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State setup guide

How to Start a Therapy Private Practice in Michigan

A state-aware setup guide for Michigan therapists starting solo, group, or hybrid private practices. Use this to separate national setup steps from Michigan-specific license, entity, assumed-name, tax, telehealth, reporting, Medicaid/CHAMPS, and payer requirements.

Last reviewed:August 24, 2026
Written by:Bomi Team
Reviewed by:Billing and credentialing specialist

Start with license readiness

Your license type determines whether you can practice independently, need supervision, or should set up inside a group practice first. Confirm the current rules with the state board before accepting clients.

This table is a setup readiness starting point, not a substitute for current board review.

Next step: confirm your Michigan board status

Use the Michigan Board of Counseling, Board of Social Work, Board of Marriage and Family Therapy, or Board of Psychology before deciding whether to setup independently, stay supervised, join a group, or build a hybrid model.

Michigan social-work implementation note

Do not label the Michigan clinical social-work row as LCSW. Use LMSW — Clinical practice designation, and keep macro-only, limited master's, bachelor's, and social-service-technician workflows separate from independent psychotherapy billing.

Michigan counselor Professional Disclosure Statement

For LPC and LLPC workflows, furnish the Professional Disclosure Statement to prospective clients before counseling begins, maintain a separate PDS for each practice location, and file a new PDS with the board within 30 days when required information changes. Wire delivery, acknowledgement, fee and complaint information, location accuracy, telehealth language, and update reminders into intake and the EHR.

Michigan limited-license Medicaid update

MDHHS Bulletin MMP 26-30 takes effect September 1, 2026. Affected limited licensed providers need individual Type 1 NPIs, Rendering Only CHAMPS enrollment, organizational billing-provider and fully licensed supervisor associations, and unique rendering-provider identification on professional claims for dates of service on or after that date.

CredentialIndependent practice?Supervision issue?Entity/business noteBomi relevanceOfficial source
LPC — Licensed Professional CounselorGenerally yes, once the full Michigan LPC license is active.The full license allows the practice of counseling. Michigan's LPC path includes post-degree supervised experience; confirm the active license and any current board conditions before launching.Good fit for solo, group, or hybrid setup once license, entity or assumed name, NPI, CAQH, W-9, malpractice, EHR, bank, service-location, and payer records match. Include Michigan's Professional Disclosure Statement workflow.Strong fit for credentialing, payer enrollment, EFT/ERA, eligibility, claim setup, denials, and revenue operations.Michigan professional counselor licensing guide
LLPC — Limited Licensed Professional CounselorNo independent solo-practice setup. Treat as a supervised path.Michigan's limited counselor license allows counseling under the supervision of a Michigan LPC and may be renewed no more than 10 times.Do not build payer-facing solo-practice assumptions for an LLPC. For groups, verify the supervisor, payer, CHAMPS, rendering-provider, and claim rules before billing.Bomi can support a supervised group workflow only if the group, supervisor, payer, and claim configuration are compliant.Michigan limited counselor licensing guide
LMSW — Clinical practice designationGenerally yes for clinical therapy private practice once the full license and clinical designation are active and payer-recognized.Michigan uses the LMSW title rather than LCSW. The full license requires post-degree supervised experience, and clinical and macro designations must remain distinct in practice and payer records.Good candidate for solo, group, or hybrid setup once the LMSW clinical designation, NPI, CAQH, entity, W-9, bank, service location, EHR, and payer records match.Strong fit for credentialing, commercial payer enrollment, CHAMPS, claim setup, denial follow-up, and recredentialing.Michigan master's social work licensing guide
LMSW — Macro-only / nonclinical positioningDo not position as a normal independent psychotherapy path unless the clinical designation is also active and applicable.Michigan distinguishes LMSW designations. Keep macro-only work separate from clinical assessment, diagnosis, treatment, and psychotherapy billing.Avoid mapping macro-only social work to psychotherapy payer enrollment without specific board and payer confirmation.Bomi support depends on whether the provider also has a payer-recognized clinical designation and whether the payer accepts the service.Michigan master's social work licensing guide
LLMSW — Limited Master's Social WorkerNo independent solo-practice setup. Treat as a supervised path.Michigan says the limited master's license is for accumulating supervised experience under a Michigan LMSW with the applicable macro, clinical, or both designations and may be renewed no more than six times.Do not set up an LLMSW as an independent solo provider. For group billing, verify supervisor, payer, CHAMPS, rendering-provider, and claim rules.Bomi can help a group track supervision and payer requirements, but payer reimbursement is not automatic.Michigan limited master's social work licensing guide
LMFT — Licensed Marriage and Family TherapistGenerally yes, once the full Michigan LMFT license is active.The full license allows the practice of marriage and family therapy. Confirm the active license and any current board conditions before launching.Good fit for solo, group, or hybrid setup once license, entity or assumed name, NPI, CAQH, W-9, EHR, bank, service-location, and payer records match.Strong fit for credentialing, payer enrollment, EFT/ERA, claim testing, denials, and recredentialing.Michigan marriage and family therapist licensing guide
LLMFT / Educational Limited MFTNo independent solo-practice setup. Treat as a supervised path.Michigan's educational limited MFT license allows the licensee to obtain experience or client-care hours under the supervision of a fully licensed Michigan MFT.Use supervised or group-practice language. Do not assume direct commercial or Medicaid billing without payer and CHAMPS confirmation.Bomi can help only if the group, supervising LMFT, payer, and billing model are configured correctly.Michigan educational limited MFT licensing guide
Licensed PsychologistGenerally yes, once the full Michigan psychologist license is active.The full license allows the practice of psychology. Confirm current supervised-experience, examination, renewal, and any compact requirements with the Board of Psychology.Good fit for solo, group, or hybrid setup once license, entity or assumed name, NPI, CAQH, W-9, malpractice, EHR, bank, service-location, and payer records match.Strong fit for payer enrollment, Medicaid/CHAMPS setup, commercial payer contracting, claims, denials, and revenue operations.Michigan psychologist licensing guide
LLP — Master's Limited PsychologistNot a fully independent solo-practice credential. Treat as supervised.Michigan says a master's limited psychologist may practice psychology while under the supervision of a fully licensed psychologist.Do not implement this as a fully independent solo practice. Verify payer, Medicaid, supervisor, and claim rules; LLP Medicaid rules differ from the limited-license update that takes effect September 1, 2026.Bomi can help track supervised billing requirements, but the payer model must be confirmed first.Michigan master's limited psychologist licensing guide
TLLP / Doctoral temporary or educational limited psychology credentialsNo independent solo-practice setup. Treat as temporary, educational, and supervised.These credentials support supervised postgraduate, internship, or post-degree experience toward another psychology license. Confirm the exact credential, supervisor, setting, and upgrade path with the Board of Psychology.Avoid payer-facing independent-practice assumptions. These credentials may appear in supervised employment, training, group, Medicaid, or agency workflows rather than an ordinary solo-practice setup.Bomi support depends on the supervising organization, Medicaid/CHAMPS setup, payer rules, and claim configuration.Michigan psychology licensing guides
Next step: confirm your state board rulesUse the official Michigan licensing source before you decide whether to setup independently, stay supervised, or join a group first.

