Key Takeaways

• The PLLC structure is most common for small to medium-sized therapy practices in Washington
• Total PLLC setup costs a minimum of $860 – $1,900 depending on whether you plan to bill Medicaid
• Setup time is about one month for a private pay practice and four to seven months for a practice billing insurance

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To start a therapy practice in Washington State, you can either do business as a sole proprietor—the default option—or form a separate business entity. For most therapy practices, the best type of business entity is a professional limited liability company (PLLC).

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Here’s how to form a PLLC therapy practice in Washington, including a step-by-step guide plus a timeline and total price breakdown.

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LLC vs. PLLC therapy practice in Washington State

A therapy practice in Washington State can choose from one of the following business entities:

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• Sole proprietor (the default)
• PLLC
• Professional Service Corporation (PS/PC)
• Limited Liability Partnership (LLP)

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As a therapist licensed in the state of Washington, you cannot form an LLC. You must form a PLLC instead.

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A PLLC offers licensed professionals extra liability protection. Namely, if your PLLC therapy practice has multiple owners, and one of them is sued for malpractice, the PLLC structure prevents the other members from being included in the lawsuit.

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The LLP business structure is less common than the PLLC for therapy practices with multiple owners. The PC business structure is common for healthcare facilities, but because of complex reporting requirements it’s not a good fit for most small- to medium-sized therapy practices.

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This guide focuses on the steps required to form a PLLC for your Washington therapy practice.

Can you be a sole proprietor therapist in Washington?

If you don’t take the steps to form another type of business entity, Washington State—and the IRS—treat you as a sole proprietor by default.

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But you can’t just announce to the world that you’re open for business and start accepting new clients.

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First, you must register a trade name (the Washington equivalent of a doing business as (DBA) name), even if you’re operating under your own name. You’ll also need to apply for a business license and a city or municipal endorsement.

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It’s also a good idea to register an Employer Identification Number (EIN) with the IRS. It’s free, takes just ten minutes, and will make the transition smoother if later you decide to form a PLLC.

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All these essentials—from getting an EIN to registering your business name—are covered below. Steps applicable to sole proprietors are marked with an asterisk (*).

How to start a PLLC counseling practice in Washington

Note: If you’re a sole proprietor, follow the steps below that are marked with an asterisk (*). These steps are necessary for all businesses, even ones that don’t plan to form PLLCs.

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This step-by-step guide to starting a PLLC therapy practice in Washington is meant as an overview.

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It assumes that your therapy practice is brand new. If you’re already operating as a sole proprietor, the steps may be different. For instance, if you already have a business checking account, or if you are already paneled with insurance, you may be able to skip those steps.

1. Register an EIN with the IRS

The IRS uses your employer identification number (EIN)—also known as a Federal Employer Identification Number or a Federal Tax Identification Number—to track your business for tax purposes.

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More importantly, you need one in order to open a business checking account—the next step on this list.

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You can register an EIN for free directly through the IRS website.

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For more about EINs, check out What Is an EIN and Do You Need One for Your Practice?

2. Choose and reserve your PLLC name

Use the Secretary of State's Corporations and Charities Filing System (CCFS) to determine whether the name you’d like to use for your PLLC is available. Your chosen name must include “PLLC” or “P.L.L.C.”

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This step is not absolutely essential—you can go ahead and register your PLLC without checking name availability first—but it helps avoid any unexpected snags during the registration process.

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Your PLLC’s name does not have to be the one you use to advertise your practice. Later, you have the option of registering a trade name; you can use your trade name publicly, while your PLLC’s registered name appears on your business license, tax forms, and other official documents.

3. File your Certificate of Formation (Professional LLC) with the Secretary of State

Your Certificate of Formation (Professional LLC) is the form you file with the Washington Secretary of State, Corporations & Charities Division to officially register your PLLC.

