in many cases your caseload is the property of the group, so if you want to leave, your clients may be staying behind, and you may be starting over from scratch.

In an “affiliation of independent therapists” you will enjoy more independence...and more risk.

You’ll likely pay a fixed rate each month for your space and other amenities like front office staff and common space. If you only see two patients in a month...the full rent will still be due. You’ll have to beat the bushes for your own clients: no one is going to help you with referrals. But 100% of fees collected will come directly to you.

Here’s a summary

“True Group Practice”

“Affiliation of Independents”

Advantages

• Turnkey
• Insurance relationships and referral channels already established
• Steady income
• Backup for emergencies and vacations
• Fewer billing/insurance/ tax headaches
• No rent to pay

• Building your own community reputation/referral base
• Greater practice portability
• Keep all income earned
• Independence: establish your own policies and specialties

Disadvantages

• Building practice for group, not self
• Hefty portion of income handed over to group
• Incomplete independence

• Slower startup
• Have to establish your own relationships with referral sources and insurance companies
• More financial risk
• Less mentorship/backup

One Final HIPAA Tip

One final tip, one that is not well understood by many “affiliations of independents.” One of the perks they offer may be the services of a scheduler/insurance biller — a luxury that is only cost effective in a group of three or more therapists.

But since there is no true corporate structure in such a group, you should get any such front office workers to sign a HIPAA “Business Associate Agreement” since technically they are not your employees.

HIPAA is tricky: in a true group, disclosure of confidential client information within the group “for purposes of healthcare delivery” is OK. Otherwise, you must not make disclosures to peers without written client permission, and you must have a Business Associate Agreement in place with your front office staff to guarantee that they will keep their lips sealed, as well. There is no “corporate umbrella” to huddle under... with all the pain and pride that accompanies that independence.

Questions? Thoughts? Feel free to comment below. In meantime, good luck as you grow your practice!