How To Start a Group Practice (Hint: It’s Easier Than You Think)

En·tre·pre·neur: “A person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.” That definition, courtesy of Google, is associated with such an intense work life this day and age, it’s almost intimidating to consider being part of that trend. And if the only word you read in that definition was “risk”, you’re not alone.

However, for some mental health clinicians, there is an un-denying desire to increase one’s business expertise and create additional ways to bring in income outside of just providing service. Whether you are currently in private practice, work for a group yourself, or are even employed by an agency, opening a group practice is an option for everyone. Owning and operating a group practice can be a very fulfilling, rewarding, and even lucrative business venture. Not only are you able to provide other incredible clinicians a safe and happy place to work, you can also create a healing and nurturing environment for patients seeking treatment.

While practicing in and owning your own group practice, you have the ability to more than double your income potential while acting as your own boss and creating your own rules. While not outlined in our services, this is something we assist with constantly. Because we’ve done this more than a handful of times, we’ve broken down our top tips to opening your group practice.

Business Structure

First things first: business structure. There are two popular ways to do this and it is entirely based on preference as a business owner.

  • Option 1: Create a business tax ID and file all of your providers as rendering providers under said tax ID.
    • Pros: You have complete control of money distribution and because you are the owner of the business and take responsibility for all services rendered under that business, all income will go directly to you. This includes insurance checks, and any patient responsibility collected in office.
    • Cons: There is the possibility that you could be held liable for one of your clinicians if an issue arises with client care.
  • Option 2: Have each of your providers apply for their own tax ID.
    • Pros: While each provider can still be under the umbrella of your business, you are not liable for any malpractice. They must obtain liability insurance on their own, saving you money and any liability issues down the road.
    • Cons: Each provider’s work will be submitted under their own tax ID, meaning any insurance money earned will go direct to them.

So now you’re asking, “If I go with Option 2, how do I make money?” Well, once a provider joins your group, a business contract between you (the owner) and the provider (your contractor) should be the first order of business. That contract will outline what you will provide to your contractors. Whatever services are included (rent, reception, billing services, etc.) will be summed and they will owe that back to you at the end of the month after they have been paid.

A typical rate for an owner-to-contractor relationship is around 40/60 percent. The 40% goes back to you in return for their rent, reception, and any other luxuries you provide. This is attractive to providers who don’t want the headache of dealing with a landlord, paying utilities, or managing a receptionist. They can strictly focus on providing a great service and leave the rest to you.


The dreaded credentialing or “paneling” as some clinicians call it, the long and detail-oriented applications to be accepted as an “in-network” provider to insurance companies. If this is something you are interested in doing, it doesn’t have to be hard if it’s done right up front! To not get too far into details, there are two ways to credential a provider and these are based off your business structure decision.

  • Option 1: Each provider should be credentialed individually
  • Option2: Each provider should be credentialed under their own tax ID

To ensure consistency and to get the most out of what you pay for (if you are using a third party) these minutiae details are extremely important to get it right the first time. At the risk of having to re-do the applications you want to make your business structure clear for insurance companies so they know how to process claims properly.


Having a receptionist can be invaluable for an organization. If the receptionist is trained in insurance, they can assist with obtaining all of the necessary billing information and translate that to your billing company for eligibility checks. Another benefit is copay and deductible collection. It can be tough for providers to request a copayment after an emotionally draining session; sometimes the water between clinician and business gets too muddy. To avoid this, a receptionist can take on this task before a patient goes into session.

This also guarantees that the practice doesn’t lose money by skipping out on patient collection. Just like going to a medical doctor, a receptionist is able to strictly enforce copay policies. Furthermore, the receptionist can handle scheduling for all of the providers. Another brilliant way to ensure providers deal with as little admin as possible, presenting yet another attractive luxury of participating in a group practice.


The idea of opening your own group practice initially seems too daunting to explore. But breaking it down step-by-step shows the simplicity and profit pay off, making it a no-brainer. It’s important to evaluate your business goals and align those with what it takes to begin a venture like this one. And if you see alignment, prepare to be rewarded with an altruistic business venture for both clinicians and patients alike.

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