How to start a Solo Private Practice

Hi readers, first off, an apology for the radio silence from my side. I have a new baby keeping me busy. No, not the human kind. Two of those are plenty. This one’s been a long-held aspiration- my own solo private practice. This post is a basic step-by-step on how to start a solo private practice.

My “Why”

Why would anyone in their right minds open their own solo practice in this day and age? I often ask myself this. After all, with the burden of ever-increasing regulation and busywork and declining reimbursements, it doesn’t seem like the smartest thing to do. But we forget, some of the most precious things are intangible.

So it was for me. My “why” was to work in medicine on my own terms. And it is the same for many other physicians who cherish their autonomy.

I’ve always worked part-time since completing training to focus on my family. And I’ve found part-time work discounts compensation disproportionately. For example, I might work 50% but get paid 30% that of a full-time worker. Interestingly, this is a point even Michelle Obama says of her experience, in her book, Becoming.

I had two choices- go full-time or go out on my own. I went for choice #2.

Here’s a rundown of the process as I went through.

The Vision

Insurance based or not

The single most important decision you will make in this process is whether you will accept insurance payments for patient care or not.

If you will not accept insurance payments, you will be paid by patients directly for their medical care. This may be fee-for-service, ie., getting paid for every visit and/or procedure. Or you may charge a set monthly or annual fee for associated medical care, including visits, labs and medications- the Direct Primary Care model- with additional charges for care outside of these routine ones.

I decided to go the insurance route and hence the process detailed below is for a practice which will charge insurance for patient care.

Step 1: Setting Up the Company

Manage your own CAQH Profile

I’ve always managed my own CAQH profile since I’ve never been an employed doc, always working as an independent contractor. However, if you’re currently employed, then your employer probably takes care of it.

Head over to HR (or give them a call) and ask for the login and password for your profile. Get familiar with what’s in there. It’s basically a detailed bio of your professional life. If your employer is okay with letting you handle your CAQH profile, that’s great. But they may not- knowing that it is really important to stay on top of it.

Also, just the fact that you’re snooping around your CAQH profile may alert your employer that you may be looking to leave. Just keep this in mind.

Whoever manages your profile has to attest to it being up to date and accurate every 90 days. It’s not a good idea to let it expire. Most insurance companies pull their information on you from your CAQH profile.

Name your Practice

You need a name for your practice. Unlike the name of a book, which can wait, this needs to be done upfront since the next few steps need this information.

The name of the practice often reflects your vision or the geographic location or your specialty. Make it fun. Let it reflect your personality.

The name should also be unique such that you don’t share the name with another company in your state.

I did not want a stodgy old name for my nephrology practice. I was looking for a synonym for excellent.. or premier… so I settled on Ace Kidney. And totally did not consider the relevance of ace inhibitors in my field. Duh. Later, one referring physician kidded that just like ace inhibitors, I’m good for the kidneys. Aww, those are kind words.

Buy your domain name

Once you have your business name, it is a good idea to buy your domain address so it doesn’t become unavailable later. The domain name refers to the www.yourcompany.com for your website.

Whether you build your own website or have someone else do it for you, you should always own your domain and site.

Set up an LLC

Your company needs to be incorporated in the form of an LLC: a limited liability corporation. This is a state-based legal entity to protect your personal assets from any litigation involving the company but limiting its liability only to the assets of the company itself.

Please note, this refers only to general liability, not medical liability. Medical malpractice liability is always personal- it cannot be protected by incorporating.

An LLC has no tax implications. As a single member LLC, you are considered a “disregarded entity” for tax purposes- just like a sole proprietor. But unlike a sole proprietor, you have some liability protection.

To figure out when you should set up an S-corp, refer to this post.

Get an EIN

Next, your LLC needs a Tax ID number, also known as an EIN. It takes barely 5 minutes to do online. But, you need to do it during IRS work hours. Here’s a step by step on how to get an EIN.

