What steps are important for opening a cash practice?

Steps from the license to your own health insurance practice

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This article provides an overview of the most important steps into your own health insurance practice after receiving your license to practice. In addition, options for financing are presented.

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Step 1

After successfully passing the final examination, the application for the license to practice medicine is due to be submitted to the district government as soon as the certificate is available. It takes approximately 4 weeks to receive the license to practice. 

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Step 2

With the license to practice, one can be entered in the physician or psychotherapist register of the Association of Statutory Health Insurance Physicians (KV) of the federal state in which one wishes to acquire a license to practice. The entry in the register documents the specialist knowledge in the guideline procedure and creates the prerequisite for being able to settle the costs of psychotherapeutic treatments in the guideline procedure and within the framework of cost reimbursement. The entry can also be useful when opening a private practice, one receives a lifelong valid doctor number.

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Step 3

Entry in the waiting list for admissions of the KV. This is separate for all registration districts. Forms for inclusion on the waiting list can be found on the KV website.

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Step 4

If offered in the federal state: Participation in information events organized by the Chamber of Psychotherapists (PTK), for example the "Day of the Newly Qualified" of the PTK NRW, where the pension scheme is also presented and tips on acquiring a health insurance license are provided.

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Step 5

Search for a health insurance license that is becoming free, i.e. a "license applicant". There are, for example, advertisements in Psychotherapeutenjournal, Ärzteblatt or on the Internet (practice exchanges of the PTK or KV). It is also possible to find a vacant practice by word of mouth, for example at regulars' tables. You can find useful information on the consideration of whether a half or full panel seat suits your own ideas here.

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Step 6

Once you have found a health insurance fund license, you need to conclude a purchase agreement. It is advisable to seek legal advice for this. A clause should be included in the purchase agreement stating that it will only become legally binding if the admission is confirmed by the admissions committee. Sample contracts are available from the German Psychotherapists Association (DPtV).

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Step 7

Submission of the application to the KV for the vacant doctor's office. For this purpose, the donor informs the applicant of the reference number of the advertisement under which the application must be submitted. Ideally, all other applicants should withdraw their applications. 

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Step 8

Making the application for admission.

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Step 9

Admission is negotiated before the admissions committee. If you are the only applicant, this usually happens very quickly. Here, it is also possible to negotiate a possible wish to relocate the practice. The admissions committee examines in advance whether it is necessary to reoccupy the practice seat for reasons of supply. 

In the post-occupancy procedure, there are groups of applicants who receive privileged treatment. These are spouses or children of the retiring therapist, previously employed therapists of the retiring therapist and previous joint practice partners. The economic interests of the outgoing therapist are also taken into account. Therefore, it can be important in advance to create the formal and/or professional conditions that contribute to the privileged status, such as an employment relationship, job sharing or backup assistance. 

The criteria of professional suitability, licensing age and the dates of entry in the physician register and on the waiting list of the KV play a role in the admission of seats advertised for the first time or competing applicants. 

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Step 10

If one receives an admission notice, it becomes legally binding after 4 weeks. 

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Step 11

Application for billing approval at the KV. For psychological psychotherapists, the following billing procedures are to be approved by the KV if they have the appropriate qualifications: Behavioral, group, and child and adolescent psychotherapy, practice-based procedures, EMDR, second procedures (TP and psychoanalysis), and video treatment. 

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Step 12

Participation in KV events for newly licensed contract psychotherapists. These are usually compulsory events. 

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Once all these steps have been taken, the next step is to open and design the practice. Information on opening your own practice with regard to challenges, forms of cooperation and renting practice space can be found here. For information on insurance and retirement planning for (young) trainees, click here. 

Before the first day of practice, further registrations are necessary, among others with the state chamber of psychotherapists, the tax office to obtain a tax number, the professional association and the broadcasting license fee (GEZ).

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What are the options for financing your own practice? 

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First of all, it may be advisable to seek start-up advice from the municipality, the branch advisory service of the KV or, if you are starting up from an employment position, also from the employment agency. 

For financing through so-called external funds, i.e. loans, it is possible to turn to the house bank or specialized commercial banks such as Deutsche Apotheker- und Ärztebank, HypoVereinsbank, Deutsche Bank or Sparkasse. A sub-form of the borrowed funds are public conveyances, which come for example from promotion programs for existence founders:in of the federation, the Lands of the Federal Republic or the European Union. Public subsidies are usually characterized by low interest rates, long terms and a repayment-free period. Private loans can of course also be used for financing, but an official contract including interest agreements should be drawn up.

If the banks initially reject a financing offer, it is necessary to prepare a business plan. On the one hand, this should contain a text section with a description of the personal suitability and professional background, plans and description of the practice, the target group, the market and competitive situation as well as existing referral contacts, intended acquisition activities, the internal organization and future prospects. On the other hand, it should contain a numerical part with a list of investment costs, liquidity plan, profitability forecast and possibly an expert opinion. Consulting tax advisors or financial experts can be helpful to discuss and plan your own situation and plans. 

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Experience shows that the costs of setting up a practice range from €5,000-50,000, not including the costs of the cash office. The wide range of costs is due to the fact that the investments depend on the individual style, location, target group and the general willingness and ability to invest. A distinction must be made between one-time and ongoing costs. One-time costs are incurred, for example, for the furniture and inventory of the practice and advertising. A buffer of 10-25% for contingencies is advisable. The running costs consist of rent, office supplies, telephone, decoration, professional development (supervision, further training, specialist literature), travel expenses if necessary, personnel costs and general fees such as insurance and taxes.

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Last but not least: With all the tasks and demands that professional life as a self-employed psychotherapist entails, one's own mental hygiene should not be forgotten. This includes the separation of work and free time, task delegation, inter- and supervision as well as further education of professional and specialist associations.