Why I chose to start a nonprofit group therapy practice (and why you might, too)
Summary
Learning how to start a PMHNP private practice requires completing key steps like obtaining your Board of Nursing license, forming an LLC, securing malpractice insurance, and credentialing with insurance companies.
Building a successful PMHNP private practice starts with a clear business plan that defines your target patient demographic, mission statement, and short- and long-term goals.
Psychiatric mental health nurse practitioners must navigate legal risks carefully, including consulting a business lawyer and staying current on telehealth licensing laws across states.
Choosing the right EHR for a PMHNP practice is essential—features like online scheduling, automated reminders, integrated billing, and psychiatry-focused documentation tools help businesses succeed.
Starting a private practice as a psychiatric mental health nurse practitioner can be a lot of work. Not only do you need to manage the day-to-day tasks of being a clinician, but you also need to run a business.
While software can help you with the bulk of running a PMHNP private practice, there are plenty of other elements you need to get you off the ground.
In this article, we’ll go through the steps you need to know for starting a PMHNP private practice—from getting the licenses you need to legal pitfalls to avoid.
What do psychiatric nurse practitioners do?
Nurse practitioners are advanced practice nurses with master’s or doctorate degrees who are able to assess, diagnose, and prescribe medications.
There are many different specialties of nurse practitioners, including family nurse practitioners, acute care nurse practitioners, and psychiatric mental health nurse practitioners.
As a psychiatric nurse practitioner, you are able to diagnose patients, prescribe medications, and provide psychotherapy.
PMHNPs are able to work in hospital settings, correctional facilities, substance abuse clinics, schools, emergency rooms, inpatient psychiatric units, and outpatient mental health private practices. They can also start their own PMHNP private practice.
Nurse practitioners can complete health and physical assessments, and order laboratory and diagnostic tests like lab work and chest X-rays based on any physical assessment findings.
Psychiatric mental health nurse practitioners also commonly collaborate with other physicians, physician associates, nurses, nurse practitioners, and other healthcare team members.
Steps for starting a PMHNP private practice
As with starting any wellness private practice, successfully starting a PMHNP private practice can be challenging. The key is learning everything you can—from billing and insurance to how to coordinate with your team.
Here are some of the most important steps to follow to start a PMHNP private practice:
Obtain a Board of Nursing license in the state you are looking to start your practice.
Buy or lease an office space or obtain a virtual address if you plan to conduct telepsychiatry. (You need this to register for an LLC!)
Determine your business name and start a limited liability company (LLC) or professional limited liability company (PLLC), depending on your state’s laws. You can use a service like LegalZoom or work with a certified public accountant to have this done.
Obtain your Controlled Dangerous Substances (CDS) license number (if necessary, per your state’s requirements).
Obtain your DEA number if you plan on prescribing controlled substances.
Obtain a furnishing license (if necessary, per your state).
Obtain a Type 2 NPI number.
Obtain malpractice insurance for your practice.
Open a business bank account for your practice.
If you will be accepting insurance, start the insurance credentialing process with insurance companies. If you will be cash pay only, you can skip this step.
Sign up for a nurse practitioner software that has all the features you need. For example, if you’ll be offering telehealth, choose a platform that integrates it into the platform.
Consult with a lawyer regarding anything business-related and your overall structure.
Once you’ve completed the steps above, you can start a PMHNP private practice and open your doors, market your practice, begin seeing patients.
A few additional tips for running your PMHNP private practice:
Set up a phone number for your practice, and have a voicemail greeting to tell prospective patients to go to your website and request an appointment.
On your website, have a request appointment form for prospective patients to fill out. When you have free time, you can review the request, verify the patient’s insurance, and see if you would like to take this patient. You can change these protocols in the future if you have time to answer phone calls or hire staff for an administrative role.
Keep early operations simple. Have your EHR send them automated paperless intake forms to request insurance information, consent, and all the legal paperwork.
Come up with a psychiatric nurse practitioner private practice business plan
Creating a successful business requires you to come up with a plan that focuses on your target market, what you want to offer, and pricing strategies.
Fortunately, whether you’re operating a telepsychiatry-based practice, have a physical location, or choose a hybrid model, starting a PMHNP private practice can require very little capital expenditure in comparison to other business types.
The initial capital you have to spend will be on office supplies, your office space, furniture, computer, internet, and any professional learning or development courses.
