Starting a Medical Practice

Considerations for Every Aspiring Practice Owner

Whether you’re starting from scratch or breaking out on your own from an existing practice, opening a new medical practice is an involved process. There are impactful decisions at every stage, with important options to weigh. So, where should you start?

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Entities and Attorneys

When and How Should You File?

Around six months before your practice opens, you should determine what type of entity you’ll conduct your business under. The entity type determines how a business is taxed, managed, and owned.

Most practices are LLCs (Limited Liability Companies), but it’s critical to understand the laws in your state.
In New York State, PLLCs (Professional LLCs) are the only type of limited liability company that insurance carriers will contract.
Other practices will be organized as Professional Corporations (PC).

Establishing your PLLC or PC takes roughly 3 months, but filing incorrectly can at least double that time frame. Hiring an experienced attorney can help you correctly file for the right entity type, ensuring timely issuance of your entity to be eligible to apply for participation with insurance companies in your practice area.

Attorneys can also help near the end of the process when you’re choosing insurance carriers. Before participating with them, have your attorney review the terms of the agreement as these companies try to insert untenable obligations or unusual rights of course, slanted in the favor of the insurance company. It’s not just about the rate they will pay!

Office Space

Where and How Much?

Your practice is nothing without a practice location. To find the right fit, aim to strike a balance between size, budget, and your specific needs. To find the perfect office space, consider the following:

Location

Is the building near main roads and public transportation?
Is the building visible and recognizable from the street?
Is the location accessible for your target patient demographics?
Are similar or competing practices nearby?

Features of the Building

Does the building offer enough parking?
Consider your specialties; can the building’s layout accommodate the waiting areas, offices, equipment, exam rooms, and other facilities you need?
Is the building in good condition? If not, assess its maintenance costs.
Is the building big enough for your needs? Is it too big?

Operations

Is the building zoned appropriately for a medical practice?
Review the lease; consider rent costs, renewal options, and lease length.
What are the utility costs?
What furniture, equipment, and supplies do you need? Where will you get it, and how much will it cost?

Check With Other Tenants

Does the landlord have a good reputation?
Is the landlord attentive?

Choosing Your EMR

What Sets Them Apart?

Electronic Medical Records are important for storing sensitive patient info, but there are many EMR platforms to choose from. It’s best to compare the pros and cons of each EMR with your practice’s specialties.

An ideal EMR system should:

Have an intuitive interface
Have robust security features
Include features that streamline the record-keeping process

The right EMR system can greatly benefit the operations of a practice. They can streamline the billing and claims process, facilitate efficient communication of important information, and help ensure HIPAA compliance.

Insurance Carriers

Who Will You Work With?

When choosing insurance carriers to participate with, know your practice’s specialization. Knowing which codes you’ll likely use, and the reimbursement for those codes across their various lines of business will help you decide whether or not you wish to participate.

Another important consideration is patient demographics. Participate with carriers that cover a significant percentage of your likely patients. Reimbursement rates, claims processing times, and EMR system compatibility are also useful to determine which carriers are right for you.

Billing and Coding

Is DIY Really More Cost Effective?

Billing and coding are vital to a practice because of their direct relationship to revenue. The big question for any new practice owner is whether they want to conduct billing in-house or outsource it to an RCM company.

In-sourced billing gives a practice more control over the process but means hiring and supporting billing staff and being financially responsible for errors.

Outsourcing billing to a third party means less control, but allows you to hold the RCM company to performance metrics you’ve agreed on in the contract. It also allows fewer headaches when dealing with staff. Any staff turnover is the RCM company’s responsibility, and they must maintain their KPIs!

With an experienced and reputable RCM company behind a practice’s billing, your financial results should far outpace what most practices can achieve internally.