Setting up a Solo Practice: Month-by-Month Checklist
Start up scenarios. The most common start-up scenario is for those who are leaving a faculty position or practice group to set up a solo practice. Frequently, the incentive to fly solo often comes from a hospital looking to establish or expand an EP program and is therefore recruiting EPs to its staff. This is the best-case scenario, since it usually indicates a solid patient base and often comes with significant start-up help or guarantees.
Hint! The process of setting up a private practice will take a minimum of 6 months, but more typically 9-12 months, especially if you are working. Delegate as much as possible to an accountant and a medical administrative office, unless you have plenty of time on your hands, are very well organized and enjoy paperwork. Ask colleagues in town for referrals to these types of services.
Month-by-Month Checklist
12 months before opening
Decide on a practice location. Roughly 80% of the revenues in a typical EP practice are generated in the hospital. The most important thing is to find out which hospitals have a need for an EP and which hospitals to which you plan to affiliate. Hospitals will often offer start-up help in the form of salary guarantees, exclusive contracts and business loans.
Things to consider
- Make sure the hospital where you plan to practice has what you need to perform procedures:
-- EP lab – preferably a dedicated or a combined lab with dedicated EP time and dedicated staff.
-- Fluoroscopy equipment in the implant room that is adequate for biventricular implants.
-- Mapping equipment. - Ask for medical directorship and salary support.
- Remember the best time to negotiate is before you join. In most hospitals getting larger capital expenses approved takes one year.
- When choosing a hospital, meet with as many cardiologists as possible to assess the referral potential.
- Consider what kind of competition you will be facing. You will be competing not only against EPs but also implanting cardiologists and surgeons. Be aware of larger groups who may be hiring their own EP.
- Select a practice management consultant. Look for someone who is familiar in the area you are considering and possibly has other clients from the institution. Many consulting firms will also offer accounting services and help you develop a business plan and start-up budget.
- Select an attorney.
- Decide on a business structure.
- Select an accountant.
- Develop a start-up budget. The specifics of every start-up situation are unique, but the need to develop a detailed budget and create a three-year forecast of collections and cash flow is a critical constant. See a sample start-up lab budget. The collections in the sample are based on average 2007 Medicare payments for the most commonly performed EP procedures, and assume a growth rate of 30% in the second year and 20% in the third year. Keep in mind that collections will ramp up slowly during the first 6 months. Change the count of anticipated procedures and test different scenarios in this budget and projections template for a start-up lab.
- Choose a practice name. Check with local and state authorities to be sure the name you choose if not already in use by another business, which can be a costly mistake.
9 months before opening
- Arrange for start-up financing. Investigate whether the hospital offers start-up help.
- Find office space. Given that you will spend most of your time in the hospital, having office space in the professional building attached to it will save you a lot of time. It is also usually more convenient for patients who may be seeing their cardiologist or internist on the same day.
- Negotiate a lease.
- Reserve an office telephone number. You will need an actual address and phone number for all your applications, insurance contracts and provider numbers. Changing any of this information is very time consuming, so it is best to have the actual business address and a confirmed office number early on in the process.
- If relocating, apply for a state medical license; if remaining in same state, inform licensing board of new address.
- Apply for business and county licenses.
- Apply for hospital staff privileges.
- Apply for DEA registration.
- Apply for Employer Identification Number (EIN).
- Obtain Medicare provider number and Universal Provider Identification Number (UPIN).
- Obtain Medicaid provider number.
- Begin credentialing with insurance plans.
- Seriously consider hiring a medical administrative office for all the paperwork involved in completing applications. You can provide them with your information once and they will help you fill out forms and keep track of all the documentation. You will still have to sign multiple documents and answer the same questions over and over, but it is a lot less painful than doing it yourself.
6 months before opening
- Find a good insurance agent
- Assess adequacy of malpractice coverage.
- Consider applying for business owners and business continuation insurance.
- Purchase an umbrella policy.
- Establish an employee benefits package. Usually medical insurance at a minimum. Setting up a retirement plan is usually not necessary in the start-up phase, and it is expensive.
- Obtain disability and workers' compensation coverage.
5 months before opening
- Consider hiring an architect or interior designer if you need to remodel, depending on the amount of structural work needed.
- Plan your office space to ensure comfort and ease of workflow.
- Plan for 2-3 exam rooms, including one for your device clinic.
- Make sure you have enough space for all the programmers.