Google Voice phone Number

You need an official business phone number. You will need it for the following steps. A Google voice number works great and it’s free. You can also use it to send and receive texts in a HIPAA-compliant manner if you pay for Google Workspace and sign a Business Associate Agreement with them.

For now, a free Google Voice number is enough.

Doximity Fax Number

This one’s another very useful and easy to use tool at the perfect price. Doximity is a form of e-fax, no machine needed. It lets you use your cellphone camera to scan the documents in order to fax them.

When your volume grows, or you’re ready to open your doors, you can move over to a paid e-fax provider. For me, this is proving just fine.

Email address

I started with a personal gmail account, clinicname@gmail.com- and this served the purpose in all those places that ask for an email address, including insurance companies.

Once you have your domain name, you can have an email related to it, for example, info@yourclinic.com.

You may need HIPAA compliant email service down the line, when protected personal health information of patients comes into play- but it’s still a little way off.

Business Address

You will need a business address for a bunch of purposes. It would be ideal if you already know your clinic address. But most of us do not, at this early stage.

So, a mailbox address works beautifully. Not a USPS P.O. Box- those will not be accepted by insurance companies, including Medicare. UPS has mailbox addresses that are physical street addresses. Regus, a shared workspace company also has mailbox services, that do the same thing, but at a higher price. In my area, the UPS mailbox is $20/month. Not as good as free, but darn close.

There are other options too. If you have a friend who is willing to let you use their clinic address until you get set up, that would work.

Business Bank Account

Now that you have a legitimate business with a name, address, phone and fax number and an email address, you open up a business bank account at the institution of your choice. I went with Chase and opened their lowest tier of checking and savings account and put in $1500 into it from my personal funds to avoid the monthly maintenance fee.

Organizational or Group NPI

You have an Individual NPI (National Provider Identifier) assigned to you already. However, you need to also get n Organizational or group NPI for your practice.

You register for it similarly to your individual NPI, on CMS’s NPPES site.

Now you’re ready to credential and Contract with the insurance companies.

Step 2: Insurance Credentialing and Contracting

This is the rate-limiting step in starting up an insurance-based private practice. The process of getting into the network of an insurance company, so that you may get paid by them for seeing a patient who is their member, is twofold.

First, they verify all your medical credentials and make sure everything is in good standing. This includes but is not limited to your medical licensure, malpractice coverage, DEA number, etc. This part is called Credentialing.

Once they’ve credentialed you, they send you the contract. It includes the “fee schedule”- how much they will pay you for each service rendered. There are a number of fee schedules for each payor- so you may get paid differently from the doc down the street for the exact same service, based on how much negotiating power you have. United Healthcare, for instance, has 27 different fee schedules. As a new solo doc, you will likely be closer to the bottom of the totem pole.

You can choose to do the credentialing and contracting on your own or farm it out. I did it on my own. It is not hard at all, just tedious. So figure out how much your time is worth and decide accordingly.

The process takes between 90-120 days on paper and a little bit more in real life. So, about 4-6 months, give or take.

In this duration:

Step 3: Prepare to Open

Give notice to your Employer

Depending on how much notice your employer requires, figure out when is appropriate. Watch out for any pesky restrictive covenants (non-compete clauses) your contract with your employer may have. Run it by a lawyer to be sure.

Look for clinic space

This is a big one. Depending on your area, this may be be expensive, hard to find or both. You may want to scout the area informally long before this stage, actually.

The choices available are: renting/leasing office space vs buying it. In the beginning, when your volume is low or if you want to practice part-time only, another option is to sublease space from another clinic or other office (chiropractor/therapist/other professional).

I went for a different option. I am leasing space from a shared work-space company called Regus, at an hourly rate. Since my clinic is not full at this time, it gives me some much-needed cost savings.

