You are ready to open your own medical practice. Unless you opt to work with an established group practice, there are a number of tasks that you’ll need to complete before you’re ready to open for business, such as developing a viable business plan, choosing a form of ownership, and getting a start-up loan.
Regardless of which form of ownership you ultimately decide upon, there are some things that must be done as soon as possible before you can start a new medical practice in Georgia. Like any other successful business – and you are a business, as well as a health care provider – you’ll need a plan, as well as the help of an attorney experienced in setting up medical practices. In addition (but not in place of) your legal adviser, if you are building a practice from the ground up rather than choosing an existing turnkey location you may want to consider hiring a certified professional medical practice consultant.
Develop a Business Plan
According to the Williams OInonen LLC, Georgia law firm’s website, your business plan should include the following details, particularly if you intend to go solo:
- Identify a (prospective) community’s needs
- Your anticipated payers
- Most-anticipated commonly-used codes with their corresponding reimbursements
- Projected growth
- Marketing and promotional strategies
- Getting referrals
- Future business development plans
The AMA also has guides available on their website to help both new and established physicians start or buy a practice.
Select a Business Entity
Once you have a workable plan in place, your next step would be to choose which business entity as well as the decision whether to incorporate. Your attorney will help you decide between a C-Corporation (for example, as well as S-Corp. or Professional Corporation) and a Limited Liability Company. You’ll need to take the following factors into consideration:
- The amount of corporate maintenance you wish to handle
- The speed at which you want to grow the practice
- The number of physicians that will (initially) be involved in the practice
- General liability
The last two, taxes and liability, are the most important considerations, with most practices choosing to incorporate as an S corporation or Limited Liability Company (LLC) primarily for tax advantages. Sole proprietorship and general partnership are available, of course, but confer less liability protection and tax benefits.
Related Article: Step by Step Approach to Market Your New Medical Practice
Being an independent practitioner is more of a planning and financial challenge at the outset, but doing so gives a greater degree of autonomy and sense of agency than being part of a larger group or hospital system.
Taking Care of Business
- Get your taxpayer ID number from the IRS as soon as possible.
- Once you have an ID, you will need to open business bank account in the practice’s name for keeping your business’ finances separate from personal accounts.
- Insurance is a requisite – be sure to work with an experienced local insurance agent or broker for general liability, malpractice, disability, health, retirement planning as well as property/ casualty.
- You’ll need to plan for physician staff salaries and benefits as well as independent contractors and administrative personnel. Doing some research can tell you what average salaries are in your area for those professionals.
- Electronic Health Record (EHR) and Practice Management (PM) are essential for digitizing and streamlining records and communications between you and other practitioners as well as payers. Additionally, if you wish to qualify for federal incentive payments, you’ll certainly need the latest in EHR software and technology.
Following the Money
You will most likely need a loan at the outset to equip and furnish your office, install computer systems, meet initial payroll and more. Your biggest job will now be to convince a bank to loan you the money, especially if you are already carrying debt from your education.
How much should you borrow? David Zettner of Zettner Healthcare Management Consultants believes that a $100,000 line of credit should cover most initial necessary equipment and staffing costs, such as payroll, until the practice establishes a steady revenue stream.
Max Reiboldt, author and CEO of the Coker Group, emphasizes the need for a solid business plan, or “pro forma” as a tool for helping make your case to the bank. This should show projected “real-world” cash-flow needs, revenue and debt projections and the sources of your income. Incorporating statistics from comparable practices can be a good way to support your hypothetical revenue and expense projections.
If a medical/ dental division of a bank exists, this is where to submit your loan application and pro forma. Be sure to shop around for the best terms by submitting your information to several institutions to get several offers for comparison of interest rates, amortization schedules, and so on.
When writing the pro forma, be conservative in your approach to furnishings and related expenses. You can always upgrade later once the practice starts generating steady income. While waiting for responses, use this time to sign a lease, purchase insurance, decide which equipment to obtain as well as complete credentialing with payers and hire the rest of your healthcare team.
Choose Experienced Revenue Cycle Management Partners
One excellent way to save time and money on staffing as well as ensure that your practice’s billing and reimbursement gets off to a good start is to partner with an experienced medical billing service, such as M-Scribe. Since 2002 we have worked with practices of different sizes and specialties, providing peace of mind while improving compliance and revenues through our coding, billing, credentialing, review of payer contracts and other revenue-cycle management related services. Our medical billing experts and certified coders will be happy to show you how we can streamline your billing and other practice-management areas while ensuring full compliance with the latest payer and government regulations. Contact us at 770-666-0470 or by email for a free, confidential analysis and learn more about how we can help get your new practice off to the best possible start.