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In order to complete the form, you’ll need:

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• Your PLLC’s name
• The name of your registered agent and their address
• Your practice’s address
• The name of at least one governor or member (usually yourself)
• A description of the services you offer (eg. “mental health counseling”)

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The fastest, easiest way to file is online via the Washington Corporations and Charities Filing System (CCFS). It’s free to create a CCFS account, and you can pay filing fees with your credit card.

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The total cost to file online is $200. Online filing includes your initial Annual Report. This report normally costs $30 to file.

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Processing typically takes five days, but may take up to 15 days depending on volume. For expedited three-day processing, you can pay an additional $100.

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Once your filing is complete, you’ll receive a unified business identifier (UBI). You’ll use this number in future dealings with the Secretary of State. You’ll also use it to identify your business when applying for a business license.

4. Register a trade name and apply for a business license*

Your trade name is the name under which you publicly do business. You only need a trade name if you intend to use a name different from the one you submitted when you registered your LLC.

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If you’re a sole proprietor, you need a trade name even if you plan to operate under your own legal name.

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You register your trade name at the same time you apply for a state business license. Every business in Washington—including sole proprietors—needs a business license in order to operate legally.

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While applying for your state business license, you’ll also apply for a city or county endorsement. An endorsement is effectively a local business license under another name.

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The fees for a city or country endorsement range from as low as $10 to $100 or more. Most cities and municipalities charge different fees depending on whether your business is based in a commercial space (ie. your therapy practice’s office) or at home (ie. for fully-remote practices).

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To check fees based on your location, visit the Department of Revenue (DOR)'s city endorsement and county endorsement directories.

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(Also, heads up: Some types of businesses require a state endorsement. But therapy practices do not—so you shouldn’t have to worry about this.)

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Here’s how to apply for a state business license and city or county endorsement online:

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1. Make sure you have the information you need on hand:
   • Your UBI (received when you registered your PLLC)
   • Your LLC's legal name (ending in “PLLC” or “P.L.L.C.”)
   • Your business structure (PLLC)
   • The names of owners and governors
   • The city or county where you are based (which determined which endorsement you need)
2. Go to the DOR's Business Licensing Wizard
3. Search for and select your business activities (eg. “Therapy, Counseling” or “Marriage & Family Therapy”)
4. Select your structure. There is no option for “PLLC”; instead, select “LLC.”
5. Enter employee information. This pertains to whether you will be hiring minors. You can select “I won't have employees” if you are a solo practice.
6. Enter your business address. If you are still looking for a commercial space to rent and don't have an address yet, you can opt to provide your city name instead.
7. Select any additional cities (besides the one you entered in the previous step) where you may need to get endorsements

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After completing these steps, you will be given the total cost of registering your business. You can then click “Apply Now” to complete the application online.

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In order to apply online, you'll need a Secure Access Washington ID, which you can create for free.

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Processing times for business license applications vary depending on the city where you apply for an endorsement. Expect a wait of seven to 14 days.

5. Open a business checking account

Opening a business checking account now makes it easier to track your tax deductible expenses. It's also essential for maintaining the liability protection offered by the PLLC business structure.

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If you use your personal checking account to pay business expenses, you not only make it harder to track them and take advantage of tax deductions—you could pierce the corporate veil and compromise some of the liability protection a PLLC grants you.

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6. Obtain NPIs

By this point, you've officially registered your PLLC, and you're ready to begin operating your therapy business in Washington.

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Now it's time to get national provider information numbers (NPIs). You need these in order to identify your practice to insurance companies.

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Even if you don't plan on accepting insurance, you require NPIs to prepare superbills for clients filing out-of-network claims.

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There are two types of NPI:

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• A Type 1 NPI identifies an individual practitioner
• A Type 2 NPI identifies an organization (your practice)

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You may not need a Type 2 NPI if you're the only clinician at your practice. But getting one now sets you up to hire employees or supervise associates later on.

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You can register both types of NPI online, for free, via the NPI application page.

7. Purchase Washington malpractice insurance

You need malpractice insurance in order to legally practice as a mental health clinician in Washington.

