Starting a private practice in New York feels like navigating a maze of regulations, paperwork, and decisions. Between NYSED licensing, PLLC formation, the infamous publication requirement, and HIPAA compliance, it's easy to feel paralyzed before seeing your first client. But here's the good news: thousands of therapists have successfully launched practices in New York, and with the right roadmap, you can too.
This comprehensive guide breaks down every step you need to take to start your therapy practice in New York State. We'll cover the unique requirements that make NY different from other states, provide realistic timelines and costs, and give you a clear path from licensed clinician to thriving practice owner.
Before You Begin: Essential Prerequisites
Before diving into business formation and compliance, you need to ensure your professional credentials are solid. New York has specific requirements for each mental health license type, and your entire practice setup depends on having these in order.
Verify Your New York License
You need an active, unrestricted license from the New York State Education Department (NYSED) Office of the Professions. New York recognizes several mental health license types, each with distinct requirements:
Clinical Licenses
-
LCSW - Master's in social work, 3 years supervised experience, ASWB Clinical exam
-
LMHC - Master's with 60 semester hours, 3,000 hours supervised, NCMHCE exam
Specialty Licenses
-
LMFT - Master's with 60 hours, 1,500 hours direct client contact, MFT National Exam
-
LP - Doctoral degree in psychology, one year supervised experience, EPPP exam
Step 1: Form Your Professional LLC (PLLC)
In New York, licensed professionals must form a Professional Limited Liability Company (PLLC) rather than a standard LLC. This process involves multiple state agencies and can take 4-8 weeks to complete.
Choose Your PLLC Name
Your PLLC name must end with "PLLC" or "Professional Limited Liability Company" and cannot include words that suggest services you are not licensed to provide. Check name availability through the NY Department of State's business entity database before submitting your application.
Get NYSED Name Approval
Before filing your Articles of Organization, you must obtain name approval from NYSED's Office of the Professions. Submit Form 1 along with the $10 fee. Processing typically takes 2-4 weeks.
Important Timeline Consideration
Submit your NYSED name approval request first. While waiting for approval (2-4 weeks), you can research EHR systems, insurance options, and office space. This parallel planning can save you weeks overall.
File Articles of Organization
Once you receive NYSED approval, file your Articles of Organization with the NY Department of State. The filing fee is $200. Include your NYSED approval letter with your submission. Processing takes approximately 2 weeks for standard filing, or you can pay extra for expedited service.
Create Your Operating Agreement
While not filed with the state, New York requires PLLCs to have a written Operating Agreement. This document outlines ownership structure, member responsibilities, and how profits and losses are distributed. Even as a solo practitioner, having this document protects your personal assets and establishes your business structure.
Step 2: Complete the Publication Requirement
This is the step that surprises most new practice owners. New York requires all LLCs and PLLCs to publish a notice of formation in two newspapers for six consecutive weeks within 120 days of formation. One newspaper must be a daily publication and one must be a weekly publication, both designated by your county clerk.
High-Cost Counties
- Manhattan (New York County)$1,500+
- Brooklyn (Kings County)$1,200+
- Queens County$1,000+
- Bronx County$800+
Lower-Cost Counties
- Albany County$300-500
- Erie County$350-450
- Onondaga County$300-400
- Most Rural Counties$250-400
After publication is complete, the newspapers provide affidavits of publication. Submit these along with the Certificate of Publication (Form DOS-1524) and a $50 filing fee to the Department of State.
Cost-Saving Strategy
If you have flexibility in where you base your practice, consider registering your PLLC in a less expensive county. You can still see clients anywhere in New York State. The publication requirement is based on your registered office address, not where you see clients.
Step 3: Get Your EIN and NPI Numbers
Employer Identification Number (EIN)
Apply for your EIN through the IRS website. This free, immediate process gives you the tax identification number you need for business banking, hiring contractors, and filing taxes. You can apply online at irs.gov and receive your EIN immediately upon completion.
