Starting a Private Practice Checklist
Learn what's needed to get started!
1. Pick a brand.
The brand needs to be easy on the tongue and can easily translate into a domain name.
2. Get an attorney.
Create a PLLC
Get an EIN
Create patient contracts, consents, financial policies
3. Find an IT Company.
You will need computers, printers, internet, cameras, compliance. You can’t just use a computer from Best Buy. They aren’t HIPAA compliant. They will also support any software that you have. Generally a MSP company as they are geared towards small business. Most of them have minimum staff support or spenditure requirements. Expect about a $1200/month expense.
4. Buy a web Domain, Setup Email and Website.
You can’t use Gmail or any of free account. They are not secure. You will need backup and archival software to meet compliance requirements to make sure you aren’t deleting emails inadvertently.
5. Find a location.
Location is important. It is not just a location, but insurance companies base your payout rates based on your office location. Commercial leases are completely different. You will have to a commercial Real Estate Agent, property managers generally won’t even talk to you if you don’t. Expect at least a 3+ year lease. Any buildouts will cost $95+ per sqft. Look for office space that you won’t have to buildout. Negotiate discounted lease instead to save thousands. Negotiate a ramp up period. You want your first and second year as cheap as possible.
6. Get malpractice and liability insurance.
You’ll need it for your lease and credentialing.
7. Get Internet, you will need fiber, not cable modem.
This generally starts at about $300/month. Cable modem handles Telehealth and Phones systems poorly and quality issues will quickly present themselves.
8. Create a business banking account.
9. Find an accountant and/or bookkeeper and Software.
We recommend Quickbooks Online. You are all cash flow. You will not have any assets. If you plan on buying a house, do it before you start your practice, you won’t be able to buy one until you have at least 2 years of tax returns for the bank.
10. Look for a credentialer.
This sets the stage for your entire business. The wrong credentialer can sink your business if done incorrectly and add months, if not years to your start date with the payer. This is where you negotiate your payer rates. You get one chance at this, and you won’t even be able to attempt to re-negotiate for another 3 years. Credentialing can take between 3-12 months for a new practice. Credentialer needs to constantly follow up- no less than once a month with your payers and get it in writing. They like to submit the application and call it a day. Credentialing is not a 1-time service. Credentialing issues are ongoing and billing companies will not address credentialing issues. You can actually lose your credentialing one day and have it the next due to system issues with the payer. Your credentialer should be a long term service, not just a 1 time fee.
11. Look for an EHR.
This is very important. Choosing the wrong EHR can cost thousands of dollars and hundreds of hours of lost time. You are prescriber, get a good one like AthenaHealth or Epic. Anything under $1m in established billings ranges, but expect around 8% in fees for
Starting a Private Practice Checklist
anything under $1m. Beware of the 6% bargain billers. They don’t have the resources and technology needed to survive an audit or reporting.
Collections (No collections agency will be interested in your account, each outstanding balance is small and not worth their time, prepare to do this on your own.)
12. Find a billing company.
Some EHR’s offering limited billing services, but you generally need someone who understands billing. They will be needed to contact payer escalations. A single payer issue, could take hundreds of hours of phone calls, even after you have a contract in hand. You need to be able to get detailed reports of where all your financials are at. Nothing is more important than knowing your A/R and A/P. Get ready to learn billing, it isn’t as easy as it sounds and you need to know how to spot issues with your billing companies. Every insurance company has 100’s of plans and you can’t be in all of them. You will the billing company to verify benefits and eligibility with your contract.
13. Set your fee schedule.
Billing is game, don’t under bill patients, it could cost literally millions in lost revenue and affect surrounding practices. Insurance companies base their rates on the area averages.
Now it’s time to look for staff. This can be difficult. This person will be the core of your business. They will manage your business while you see patients. They will be responsible for billing questions, checking in patients, calling patients, scheduling patients. When they are on PTO, call in sick, quit, fired, you are without a core part of your business. It reduces patient time substantially when staff is unavailable. Expect to pay $15 - $20/hr. Employees cost 1.2 times their hourly wage due to employment taxes.
15. Now you need communications.
You will need Phone, SMS, and Telehealth. The phone system needs to support multiple users. Your IT company will help support and configure this.
16. Now you are ready to start practicing.
It will probably take you about 6-12 months to get here.
17. The easy part is done. Managing the day to day operations, billing, technology can be overwhelming. You will be managing about a dozen different vendors, contractors, and support systems. Now that you are in private practice, you have to live 90 days into the future. Any vacation, any sick day, any financial decision takes about 90 days to show the results of that change.
Essentials to a Med Provider later in practice.
Provider Assistant (MA, LPN, RN, etc) to manage triage, prior auths, refills, chart prepping. (add +1 staff at minimum $20/hr or $40k/yr)
Spravato Treatment Center – Very lucrative, but extremely administratively intensive. Start slowly and build, insurance companies don’t like to cover this treatment and requires special fee schedules setup during credentialing. Expect lots of prior authorizations and long hours on the phone with the pharmacy and insurance company, even after the prior auth is approved. (Add +1 staff at minimum $25/hr or $50k/yr)
Chart Scrubbing – someone who checks and looks over your CPT codes. This will help you get paid faster and more accurate. Different insurance companies have different parameters. Example for telehealth: modifier is 95 or GT depending on the payer. POS 02 mostly required, but not always, depending on payer.
Things to consider.
Group contracts pay better than individual contracts. Consider joining a PHO like Methodist or CHI to help with credentialing. Methodist Behavioral Health is closed and only current groups can join. This is a very lucrative and exclusive PHO. Medical Benefits and Behavioral Benefits are very different fee schedules and different credentialing contracts. Generally, you will credential medical or behavioral health. They will help with the initial burden of credentialing and they can provide a good escalation contact when needed for denied claims.
Remember, you are individual, and insurance can and will push you around. Know the laws, they are your only weapon. Make sure you set yourself up for an audit. An audit will happen, make sure you have the EHR that can handle such an audit or get ready to spend large amounts of money and time. They can audit 7 years back and they can take back all the claims they deem unsatisfactory. You will want an attorney for an audit. A single take back could cost you every paid claim. They will pull the money from your account until you prove you are satisfactory.
Make sure you have software for DEA audits. You need to track samples and prescriptions, such as Spravato, that your office touches.