Monday, October 24, 2005

So you want to open your own private practice.......?

And you're positively not intimidated by today's ever-complex medical marketplace......then, READ ON.

What do you need to do?

Part I. The Technical Stuff.

These are things I wish someone had told me while I was a medical student or in residency training, or even early on in my career, because planning is everything. And planning eliminates lost time waiting for things to go through that should have been done long before. But how would you know? I certainly was not told that I needed to get a UPIN and apply to be a provider on the major insurance plans in my area by any of my residency mentors. Here's what you need to know to be ahead of the game.....

FIRST OF ALL: IT'S BEST TO CHOOSE TO DO YOUR RESIDENCY IN A LOCATION WHERE YOU PLAN TO SETTLE LATER ON. IT'S NOT A REQUIREMENT, BUT THIS WAY YOU CAN MAKE THE BEST USE OF YOUR TIME LEARNING ABOUT THE LOCAL MARKET, AND ESTABLISHING RELATIONSHIPS AND CONNECTIONS THAT WILL HELP YOU GET STARTED.

IN RESIDENCY: 1st YEAR

1) PASS USMLE STEP 3.
Do this as soon as you can, because much of the knowledge you will have acquired by the time you're 6 months into your internship. You need to have a passing score in order to apply for a state license.

2) OBTAIN YOUR STATE MEDICAL LICENSE. Every state has different rules for this, but for the most part all that is necessary is evidence of successful completion of medical school, USMLE Step 3, and an accredited internship program. Each state has a different licensing authority, so I recommend asking your residency program, or searching on the web using the phrase "[your state] medical license." There are two reasons for getting a license early on: a) it's good to get that out of the way, b) you can then moonlight for extra money.

IN RESIDENCY: 2nd Year

3) APPLY FOR A UPIN FROM THE CENTERS FOR MEDICARE AND MEDICAID SERVICES [CMS].
With the advent of the NPI [see my post: Another Layer of Bureaucracy], it seems that the old UPIN and PIN may be out the door. The CMS website is no picnic; navigation seems to have been organized with top-level security to prevent you from finding what you're looking for. To apply for a new UPIN, the form you need to fill out is CMS 855I. Also, you may want to fill out the Electronic Data Interchange (EDI) Agreement so you can send your claims electronically [electronic claims = FASTER PAYMENT], and the Medicare authorization for electronic funds transfer, if you would like your payments deposited directly into your bank account. If you are confused, call CMS at (866) 709-1905 and ask for help. As a new provider enrollee, it may take up to a YEAR to get your UPIN, SO START EARLY!

4) APPLY FOR A DEA REGISTRATION CERTIFICATE. Alas, a website that is easy to navigate! Click here to apply for your DEA Controlled Substances Registration Certificate.

5) APPLY FOR A PROVIDER # FROM THE MAJOR INSURERS IN YOUR AREA. This will vary by territory, so the best way to figure this out is to speak to practicing physicians and find out which ones are most common, which are the better payers, and which ones are trouble, so that you know what you're getting into. If the hospital you plan to associate yourself with has an IPA [see
How to make up for the difference?
], then find out which insurance plans offer enhanced fees through the IPA, and start there. Credentialing takes 6 months - 1 Year, so again, start early and brace for a tough few months with back-and-forth calls to the insurance plans' credentialing department. "No Dr. so-and-so, your application is still in the review process." For a more satirical look at this, see MMSPNexus Blog.

6) APPLY FOR HOSPITAL PRIVILEGES. Speak to the Department in the hospital you plan to affiliate yourself with, and explain to them your plans. Ask them if you can apply for hospital privileges while you are still in training. The process is long, and may take anywhere from 6 months to 1 year, so again, planning is everything. YOU NEED HOSPITAL PRIVILEGES TO BE CREDENTIALED WITH THE INSURERS. Yes, it may not make sense, but that's why it might be best to work for a local group before going off on your own, so that you have time to acquire your hospital privileges and be credentialed with the insurance plans. You can work under the shadow of the group while you set everything up. I would best recommend working for a hospital clinic or research project during this time, if need be, rather than a physician group, as the group may not take too lightly your forming your own practice and possibly taking away patients from them. If you think you need more experience after residency, be assured that you can acquire that on your own probably just as well as with a group or clinic. However, beware of RESTRICTIVE COVENANTS and lawsuits [It's the ugly side of medicine that we're mostly sheltered from during schooling and residency, but unfortunately, along with malpractice, it's out there. More on this later.]

IN RESIDENCY: 3rd/LAST YEAR

7) FORM A BUSINESS ENTITY. Yes, this is when you really start getting a flavor for what you're going to embark on. Once you do this, it's harder to turn back. If you're going into solo practice, I highly recommend a single-member Professional Limited Liability Corporation [PLLC]. Click here to read more about a PLLC. It is wise to have a business entity, such as a PLLC, in order to create protection for your assets in the future. Different states have different regulations, but in general, forming a PLLC has been made easier by new U.S. statutes. Your business entity can have any name you wish to assign it. Most doctors call themselves "John Smith, MD, PLLC," etc... Your business entity can also have a ["doing business as"] public name in the future, for example "Longevity Health Associates, PLLC". This may be a wise decision for marketing purposes. Each state has its own Department that handles the Articles of Organization for a new corporation. Look up the Department of State website for your particular state and inquire there. If you have any questions on which entity is the best for you to choose, consult with your accountant and attorney. If you don't have ones, now is a good time to start searching, because they are essential once you enter into the business world. [This is a good time in life to realize (if you haven't already) that it is important to network, meet people in different fields, and make friends with them, so they can be resources to you in the future, as you can be for them.]

8) APPLY FOR AN EMPLOYER IDENTIFICATION NUMBER (EIN) FROM THE IRS. An EIN is a federal tax identification number for your business. Generally, you will need this. Your accountant will use this number when filing taxes. You will also need to give this number to CMS as well as every insurance company you are a member of, for payment purposes. Click here to be taken to the online IRS application.

THAT'S IT FOR THE TECHNICAL STUFF. IN PART II, I WILL GO BACK AND LOOK AT HOW MUCH THESE STEPS ARE GOING TO COST YOU.

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