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It's important that you purchase a plan with coverage of at least $1 million. In Washington State, that's the minimum amount of coverage you need to be protected from malpractice liability under a PLLC business structure.

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If you're transitioning your practice from a sole proprietorship to a PLLC, you may already have malpractice insurance. But it's important to carefully review your policy to make sure you have the necessary coverage for a PLLC.

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If you're forming a group practice or hiring employees, each clinician must have personal malpractice insurance, and the PLLC as a whole must have its own policy.

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For more, see Do Therapists Need Professional Liability Insurance?

8. Create a DataSpring (CAQH) profile

If you're planning to join insurance panels, DataSpring (formerly CAQH) is essential.

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Your DataSpring profile is a central source for all your professional information. Rather than completing multiple applications for multiple insurance panels, you can simply authorize different insurers to access your DataSpring profile. DataSpring has become the standard credentialing service used by most insurers.

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You can create your profile for free. Before you do, make sure you have the necessary information on hand:

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• Your basic personal information
• A history of your education and training, including graduate school and internships
• Your license type and board certification
• Your practice name, address, and contact information
• Your practice's services and hours of operation
• A list of colleagues
• Malpractice insurance information
• Work history with references
• Disclosure and malpractice history

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Each clinician at your practice needs to create their own individual profile in order to be credentialed.

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It takes some time to set up, but once your DataSpring profile is live, you're ready to apply to insurance panels.

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Heads up: Every 120 days, you'll need to confirm that your DataSpring profile info is accurate. Mark the dates in your calendar so you won't forget.

9. (Optional) Enroll in Apple Health (Medicaid) and PECOS

In order to charge Medicaid and Medicare, you first need to enroll in Apple Health (state level) and the Provider Enrollment, Chain, and Ownership System (PECOS) (federal), respectively.

How to enroll in Apple Health (Medicaid)

1. Review application documents. These include the Core Provider Agreement, a Debarment Statement, and a completed W-9. If you provide treatment to clients under the age of 19, you must also include a Children and Youth Mental Health Provider Attestation Form. You do not need to sign these documents now—you can e-sign them when you complete your online enrollment. For more info, visit the Washington State Health Care Authority (HCA) enrollment page.
2. Start your ProviderOne enrollment. ProviderOne is the platform you use to complete your application. You can start a new enrollment here.
3. Complete Step One and note your application ID number. Once you complete the first step of your application, you'll get a 14-digit ID. The enrollment process is lengthy—it can extend to 18 additional steps—and if you need to stop part way, your ID number allows you to resume your ProviderOne enrollment.
4. Complete all enrollment steps and pay your application fee. For 2026, the application fee is $750.
5. Wait for your enrollment to be confirmed. HCA approval takes 30 days at minimum.
6. Apply for credentialing. Once you're enrolled in Apple Health and have a ProviderOne profile, you're ready to apply to managed care organizations (MCOs). The application process is similar to that for private insurance. Expect to wait 90 – 180 days for each application to be approved. Major MCOs for mental health services include Molina Healthcare of Washington, the Community Health Plan of Washington, and Coordinated Care.

How to enroll in PECOS (Medicare)

1. Make sure you meet federal requirements. Medicare requires you to have 2,000+ hours of supervised clinical experience before you can enroll.
2. Set up your Identity & Access Management (I&A) account. It's free to open an account, and approval typically takes one to three days. Have your NPIs on hand before starting.
3. File CMS-855I as an individual. To file online, log in to your PECOS account, select “New Enrollment,” and select your license type.
4. Upload necessary documents. To finish filing CMS-855I, you'll need a copy of your state license, malpractice insurance certificate, W-9, your degree, and documentation of your supervision hours.
5. Enroll your PLLC as a group and reassign benefits. To enroll your practice, file CMS-855B online. You'll need to list yourself as an individual on CMS-855B, then update Section 6 of your individual CMS-855I to include your group info.
6. Choose participating or non-participating status. If you choose to be a participating provider, you'll accept Medicare's full rate and be paid directly. If you're non-participating, you can charge more, this produces some friction with billing—in most cases, new providers choose participating status.
7. Wait for approval. Once both CMS-855I and CMS-855B have both been submitted, plan on waiting 60 – 120 days for approval. You can use your application control number (ACN) to track the status of your submission. Do not attempt to bill Medicaid until you have been approved.

