Common Issues for Mental Health Professionals in Private Practice in New York
Disclaimer
This guide provides a list of resources that address common issues for mental health professionals in private practice in New York. The list of issues is not exhaustive and there are many more resources on the topics listed. This guide does not cover all the related laws and regulations. This guide was last updated on April 15, 2024 and some of the information may have since changed. The information in this guide is not legal advice and is not intended to be relied upon as legal advice. If you have a legal issue, you should not rely on this information and instead speak to an attorney.
This guide includes links to third party websites for access to information and resources. We do not control these websites. We have not reviewed all the content that appears on these websites, and are not responsible for the legality, accuracy, or appropriateness of their content. Content on these websites may change at any time, including after we decide to share their links on this site. For legal advice about your specific situation, you should consult with a qualified attorney.
Introduction
This guide seeks to help mental health professional identify some of the information and resources important to private practitioners in New York. You can learn more about the services Pepitone Law provides to mental health professionals on our Home and Mental Health Professionals pages.
Social Workers may also be interested in the NASW New York State Chapter Chat, “So, You Want to Open a Private Practice.”
STARTING AND MAINTAINING A PRIVATE PRACTICE
Writing a Business Plan
SCORE.org provides templates and guidance on business plans and other issues related to operating your own business.
Business Entity Options
New York law limits the types of business entities permitted to provide professional mental health and social work services. For instance, a limited liability company (LLC) may not provide professional mental health services, but a professional limited liability company (PLLC) may. You can learn more in Pepitone Law’s guide, “Select Mental Health Business Regulations,” under “Professional Business Entities.”
Forming a Professional Limited Liability Company (PLLC)
PLLCs are often a good fit for mental health private practices. You can learn more about how to form a PLLC in Pepitone Law’s guide, “How to Form a Professional Limited Liability Company.”
Maintaining Your Business Entity
Taking care to ensure that you have properly formed your business in New York is a critical first step, but ongoing and regular legal maintenance is equally important to preserve the legal protections and tax benefits throughout the life of your business. You can learn more about maintaining your business entity in Pepitone Law’s guide, “Basic Legal Maintenance for New York Businesses.”
Important Documents
Some of the documents that it may be best practice to implement, or may be required by law or regulation, include:
Client Policies and Procedures
Informed Consent for Videoconference Sessions
Notice of Privacy Practices
Good Faith Estimates
Authorization to Release Information
Website Notices and Terms and Conditions
Employment/Independent Contractor Agreements
Employee Policies and Procedures, and Notices (see below)
You are encouraged to speak to an experienced attorney to determine what documents are appropriate for your practice.
Hiring Employees/Independent Contractors
The determination of whether an individual is an employee or an independent contractor of a business can have significant ramifications on liability, civil rights, taxes, benefits like unemployment insurance, and more. Some of the attributes of the relationship to consider are whether the individual performs their work without direction or control from the business (in the contract and in reality), performs the services in their own name or the business’s name, offers and delivers their services to the general public or business community regularly and free of the business’s input, and pays for their own licenses, supplies, and administrative costs. Business owners are encouraged to speak with an experienced attorney to assess whether individuals should be treated as employees or independent contractors. You can learn more about the distinction and the responsibilities of hiring parties in Pepitone Law’s guide, Independent Contractor or Employee? Tips for Small Businesses in New York.
Employer Responsibilities
Employers in New York must be aware of many federal, state, and local laws and regulations. It’s important to understand these rules and the responsibilities they establish. Establishing clear policies and procedures, and updating them regularly, can make legal compliance easier and more efficient. You can find out more about some of the primary regulations employers in New York State and City must be aware of in Pepitone Law’s Guide, “Responsibilities of New York Employers.”
Supervision
The American Psychiatric Association has a guide, “Supervision in Psychiatric Practice,” and the American Psychological Association has a guide, “APA Guidelines for Clinical Supervision in Health Service Psychology.” For social workers, the Office of Professions has Practice Guidelines about Using and Providing Supervision and the NASW has Best Practice Standards to Social Work Supervision.
LIABILITY ISSUES
The profession of mental health is regulated by an array of federal, state, and administrative regulations. Below is a non-exhaustive list of some of the most important regulations.
Scope of Practice / Practice Guidelines / Licensure
New York Education Law, Article 130, Subarticle 4, § 6512 stipulates that it is a felony for a person to practice a licensed profession without that licensure. The Office of Professions has taken disciplinary action against individuals practicing outside the scope of their profession or without proper licensure, including suspensions, probation, and fines.
New York Education Law, Title 8 defines the practice of mental health professions and, through the hyperlinks, will lead you to more information about each practice area.
Professional Rules of Conduct and Ethics
The Office of Professions has established Professional Standards of Care in Mental Health Practice, general provisions on unprofessional conduct, and provisions specific to mental health professionals.
The American Psychiatry Association has various Ethics Resources and Standards.
The American Psychological Association has established Ethical Principles of Psychologist and Code of Conduct and the American Counseling Association has a Code of Ethics.
The National Association of Social Workers has established a Code of Ethics that establishes thoughtful parameters for the professional practice of social work. The NASW also provides information about ethics complaints.