National Provider Identifier (NPI)
Your NPI is your unique 10-digit healthcare provider identification number. Apply through NPPES (National Plan and Provider Enumeration System). You need this whether you plan to accept insurance or not, as it's required for electronic transactions, many telehealth platforms, and professional credentialing.
Mental Health Provider Taxonomy Codes
- Clinical Social Worker
1041C0700X - Mental Health Counselor
101YM0800X - Marriage and Family Therapist
106H00000X - Psychologist (Clinical)
103T00000X
Step 4: Secure Professional Liability Insurance
Professional liability insurance (malpractice insurance) protects you if a client files a complaint or lawsuit. While not legally required for all license types in New York, it's practically essential. Many office leases, insurance panels, and professional directories require proof of coverage.
Occurrence Policy
Covers incidents that happen during the policy period, even if claims are filed years later after the policy ends.
Claims-Made Policy
Only covers claims filed while the policy is active. Requires tail coverage if you change insurers or retire.
Most therapists carry $1 million per occurrence and $3 million aggregate coverage. Ensure your policy includes telehealth coverage if you provide virtual services. Expect to pay between $300 and $800 annually for a standard policy.
Step 5: Establish HIPAA Compliance
As a healthcare provider handling protected health information (PHI), you must comply with HIPAA regulations. This is not optional, and penalties for non-compliance can reach $1.5 million per violation category annually.
Required HIPAA Elements
- Privacy Policy documenting PHI collection, use, and disclosure
- Security Policy for protecting electronic PHI
- Notice of Privacy Practices provided to every patient
- Business Associate Agreements with all vendors accessing PHI
- HIPAA-compliant EHR and practice management system
- Encrypted email and HIPAA-compliant video platform
- Annual security risk assessment
Step 6: Build Your Practice Infrastructure
With your legal and compliance foundations in place, it's time to build the operational systems that will support your daily work.
Choose Your Practice Location
In-Person Options
- Traditional lease: Full control, highest cost ($2,000-5,000/month in NYC)
- Sublease/office share: Lower cost, less flexibility, great for starting out
- Therapy co-working: Growing option in NYC with shared amenities
Virtual Options
- Home office: Lowest cost, but check zoning laws in your municipality
- 100% telehealth: No physical office needed for client sessions
- Virtual office: Business address for registration without physical space
Essential Technology Stack
Your technology choices will significantly impact your efficiency and compliance. Prioritize HIPAA-compliant solutions for all systems that touch client information.
- HIPAA-compliant EHR/practice management software for scheduling, notes, and billing
- Encrypted email service with Business Associate Agreement
- Business phone number (VoIP options work well for flexibility)
- HIPAA-compliant video platform for telehealth sessions
- Secure client portal for messaging and document sharing
Step 7: Establish Your Financial Systems
Business Banking
Open a dedicated business bank account in your PLLC's name. Never mix personal and business finances. You'll need your Articles of Organization, EIN confirmation letter, and personal identification. Many banks offer free business checking for low-volume accounts.
Setting Your Fees
Research rates in your area and specialty. New York therapy rates vary dramatically by region:
Private Pay Advantages
- Higher per-session income
- No claims or prior authorizations
- Greater clinical flexibility
- No documentation requirements beyond your notes
- Immediate payment
Insurance Panel Advantages
- Steady stream of referrals
- Lower barrier for clients
- Consistent income stream
- Credibility with new clients
- Access to clients who need insurance
Many successful practices use a hybrid model: accepting one or two insurance panels while maintaining private pay availability at a higher rate.