- Ask the major device companies to provide you with the latest programmer and printer; often they will also provide a cart.
- Keep each programmer on a separate cart that you can easily wheel from room to room, in case you need to interrogate a device during an office visit.
- Seek bids for remodeling, if needed, and hire a contractor.
- Determine your needs for furnishings, clinical equipment, and supplies. As an EP you do not need much to get started:
- Basic exam table
- Instruments to take vital signs.
- ECG machine. Consider software-based models that will integrate with your EHR.
- Consider investing in a transtelephonic pacemaker follow-up system, and your own Holter and event recorder.
4 months before opening
- Determine your needs for information technology. Strongly consider investing in both electronic practice management and electronic medical records (EMR). The time to do it is when you start a practice. It's more painful to convert to one after you've been using paper records. A combination practice management/EMR system isn't cheap. When you add up software, hardware, implementation, training, maintenance, and updates, the cost can easily be $60,000-$90,000 over five years for a soloist. For more information, see Electronic Health Records: Transforming Your Medical Practice.
Hint! By leasing everything, you can get your fingers on a mouse for a monthly payment of $500-$800. Web-based software from a so-called application service provider might nudge down the cost, since you wouldn't need to buy a server.
- Choose IT vendors and negotiate a deal.
- Make a plan for IT installation and training. If you are running your own EMR/HER you will need to hire an IT consultant/service group.
Hint! When choosing a system, go with one of the top 5-10 major players. They are less likely to go out of business and seize support, and you are more likely to find specialized templates for EPs. Also, most major EHR systems are working to directly integrate device information or remote follow-up information.
3 months before opening
- Hire an office manager. At this point it is almost a full-time job to get things under control and take care of the remaining details. The office manager can help you:
- Develop job descriptions.
- Place newspaper advertisements.
- Review resumes.
- Interview potential employees.
- Create an office procedure manual.
- Create a personnel policy manual.
- Determine how many employees you'll need.
-- At least one receptionist, especially if you plan to “hit the ground running.”
-- Strongly consider hiring a nurse for device and wound checks, and to help you with all patient concerns and phone calls.
Hint! As an EP you are, or should be, busy doing procedures and seeing new patients, with as few interruptions as possible. Structure your staff to ensure that you can stay focused on what matters most.
- Determine staff salaries and benefits. You generally get what you pay for. Be as generous as you can. A professional, reliable office staff is priceless.
2 months before opening
- Install a phone system for your new office.
- Hire answering and transcription services.
- Contract with laundry, janitorial, and security companies.
- Set up contracts with major payers.
- Establish a fee schedule, which is generally based on a percentage of Medicare fees.
- Put billing and coding procedures in place. Given the very limited number of billing codes used in an EP practice, billing is quite specific and relatively straightforward.
Hint! Order your Coding Guide for Heart Rhythm Procedures and Services — a must-have tool for any EP Lab or any physician performing heart rhythm procedures and services.
- Hire your own part time billing person, or hire an office manager with a billing background.
- Set up a system to handle all collections.
- Hire a company to do your payroll.
Hint! It is not necessary to outsource billing at this stage. With a good EPM/EMR it is relatively easy to keep up with billing and collections.
1 month before opening
- Market your practice.
-- Place announcements in community newspapers and other local publications. Often Hospitals will be eager to market the new or expanded EP service they can offer and will do it for you.
-- Ask the hospital marketing department to run an article on you, and whatever new procedure you are bringing to the hospital, in the institution’s newsletter and website.
-- Mail announcements to area physicians.
-- Consider enlisting the help of major EP vendors to set up referral dinners and other educational seminars for potential referral sources (mostly cardiologists)
-- Go to every staff and departmental meeting to get to know your referring physicians.
-- Select and order magazines and other publications for reception room.
Hint! Check out HRS’s Patient & Public Information Center or download a PDF order form to purchase printed patient education materials.
- Assemble patient registration packet.
- Begin accepting appointments.
Other Resources
Rx for Business Success: Starting a Medical Practice. Tom Ealey. Medical Group Management Association, 2007.
Medical Group Management Association. MGMA serves 21,500 members who lead and manage more than 13,500 organizations in which almost 270,000 physicians practice. MGMA provides consulting services, training and publications in financial management, HR, operations, IT, planning and marketing, risk management and governance. They also offer practice solutions in the areas of billing/collections and revenue cycles, coding, electronic health records (HER), integrated delivery systems, physician compensation and Relative Value Units (RVU).
