10 Key Considerations For Starting Your Own Practice

For Nurse Practitioners (NPs) or Physician Assistants (PAs) embarking on the journey of starting their healthcare practices, there are several things to consider. By addressing these considerations with diligence and foresight, practitioners position themselves for a successful and sustainable venture in the realm of independent practice ownership. Here are some of the top considerations:

Table of Contents:

• Consider The State the Practice Will Be Located In
• Ensure That You Have Appropriate State Licensure
• Consider Your Medical Specialty and Service Lines Offered
• Know Your Scope of Practice – Is a Doctor’s Supervision Required?
• Consider a Business Plan
• Explore Financing Options
• Consider Whether the Practice Will Accept Insurance
• Talk With Your State and National Associations
• Consult With a Local Attorney
• Partner With a Practice Startup Consultant

1. Consider the State the Practice Will Be Located In

Not every state allows Nurse Practitioners and Physician Assistants to own a healthcare practice. It is important to think about whether the laws and regulations of the state you plan to operate your practice provide for medical practice ownership by mid-level providers. Additionally, the laws of the state the practice is in will dictate how an owner must handle many situations – everything from building permitting to requirements for shareholders of a practice.

2. Ensure That You Have Appropriate State Licensure

Visiting the website of your practice state’s governing board (usually the Board of Nursing for Nurse Practitioners and often the Board of Medicine for Physician Assistants, though some states may have created a separate board) is an important step to ensure that you have the proper qualifications. Requirements for licensure are not uniform across the states but generally consist of schooling and exams – including boards, certifications, and continuing education. However, checking in with your relevant Board is necessary to ensure that there are no additional requirements to obtain or maintain appropriate licensure. Directly contacting a Board(s) may also be helpful (discussed in consideration seven below).

3. Consider Your Medical Specialty and Service Lines to be Offered

As mentioned above, states (and Boards) can regulate the practice of medicine. Some states may have restrictions on the medical practice specialties that mid-level providers may provide in a practice setting owned by that provider. Therefore, it is important to look into whether or not the certification you hold allows for ownership within your state. This is also a good time to consider what service lines your potential business might offer. That is, what services do you plan to offer to prospective patients?

4. Know Your Scope of Practice – Is a Doctor’s Supervision Required?

When considering what services you will offer, it is essential to look at whether that service falls into your scope of practice. Scope of practice outlines the processes, actions, and procedures that a healthcare provider is allowed to render. Scope of practice is usually based on the provider’s academic education and certification, as well as their training, and clinical experience. For mid-level providers, the scope of practice generally enables the nurse practitioner or physician assistant to assess, diagnose, treat, and manage illness – though this does vary by state and type of provider. Additionally, both nurse practitioners and physician assistants may be required to have collaborative or supervisory agreements with a licensed physician, potentially both depending on the amount of practice hours. As much of practice ownership does, this is another element that is regulated by states and requirements will therefore vary – for some mid-level providers, there may even be no agreement necessary.

5. Consider a Business Plan

Before approaching a bank for a business loan, a provider should first create a business plan. While this does include obvious components such as anticipated revenue and repayment ability, other elements will be advantageous in securing funding. A nurse practitioner or physician assistant considering a loan for their start-up would also be smart to consider providing a SWOT analysis – strengths, weaknesses, opportunities, and threats – to the bank, based on the likely practice location. This analysis should also include an assessment of competition in the area where the practice would be opened. Some other considerations might include showing how much you plan to spend on a lease, equipment, and other startup costs, like waiting room furniture. Showing the bank these items will help to show how your business will succeed and is therefore ready for a loan.

6. Explore Financing Options

Obtaining financing for any startup, including healthcare practices owned by MDs and Dos, can be a challenging part of the process. This can be especially true for mid-level providers looking to open their own medical practice. Once the business plan is completed, the next step will be to reach out to banks and other financing entities to find a company that will provide the loan amount needed for the startup. This may require doing some research into companies that exist entirely to provide loans to healthcare entities. It is also important to recognize that this may be one of the more challenging aspects of beginning your practice as banks may not be used to providing lending to mid-level providers.

7. Consider Whether the Practice Will Accept Insurance

Another thing to consider before opening your startup is whether the practice will accept insurance. Medicare and Medicaid are government payers, but there are also a number of commercial payers that you may also become credentialed with. Insurance companies may have additional requirements for mid-level providers looking to get credentialed, making it necessary to contact a representative of the insurance company for their policies. The credentialing process can take months, so getting started with the process well before the anticipated open date for the clinic.

Operating your medical practice as a cash-based clinic is also an option. This would likely entail opting out of Medicare and having patients pay the practice directly. Other options could include a concierge-type practice with patients paying a flat fee in exchange for services for a specified period. Even a model such as this has different options, including a “hybrid” version. Insurance is a complex topic that will require diligence and attention to iron out prior to your practice opening.

8. Talk With Your State and National Associations

As you are figuring out the regulations of your state Board, an association located within your state may be able to provide some guidance on those regulations. A national association may help provide you with resources about starting up your own practice and what to expect as a provider and owner/operator.

9. Consult With a Local Attorney

After considering all of the factors above, an attorney will be able to help you create your entity and ensure compliance with any legislation that deals with ownership by a mid-level provider. Keep in mind that some of your prospective plans may not be possible because of legislation in your state. Because this area of law is developing for mid-level providers, it will be important to choose an experienced attorney who is familiar with medical practice startups.

10. Partner With a Practice Startup Consultant

DoctorsManagement can help you navigate the intricacies of opening a medical practice – including details like creating a business plan that can be given to a bank to secure funding, assisting in finding that funding, and providing assistance with credentialing, among many other tasks that will help get your business off the ground. Contact us to learn how we can help.