{"id":20139,"date":"2018-05-10T16:39:33","date_gmt":"2018-05-10T20:39:33","guid":{"rendered":"http:\/\/www.carecloud.com\/continuum\/?p=20139"},"modified":"2025-10-17T14:20:32","modified_gmt":"2025-10-17T14:20:32","slug":"how-to-start-a-medical-practice","status":"publish","type":"post","link":"https:\/\/carecloud.com\/continuum\/how-to-start-a-medical-practice\/","title":{"rendered":"How to Start a Medical Practice"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Starting a medical practice is an exciting experience. It provides the freedom to work for yourself and stay independent of larger health systems. Whether you are fresh out of residency or moving away from existing medical practice, there are many items to consider before, during and after launching a new medical practice.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This article is designed to walk you through the various items you will need to account for when starting a medical practice. Before we begin, it is good to note that purchasing an existing practice is a viable alternative to starting a medical practice from scratch. Before you start planning, it may be useful to determine whether <a href=\"http:\/\/www.physicianspractice.com\/finance\/physicians-start-guide-buying-existing-practice\">purchasing an existing practice<\/a> or starting from scratch is right for you.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Initial Challenges<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">When starting any business, it is important to consider the challenges you\u2019ll face.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Some of the most common challenges include cash flow, <a href=\"https:\/\/www.carecloud.com\/continuum\/4-ways-improve-patient-collections\/\">patient vs. payer collections<\/a>, time management, work\/life balance, hiring, setting up systems, and <a href=\"https:\/\/www.carecloud.com\/continuum\/the-physicians-guide-to-marketing\/\">marketing your practice<\/a>. Some of these will be harder than others and much of that variance will depend on your network and level of experience.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Identify your strengths and weaknesses early on so you can delegate the work that is outside of your purview.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Business Planning<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">You can\u2019t start a successful business without a business plan. Pre-planning can be one of the more challenging yet rewarding times in the lifecycle of starting a medical practice. During this time you\u2019ll need to establish your goals, objectives, mission, and values. This is where you will start your financial modeling and budget planning in addition to creating a timeline for your practice to work against as you build. This plan should be your guiding light for the next few months as you progress towards opening your doors for the first time. Steps during business planning include:<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Create a timeline<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Determine plans\/objectives<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Create a financial plan<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Determine your budget<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Entity Setup<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Now that you\u2019re ready to go, business plan in hand, it\u2019s time to establish the business entity.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The first step should be determining how you\u2019ll finance your business. Without capital, you won\u2019t be able to start the practice and your journey would end here. One of the most common methods for funding medical practices is a <a href=\"https:\/\/www.sba.gov\/blogs\/sba-loans-explained-101-small-business-owners\">small-business loan<\/a>, but this should be discussed with a financial advisor.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are many considerations when forming a business and unless you have significant experience it is best to speak with a small business attorney\/consultant. There are easy decisions to be made such as the name of the practice, but considerations such as organizational structure (LLC, S Corp, C Corp, etc.) can have major implications on the business long-term. These decisions should be advised by a professional.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><span data-olk-copy-source=\"MessageBody\">Other important steps when forming your business include hiring an accountant, setting up bank accounts, obtaining the appropriate tax identification numbers.<\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Find an attorney<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Find an accounting firm<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Obtain financing<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Decide on a practice name<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Determine organizational structure<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Obtain tax identification numbers (i.e. Federal, State, Local)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Setup Bank Accounts<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Obtain Sales Tax Certificate (varies by state)<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"display: none;\" data-sumome-listbuilder-embed-id=\"b9c33fcc9c811457556d16d9439c44e84cc63f34088c1800aaccce5ffaeb0cba\">DUMMYTEXT<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Office Setup &amp; Location<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">There\u2019s a lot to consider when setting up your physical location. How much space do you need? What location would be most accessible to your existing patients or ideal for finding new ones?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Once your preferred location has been identified, you\u2019ll need to negotiate lease terms, undergo the relevant inspections (fire, safety, etc.), furnish your office and even determine the hours of operation. Steps for setting up your office location include:<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Determine space requirements<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Site selection<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Negotiate\/Sign lease terms<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Certificate of Occupancy (i.e. Fire Inspection, Safety Inspection, etc.)