Get Malpractice Insurance

If you’ve been an employed physician, your employer probably took care of this for you. They added you to their group malpractice insurance policy. Now you have get it for yourself. It’s not hard. You figure out which kind of policy will be best for you. Claims-made is the vanilla option. It has its downsides but is far more cost-effective than occurrence policies and is therefore far more commonly used. I wrote a 3-part series on How on Buy Malpractice Insurance for the White Coat Investor.

Once you’ve done your research, find an independent broker to get you some some quotes and seal the deal. Try to find an independent broker, rather than an agent associated with a specific insurer (captive agent), so you can get options to choose from.

Choose an EMR

Another big decision. Especially because it can be a pain in the rear end to change from one to another if things do not work out with your first choice. No EMR is great, or even good. You just have to find one that sucks less than another.

Budget is a major consideration too. From free ones, like Charm, to big names like E-Clinical works and Epic- the choices are plenty. It also depends on your specialty.

I chose to go with Office Ally. It initially started as a clearinghouse and billing system- and still offers those services for free. Its EHR costs $30 a month and in my view, works perfectly for my needs.

Get a logo

There are a myriad options, depending on your budget. Some folks do it on their own- with Canva or other graphic design tools. But I found a bunch of inexpensive and good online freelance options- such as at Fiverr.

I used a designer at Fiverr for my logo for a grand total of $27. I love the logo and have received great feedback on it from others.

Build your online presence

Time to get that website going. Again, it’s time vs money. If you have the time, it’s not all that complicated to do it yourself. But if your time is better served by seeing patients or doing other things, outsource it. It will take upto few thousand dollars to get it done and that number varies widely.

Make sure that you own your website, not the website designer- otherwise you will be stuck with them for maintenance and SEO, even if you want to move away.

Business cards

This is important- it will be a cornerstone of your marketing strategy. But you don’t have to sweat getting it right the very first time.

Business cards are inexpensive. Don’t like it the first time around, tweak it for next time. Order in smaller quantities in the beginning.

This is one of the last steps because you will need your logo, practice address and website set up before you can get cards printed.

Build up your Network

Let the world know you’re here and ready to work! This will differ by specialty. For subspecialists whose patients come from primary care docs, you want to meet them and let them that you are new to the area and happy to take care of their patients.

Give them your business cards and your cell phone number too. I have a card for each doc with my cell number at the back, that says “I love texting”.

If you are primary care, your marketing will be different. You will find community resources to spread the word about yourself.

Print Prescription Pads

Most of the time, you will use online e-prescription but you still need some paper prescriptions for some occasions. Mediscript is one good option. It is inexpensive, they ensure your information is correct before printing them out. And the turnover is pretty quick.

Partner with Labs and Imaging Centers

Reach out to labs and imaging centers in your area. They have representatives to help you get on board with paper requisitions and EMR integration. EMR integration is vital: it makes it easy to order labs and imaging straight from your EMR.

Create Patient Registration Forms

You will need new patient registration forms. This includes demographic information, insurance information, any medical history and medication list you want to include, HIPAA form and your financial policies.

You could have these forms on paper- have patients fill them out and then scan them into your EMR. Or your EMR may have a patient portal where you could upload the forms. Mine does that. Office Ally comes with a patient portal where patients can fill out my registration forms online and it goes into their charts seamlessly.

Payment Processing Method

Last but not least, you need to get paid for what you do. So, you will need a credit card processing system. Evaluate them for their costs. You will pay about 2-3% of each transaction with or without a monthly fee. Many EMRs have their system- which makes it easier since it integrates directly with the EMR. Expect to pay more for it, though.

Square and Stripe are two commonly used ones. I use Square. I signed up for it online and they sent me a free card reader that connects to my phone. Easy peasy.

This is a bird’s view of the process. One can write an entire post or two on each of these steps, to get into the weeds. For today’s post, this is it. Note that I did not talk about hiring employees. That is because I set up a micro-practice, ie, one without employees.

I hope this helps, if you’re thinking about private practice and wondering where to start.