10. Set up EHR, billing, accounting, and other backoffice systems

Your backoffice includes all the behind-the-scenes systems and procedures your practice needs run effectively. Your exact backoffice needs will depend on your practice—its size, number of clinicians, and plans for the future. But, at minimum, plan on setting up:

Bookkeeping

This is the day-to-day practice of recording revenue and expenses. You may decide to do your own bookkeeping, or have it handled by the experts at Heard. Check out The Complete Guide to Bookkeeping for Therapists.

Accounting

Accounting is one level up from bookkeeping. You take your records of revenue and expenses and use them to prepare financial statements, track performance, and file taxes. You can hire a professional accountant to do this, or use an all-in-one bookkeeping service designed for therapists (Heard). For more, see What's the Difference Between an Accountant and Bookkeeper?

Electronic Health Records (EHR) and billing

In order to remain HIPAA compliant, you need to securely store clients' electronic health data. The easiest and most effective way to do so is with an EHR system, which typically also includes tools for billing. Learn more from HIPAA-Compliant Payment Methods for Private Practice.

Payroll

If you elect S corporation status and pay yourself a salary, or if you hire employees, you'll need to handle tax withholding and remittance, benefits, paid time off, and other details. The simplest way to do so is with a payroll service like Gusto (Heard comes integrated with Gusto for handling payroll).

How long does it take to start a therapy practice in Washington State?

The time it takes to start your PLLC therapy practice in Washington depends on your goals.

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If your goal is to start treating private pay clients ASAP, you can get up and running in 30 days.

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That's about the time it takes to register an EIN and NPI, file your Certificate of Formation, and apply for business licenses online. By then, you should also have your EHR and billing backoffice set up, so you're ready to charge clients and accept payments.

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If your goal is to start billing insurance and/or Medicare/Medicaid, add three to six months to your initial one month of setup. Credentialing—both with private insurers and MCOs—is a slow process.

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To form a PLLC therapy practice that bills insurance, plan on a startup time of four to seven months.

PLLC Therapy Practice in Washington — Timeline

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How much does it cost to start a PLLC therapy practice in Washington State?

The cost to start a PLLC therapy practice in Washington State and begin seeing clients is $860 – $1,150, depending on your location and the cost of the malpractice insurance you purchase.

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The cost of a city or county endorsement can range in price from $10 to $100 or more. Malpractice insurance varies in price depending on which company you purchase it from, whether it is bundled with other business policies (like general liability insurance), and the insurer's individual assessment of you and your practice.

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If you intend to bill Medicaid, add $750 to your total costs; that's the enrollment fee for Apple Health. Once you are enrolled with Apple Health, you can apply to become credentialed with MCOs.

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So, the total cost to start a therapy practice in Washington State that bills Medicaid is about $1,610 – $1,900.

PLLC Therapy Practice Cost in Washington

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Note that this price breakdown doesn't take into account backoffice costs, such as EHR software, bookkeeping and accounting services, and payroll (if you have employees or elect S corp status as a solo practitioner).

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For a detailed look at other expenses not covered here, check out How Much Does It Cost to Start a Therapy Practice?

Summary

• Many therapists choose the PLLC business structure because of its flexibility, ease of setup, and built-in liability protection
• Therapists in Washington State are licensed professionals, and must form PLLCs rather than LLCs
• The timeline to start a therapy practice in Washington extends considerably (an extra three to six months) if you intend to bill insurance
• Backoffice costs—EHR, accounting/bookkeeping, payroll—are highly variable, and depend on the size and complexity of your practice
• Your malpractice insurance must provide a minimum of $1 million coverage in order for your PLLC to provide liability protection

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This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult their own attorney, business advisor, or tax advisor with respect to matters referenced in this post.

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