Step 8: Get Found and Build Your Caseload
Build Your Online Presence
Your online presence is often a potential client's first impression. Focus on these essentials:
- Psychology Today profile: Still the most effective therapist directory, worth the $30/month investment
- Google Business Profile: Free and essential for local search visibility
- Professional website: Clear, simple, focused on who you help and how to contact you
- Professional headshot: Clients want to see who they'll be working with before reaching out
Build Referral Relationships
Word-of-mouth referrals often become your most reliable client source over time. Invest in relationships with:
- Local primary care physicians who see patients with mental health needs
- Psychiatrists in your area who need therapy referral partners
- Other therapists who may refer clients outside their specialty
- Local professional associations and networking groups
Your Complete NY Private Practice Checklist
17-Step New York Private Practice Launch Checklist
- Verify your NY license is active with NYSED Office of the Professions
- Choose your PLLC name and check availability with Department of State
- Submit name approval request to NYSED Office of the Professions ($10)
- File Articles of Organization with NY Department of State ($200)
- Create and sign your Operating Agreement
- Apply for your EIN from the IRS (free, immediate online)
- Complete publication requirement (2 newspapers, 6 weeks, $300-1,500)
- File Certificate of Publication with Department of State ($50)
- Apply for NPI number through NPPES (free)
- Purchase professional liability insurance ($300-800/year)
- Develop HIPAA policies and procedures
- Choose and set up HIPAA-compliant EHR software
- Set up HIPAA-compliant email and telehealth platform
- Open dedicated business bank account
- Set your fee schedule based on market research
- Create Psychology Today and Google Business profiles
- Launch your professional website
Frequently Asked Questions
How long does it take to start a private practice in New York?
Plan for 8-12 weeks minimum from start to seeing your first client. The biggest variable is the publication requirement (6 weeks) and NYSED name approval (2-4 weeks). Running these processes in parallel and preparing your infrastructure while waiting can minimize delays.
What's the minimum cost to start a practice in New York?
Budget at least $1,500-3,000 for startup costs. This includes NYSED fees ($10), Articles of Organization ($200), publication requirement ($300-1,500 depending on county), Certificate of Publication ($50), liability insurance ($300-800), and initial software subscriptions. NYC-based practices typically cost more due to higher publication fees.
Do I need a physical office to start a private practice in New York?
No. Many therapists operate entirely via telehealth from a home office. However, you still need a registered business address for your PLLC (which can be a virtual office address) and must comply with local zoning laws if seeing clients at home.
Can I skip the publication requirement?
No. New York requires all LLCs and PLLCs to complete the publication requirement within 120 days of formation. Failure to comply does not dissolve your PLLC, but it can prevent you from bringing or defending lawsuits in New York courts until you complete the requirement.
Should I accept insurance or go private pay only?
This depends on your goals and target clients. Insurance panels provide steady referrals but pay less per session and require more administrative work. Private pay offers higher rates and more flexibility but requires stronger marketing. Many successful practices use a hybrid approach, accepting select insurance panels while maintaining private pay availability.
Key Takeaways
-
1
Start with NYSED approval. Submit your name approval request first, then use the 2-4 week waiting period to research other requirements and set up systems.
-
2
Budget strategically for publication. If you have location flexibility, registering in a less expensive county can save $1,000 or more on publication costs.
-
3
Prioritize compliance from day one. HIPAA violations can cost millions and destroy your reputation. Invest in compliant systems before seeing your first client.
-
4
Build your online presence early. Create your Psychology Today and Google Business profiles as soon as you have your PLLC formed. These take time to gain traction.
-
5
Progress beats perfection. You do not need everything figured out before you start. Take the first step today and refine as you go.
Your Next Steps
You now have a comprehensive roadmap for starting your private practice in New York. The journey from licensed clinician to practice owner is significant, but it's absolutely achievable with the right planning and persistence.
Start with Step 1: submit your name approval to NYSED today. While waiting for that approval, research EHR systems, connect with insurance companies, and refine your practice vision. Every day you wait is a day further from seeing your first private practice client.
Remember, thousands of therapists have successfully navigated this process before you. With this checklist as your guide, you can join them.
Ready to Simplify Your Practice Management?
TheraFocus helps New York therapists run compliant, efficient practices with HIPAA-compliant tools, automated documentation, and intelligent scheduling built specifically for mental health professionals.
Found this helpful?
Share it with your colleagues
TheraFocus Team
Business Advisors
The TheraFocus team is dedicated to empowering therapy practices with cutting-edge technology, expert guidance, and actionable insights on practice management, compliance, and clinical excellence.