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Determine office hours<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Purchase indoor\/outdoor signage<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Get office furniture\/decorations<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Administrative Setup<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Administrative setup is crucial in determining how you want to run your medical practice. This covers creating compensation models for yourself and employees, establishing <a href=\"https:\/\/www.carecloud.com\/continuum\/five-ways-to-make-your-workflow-smoother\/\">procedures\/workflows<\/a>, determining your fee schedules for all services you\u2019ll provide to patients and more. A lot of care and deliberation should take place in this stage, as processes are very difficult to change once they\u2019ve been adopted. Steps include:<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Create employment agreements<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Build a compensation model<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Prepare office policies<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Prepare procedures\/workflow manual<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Develop Fee Schedule<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Equipment and Technology<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">For your new medical practice to operate effectively, you will need best in class solutions that can adapt to your business needs. The primary systems a new medical practice will need for peak efficiency are <a href=\"https:\/\/www.carecloud.com\/ehr\/\">Electronic Health Records (EHR)<\/a>, <a href=\"https:\/\/www.carecloud.com\/practice-management\/\">Practice Management (PM)<\/a>, Medical Billing, <a href=\"https:\/\/www.carecloud.com\/breeze\/\">Patient Experience\/Intake<\/a>, Communications, Computers and specialty-specific medical equipment\/office supplies.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It is important to do a careful analysis of the various vendors of these systems as their strengths\/shortcomings will become your own. Select a system that is aligned with how large you anticipate your practice to be, not necessarily where it is today. Some providers are better for individual practices now, but struggle to deal with physician growth and increased staffing. What to consider:<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Determine equipment and technology needs specific to your practice<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Select a Practice Management Software (PM)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Select a Medical Billing Software<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Select an Electronic Health Record (EHR) Software<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Select a Patient Experience\/Intake Software (PXM)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Communications<\/span>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Purchase photocopier, transcription equipment, and fax machine<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Phone System<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Internet Services Provider<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Purchase computer and other office equipment<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Purchase initial medical equipment and office supplies<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Insurance<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">There is no understating the importance of insurance for a medical practice. Getting the appropriate types and the right amount of insurance coverage is more important in the medical field than in most others. Understanding which forms of insurance are mandatory and which are optional is critical to having the appropriate amount of protection in times of need. You will want to consult with a trusted insurance agent\/business advisor to determine what combination of insurance policies provides your practice with the proper coverage. Types of insurance your medical practice may need to include:<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Malpractice<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Health, Life and Disability<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Liability<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Workers Compensation<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Employee Practices Liability (EPL)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Disability Coverage<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Employee Fidelity Bond<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Business Interruption<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Umbrella Policy<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Medical Credentialing and Hospital Privileging<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">There are a variety of requirements you will need to meet in order to legally practice and to submit claims to payers\/collect on them.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The first steps include applying for a <a href=\"https:\/\/www.cms.gov\/Regulations-and-Guidance\/Administrative-Simplification\/NationalProvIdentStand\/\">National Provider Identifier (NPI) number<\/a> and obtaining state medical licenses. Once you are licensed and know that you want to accept insurance, you will need to go through the credentialing process. Credentialing is a process for verifying your qualifications inclusive of education, licensure and more.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Completing medical credentialing will allow you to accept insurance from government programs (Medicaid and Medicare) and private insurance providers (Blue Cross Blue Shield, Aetna, etc.). Determining which insurers you will work with and negotiating contracts with each of them is critical to you getting paid, should you choose to accept insurance.