National steps

These steps are not unique to Michigan, but they still need to match the state, address, entity, tax, payer, and EHR details you use for setup.

  • Decide Type 1 NPI versus Type 2 NPI and whether the practice will bill under an individual, sole proprietor, organization, group, or rendering-provider model.
  • Create or update CAQH and keep attestations current.
  • Align EIN, W-9, business bank account, legal entity or sole-proprietor identity, assumed name if any, and payer-facing business records.
  • Confirm HIPAA privacy/security, Notice of Privacy Practices, consent forms, Good Faith Estimate workflows, release forms, and documentation setup.
  • Select EHR, clearinghouse, billing workflow, payment processor, ERA/EFT workflow, and denial-management process.
  • Build a credentialing packet with license, supervision status if applicable, malpractice, NPI, CAQH, W-9, bank documentation, taxonomy, service address, telehealth policy, counselor Professional Disclosure Statement if applicable, and supervisor information if applicable.
  • Track payer applications, effective dates, portals, claim test dates, ERA/EFT status, Medicaid/CHAMPS records, service-location records, telehealth requirements, and recredentialing deadlines.
Next step: clean up NPI and CAQHMake sure your individual NPI, organizational NPI decision, taxonomy, CAQH profile, W-9, and practice address are consistent before payer applications start.

State-specific steps

Business entity options

Michigan therapists should confirm their business structure with a Michigan attorney or tax professional before filing. Entity setup is separate from professional licensure and payer enrollment. Depending on ownership, discipline, tax elections, payer strategy, and risk tolerance, a Michigan practice may involve a sole proprietorship, LLC, professional service LLC, professional service corporation, corporation, partnership, assumed name, or another structure approved by counsel and recognized by the applicable board and payer. Do not imply every therapist must use one professional entity form. If the practice uses a public-facing name different from its legal name, check the correct assumed-name workflow before launching: Michigan entities use the applicable Certificate of Assumed Name, while sole proprietorships and general partnerships may register an assumed name with the county clerk. Also check county and local licensing, zoning, and permitting. Before payer setup, keep legal name, assumed name, EIN, NPI, CAQH, W-9, malpractice, EHR, clearinghouse, bank, service location, and payer applications consistent.

Next step: align entity details with billing recordsBefore payer setup, make sure your entity name, EIN, W-9, NPI, CAQH, EHR, and bank details will all tell the same story.

State and tax registration

Confirm Michigan tax obligations with a Michigan tax professional before setup. Michigan Treasury registration depends on the actual entity, hiring plan, taxable sales, and tax classification. Do not imply every therapy practice needs a sales-tax license. Check Michigan Treasury Online registration, entity tax treatment, payroll withholding if hiring employees, sales/use tax only if the practice has taxable sales or rentals, local city tax or registration obligations, and accounting separation for therapy services versus merchandise, products, workshops, or other add-ons.

Next step: prepare EIN, banking, and payer paperworkUse the setup checklist to track financial setup before credentialing asks for tax and payment details.