As cliche as it sounds, the secret to success is perseverance. This hard work includes obtaining clients, improving clinical outcomes, stabilizing patients, and ultimately empowering them to thrive.
As you develop your business plan, reflect on these questions:
What are your short-term and long-term goals for opening a practice?
Why did you start a private practice? Is it to make a lot of money? Is it to be able to give better healthcare to your patients? To have more flexibility to spend time with family? To work less? To have more autonomy?
What is your mission and value statement?
What kinds of patient demographics are you looking to target?
Whatever your reason for starting your own practice, your answers will help you identify the right outcomes and create success in private practice.
Nurse practitioner private practice: Three legal pitfalls
While starting a private practice can be very rewarding, it can come with significant legal risks as well.
Here are three ways you can avoid legal pitfalls:
Consult with a business lawyer to help create your business structure and protect yourselves from certain liabilities. They can also help you with creating intake forms, employee contracts and handbooks, privacy and HIPAA-compliance, and advise you on how to deal with subpoenas.
When looking for your first location, have your business lawyer look over the contract, regardless if you are looking to lease or to buy.Many PMHNPs who don’t hire a lawyer get stuck in a five to seven year lease with no way to get out.
Many clients now opt for virtual care via telehealth, so it’s essential to stay up to date with today’s telehealth laws. Let’s say you have a PMHNP private practice in California. You are not permitted to see a patient residing in Pennsylvania or Virginia unless you also get your PMHNP license in that state. If your patient from California is temporarily on vacation in another state, you are also not automatically permitted to see that patient virtually,as regulations generally require licensure in the state where the client is physically located.
Choosing an EHR for psychiatric nurse practitioners
When deciding on the best EHR for psychiatric nurse practitioners, you’ll want to consider if it offers the following features:
Does it have tailored intake and progress notes with psychiatry in mind?
Does it have automated mental health screening tools?
Can new and existing clients request appointments online?
Can you automate appointment reminders to reduce no-shows and cancellations?
Do you want a secure messaging system to communicate with clients?
Is billing and insurance claim filing integrated into the system?
Does the EHR have a mobile app that allows you to access your schedule on-the-go?
Is there email, video, or chat support in place should you have questions?
How SimplePractice streamlines running your practice
SimplePractice is HIPAA-compliant practice management software with everything you need to run your PMHNP private practice built into the platform—from booking and scheduling to insurance and client billing.
If you’ve been considering switching to an EHR system, SimplePractice empowers you to run a fully paperless practice—so you get more time for the things that matter most to you.
Try SimplePractice free for 30 days. No credit card required.
READ NEXT: How many years does it take to become a nurse practitioner?
Frequently asked questions about starting a PMHNP private practice
What licenses do I need to start a PMHNP private practice?
The specific licenses required depend on your state, but most PMHNPs will need a Board of Nursing license, a DEA number if prescribing controlled substances, and potentially a Controlled Dangerous Substances (CDS) license number and furnishing license depending on state requirements. You'll also need a Type 2 NPI number if you're forming an LLC or PLLC. Consulting with a business lawyer early in the process can help you confirm exactly what's required in your state.
Do I need to form an LLC to start a PMHNP private practice?
Forming an LLC or PLLC is a common and recommended step for PMHNPs opening a private practice because it helps protect your personal assets from business liabilities. Which entity type is right for you depends on your state's laws. Services like LegalZoom can help you get started, or you can work directly with a certified public accountant or business attorney.
How long does the insurance credentialing process take for a new PMHNP practice?
The insurance credentialing process can take anywhere from a few weeks to several months, depending on the insurance companies involved and your state. Because of this timeline, it's worth starting the process as early as possible—ideally while you're still completing other setup steps. If you plan to be cash-pay only, you can skip credentialing entirely.
Can I practice telehealth across state lines as a PMHNP?
Generally, no—not without proper licensure. If you hold a PMHNP license in one state, you are typically not permitted to see patients residing in or temporarily visiting another state unless you also hold a license there. Telehealth laws have evolved significantly in recent years, so it's important to stay current with the rules for every state where your patients are located.
What should I look for in an EHR when starting a PMHNP private practice?
Look for a platform that's built with HIPAA, your clients, and the mental health industry in mind. Key features to prioritize include psychiatry-specific intake and progress note templates, automated mental health screening tools, online scheduling, appointment reminders, integrated billing, telehealth capabilities, and responsive customer support. The right EHR should reduce your administrative burden—not add to it.