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Also, in order for physicians to treat patients in a hospital setting, they will need to go through a rigorous hospital privileging process. Medical Credentialing and Hospital Privileging steps include:<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Apply for an NPI Number<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Obtain state medical license<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Submit provider enrollment and credentialing applications<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Get memberships in associations (i.e. state, county, specialty-specific)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Apply for hospital privileges<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Compliance Training<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Compliance training for your staff is also vital to your practice\u2019s success. Staff compliance with OSHA, CLIA, HIPAA, Stark and more can save you thousands over the lifetime of your medical practice. Setup the systems needed early on to ensure that everyone has the training they need to keep your practice safe from non-compliance. Compliance Training includes:<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"><a href=\"https:\/\/www.osha.gov\/\">OSHA<\/a> compliance<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"><a href=\"https:\/\/www.cms.gov\/Regulations-and-Guidance\/Legislation\/CLIA\/index.html\">CLIA<\/a> compliance<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"><a href=\"https:\/\/www.hhs.gov\/hipaa\/for-professionals\/security\/laws-regulations\/index.html\">HIPAA <\/a>compliance<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Stark compliance<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Buy and Display Required Posters (i.e., OSHA, Equal Pay, etc.)<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Human Resources and Staffing<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Human resources and staffing are the foundation on which your practice will grow. Finding, hiring and retaining good talent can prove to be challenging but is critical to your practice\u2019s success. Formulating a hiring plan, setting up employee benefits, creating an employee handbook and implementing a payroll solution are all important steps in building a functioning HR process.<\/span><\/p>\n<p>According to CareCloud&#8217;s Practice Profitability Index Survey, staffing is the second-largest profitability challenge practices face. This came in only behind Billings\/Collections processes. Human Resources and Staffing steps include:<\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Determine all staffing positions needed<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Create job descriptions and salaries<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Determine employee benefits<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Implement payroll services<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Create HR policy and employee handbook<\/span><\/li>\n<li>Recruit, physicians, administrators, and nurses who can educate staff and understand the importance of value-based care<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Marketing<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Marketing is often forgotten when establishing a new medical practice, but what is a practice without patients. Empty. Whether you have an existing client base or are starting from scratch it is a good idea to have a solid marketing foundation for acquiring new customers and satisfying existing ones. This includes everything from branding to website design, networking and social media. Solidifying a strong marketing presence will pay dividends for years to come.<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Create Marketing Plan to acquire new customers<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Develop logo<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Create various marketing materials (i.e. letterhead, print collateral, etc.)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Build website (may be easier to outsource)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Join Local Business Organizations (i.e. Chamber of Commerce, etc.)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Network with colleagues in person and online<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Build Online Presence (i.e. Social Media, Review Sites, etc.)<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Additional Vendors<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Setting up accounts with additional vendors should be one of the easier parts of the process. Most of these are commoditized services that are quick to setup and easy to monitor. Additional vendors, you may need to setup include:<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Utilities<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Maintenance<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Office Supplies<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Janitorial Services<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Medical Waste<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Credit Card Processing<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">This article is not meant to be an exhaustive list of steps to take when starting a medical practice. Every case is unique and will require a variety of tasks that were not mentioned here. It is simply meant to help you reduce the time it takes to get on the path to success when starting out.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you would like a simplified version of this article, you can download the New Medical Practice Checklist for free.<\/span><br \/>\n<span style=\"display: none;\" data-sumome-listbuilder-embed-id=\"b9c33fcc9c811457556d16d9439c44e84cc63f34088c1800aaccce5ffaeb0cba\">DUMMYTEXT<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Starting a medical practice is an exciting experience. It provides the freedom to work for yourself and stay independent of larger health systems. Whether you are fresh out of residency or moving away from existing medical practice, there are many items to consider before, during and after launching a new medical practice. This article is [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":43113,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[389],"tags":[],"class_list":["post-20139","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-resources"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How to Start a Medical Practice? - Continuum - CareCloud<\/title>\n<meta name=\"description\" content=\"Learn how to start a medical practice. 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