Telehealth notes

Michigan telehealth setup should confirm the client's physical location, clinician license or other current authority to practice, consent and proof-of-consent documentation, privacy/HIPAA safeguards, emergency resources, supervision status if applicable, payer rules, place-of-service and modifier rules, and documentation workflow. Telehealth is not a shortcut around Michigan licensure, scope, supervision, consent, CHAMPS, or payer requirements. Michigan law requires a health professional to obtain consent before providing telehealth except where otherwise provided. For Medicaid, use the current Provider Manual, policy bulletins, and payer rules because the MDHHS telemedicine reference page does not guarantee coverage. For cross-border care, confirm current authority in the client's location; Michigan has been a PSYPACT member since March 29, 2023, but compact authority does not replace payer enrollment, Medicaid rules, or location documentation.

Next step: configure EHR and telehealth workflowsSet the client-facing workflow for scheduling, consent, documentation, payments, and billing before the first appointment.

Mandated reporting notes

Add Michigan mandated-reporting reminders to intake, informed consent, clinician handbooks, telehealth workflows, office procedures, and supervision workflows. MDHHS lists 855-444-3911 and online reporting for suspected child abuse or neglect. A mandated reporter who calls must also send the DHS-3200 written report to Centralized Intake within 72 hours; an internal report to a supervisor does not replace the direct MDHHS report. MDHHS uses the same hotline for suspected vulnerable-adult abuse, neglect, or exploitation. Keep 911 and local emergency instructions, documentation steps, and telehealth-specific safety procedures easy to access.

Next step: build forms and policy review into setupKeep clinical policies, privacy workflows, intake forms, and billing policies on the same setup checklist.

Insurance credentialing notes

For Michigan Medicaid, start with CHAMPS and then separate fee-for-service, Medicaid Health Plan or MCO contracting, PIHP specialty behavioral health workflows, group billing, rendering-provider associations, supervisor associations, EFT/ERA, portal access, and commercial payer enrollment. All providers serving Michigan Medicaid beneficiaries must be screened and enrolled in CHAMPS and approved before reimbursement. Map the practice to the correct individual/sole-proprietor, rendering/servicing, group, facility/agency/organization, or other enrollment type and keep NPI, taxonomy, license, pay-to, ownership, service-location, bank, and association records current. MDHHS Bulletin MMP 26-30, issued July 31, 2026 and effective September 1, 2026, applies to master's-level TLLPs, limited licensed counselors, educational limited MFTs, and limited licensed master's social workers. Affected providers must enroll with a Type 1 NPI as Rendering Only, associate to an organizational billing provider and a Medicaid-enrolled fully licensed supervisor of the same profession, and be uniquely identified in the Rendering Provider field on professional claims for dates of service on or after September 1. They are not directly reimbursed; payment goes to the associated Type 2 organizational billing provider. The bulletin leaves existing LLP and doctoral educational LLP requirements unchanged and directs MCO and PIHP providers to their separate plan requirements. For commercial payers, verify each product before billing any supervised clinician; state permission to practice is not the same as payer permission to reimburse.

Next step: Map your payer listChoose target payers, gather packet details, and track every application through effective date and claim readiness.

Where Bomi can help in Michigan

Bomi supports therapy practices in every state across the U.S. This guide organizes the Michigan-specific setup questions that sit around the national NPI, CAQH, billing, and credentialing workflow.

Bomi can help once your Michigan setup path reaches NPI, CAQH, credentialing, payer attestations, CHAMPS setup, eligibility checks, claims, denials, balances, and revenue management. For state-specific legal, tax, entity, supervision, clinical-scope, Medicaid, CHAMPS, PIHP, or payer decisions, confirm with the Michigan board, attorney, tax professional, MDHHS, CHAMPS, PIHP, Medicaid Health Plan, or commercial payer before acting.

  • Build a payer-ready credentialing packet.
  • Track CAQH, NPI, license, supervision status, malpractice, W-9, EFT/ERA, and payer portal tasks.
  • Keep legal entity, assumed name, EIN, W-9, NPI, CAQH, EHR, clearinghouse, bank, office location, telehealth workflow, and payer records aligned.
  • Separate solo, group, and hybrid workflows.
  • Separate commercial payer, Medicaid/CHAMPS, Medicaid Health Plan, PIHP, EAP, and cash-pay workflows.
  • Track Michigan counselor Professional Disclosure Statement delivery, location-specific versions, acknowledgement, and update reminders for LPC and LLPC setup paths.
  • Track limited-license supervision, rendering-provider, billing-provider, and supervisor-NPI requirements.
  • Track payer applications, effective dates, claim test dates, denials, recredentialing, and Medicaid revalidation.
Next step: talk through credentialing and billingBring your Michigan setup stage, payer goals, and current NPI / CAQH status. Bomi can help turn the setup into a working revenue pipeline.

Ready for the payer path?

Bomi can help with CAQH, payer applications, claims, denials, and revenue workflows.

Use the state guide to confirm the setup requirements, then bring in Bomi when you are ready for credentialing and insurance billing operations.

Get credentialing help