PRIVACY, CONFIDENTIALITY, SECURITY, AND DISCLOSURES
Mental health professionals are required to maintain the privacy and confidentiality of clients’ health and other personal information. Exceptions apply in emergency and other situations. These complex issues are primarily governed by HIPAA and state laws.
HIPAA
See Pepitone Law’s guide, Telehealth Rules and Best Practices for more information on HIPAA.
Person Centered Tech provides excellent resources and services to help mental health professionals manage their practice in compliance with HIPAA. The U.S. Department of Health and Human Services has helpful FAQs about how HIPAA applies to mental health services.
Notice of Privacy Practices
Under HIPAA, mental health professionals in private practice must provide clients with a notice of their privacy practices. The U.S. Department of Health and Human Services has more information about the requirement and model notices of privacy practices. It may be best to consult an attorney about a notice that suits your individual practice.
Telehealth
See Pepitone Law’s guide, Telehealth Rules and Best Practices for more information on telehealth.
OTHER ISSUES
Practicing Across State Lines
· Each state governs the practice of mental health professions in that state
· Different states apply different rules for when providers must be licensed in the state – i.e., if the provider is located in the state and/or if the client is located in the state
· Some states offer limited permits, simple registration for telehealth practice, or exemptions from full licensure by the state
· Holding licenses in both the state where the provider is located and the state where the client is located may resolve many issues, but providers must still consider whether any rules of their practice conflict between the two states
· Person Centered Tech provides a cross-state permissibility to practice due diligence documentation worksheet
· While most other nations do not govern mental health professions the way we do, it is important for providers to understand any rules that do apply in that nation and recognize that the absence of rules may still me they have exposure to legal risk (for instance, if other laws or standards apply, like negligence)
See Pepitone Law’s guide, Telehealth Rules and Best Practices for more information on telehealth.
Practicing Across State Lines – New York
Section 6501 of Article 130 of the Education Law, Title VIII governs the “practice of a profession in” New York State.
The New York State Education Department, Office of the Professions’ “Telepractice” guide states that:
“To the extent it involves providing professional services in a jurisdiction other than the one in which the practitioner is physically located, telepractice raises the issue of the jurisdiction or jurisdictions in which the practitioner must be licensed. In New York State, a practitioner must hold a New York license, or be otherwise authorized to practice, when providing professional services to a patient located in New York or when the practitioner is located in New York.”
One interpretation of the Office of the Professions’ guidance is:
· If the provider or the patient/client are in New York, the provider must be licensed in New York.
· If the provider or the patient/client are in another jurisdiction, the provider must also follow the guidelines of that jurisdiction.
· If a provider with a New York State license travels to another state and will provide professional services to clients located in New York remotely while in that state, the provider must determine if the state requires the provider to be licensed by that state or at least registered there.
See Pepitone Law’s guide, Telehealth Rules and Best Practices for more information on telehealth.
In-Person Operations
Commercial leases are complex and often contain terms that are incredibly unfavorable to the tenant. It is best to have an attorney review, and potentially negotiate, any commercial lease before signing. To get a sense of some of the key terms and issues, you may want to review resources like the New York City Department of Small Business Services’s “Comprehensive Guide to Commercial Leasing in New York City.”
Malpractice and Other Insurance
Malpractice, general business, cyber, and other insurance policies can reduce your exposure to legal risk. When choosing an insurance policy, it’s important to consider:
the situations covered by the policy
the situations excluded from the policy
your responsibilities under the policy
whether the coverage amounts are appropriate for your circumstances
An insurance broker with experience with mental health practitioners should be able to assist you with the process. You might consider speaking with a few insurance brokers before deciding who you are most comfortable with. Your insurance company may have guides for how to best manage risk – like appropriate record keeping and use of telehealth.
Good Faith Estimates
The APA and the NASW have instructions on the No Surprises Act and Good Faith Estimates.
Preparing for Personal Emergencies
It is important to make plans for your practice in case you become incapacitated or die: for clients, you can ensure continuity of care and access to records, and for loved ones and colleagues, you can make the process easier to manage. Check out Pepitone' Law’s guide, Preparing for Personal Emergencies: A Guide for Mental Health Professionals in Private Practice, for more information.
Management Service Organization
A Management Service Organization (“MSO”) is a business that provides administrative, technological, regulatory, and/or technical support for licensed healthcare professionals. Under New York law, MSOs may not engage in unauthorized corporate practice of medicine. You can learn more in Pepitone Law’s guide, “Select Mental Health Business Regulations”, under “Management Service Organizations.”
Fee Splitting
Under New York law, generally a licensed professional or professional business entity may share fees earned for designated professional services only with a licensed member of the professional business entity. You can learn more in Pepitone Law’s guide, “Mental Health Business Regulations”, under “Fee Splitting.”
Taxes
It’s helpful to talk to an accountant in the earliest stages of starting your private practice. They can provide information about your responsibilities, including federal and state tax filings and appropriate record-keeping. You can learn more about your tax responsibilities in New York State and with the IRS.
Consult an Experienced Attorney
An attorney experienced in the issues impacting mental health professionals help you determine your practice’s specific responsibilities and advise you about how to efficiently meet them. You can learn more about the services Pepitone Law provides to mental health professionals on our Home and Mental Health Professionals pages.
