Tools for starting a private practice

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Doctor Bagel

Doctor Bagel

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To follow up on Fonzie's threads and some others in this forum, I'm wondering if it would be useful to put together resources for starting a private practice. With that aim, I was thinking about compiling threads on this topic and having those of us interested in this topic share resources/tools/tips as they come along.
 
 
nitemagi said:
Ask a question, get an answer.
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Question I would like an answer to that's admittedly market specific -- tips for finding a location? Anything to be especially wary of? Did you find something through networking with other providers or through craigslist?

One thing it seems like I've gleaned from more research, though, is that you can start the first part of the process (getting an EIN, getting on insurance panels) before having a practice location. I had been told otherwise. True/not true?
 
Doctor Bagel said:
Question I would like an answer to that's admittedly market specific -- tips for finding a location? Anything to be especially wary of? Did you find something through networking with other providers or through craigslist?

One thing it seems like I've gleaned from more research, though, is that you can start the first part of the process (getting an EIN, getting on insurance panels) before having a practice location. I had been told otherwise. True/not true?
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I can only speak to my location, namely california. Rather than the psychiatry or psychology sites, the MFT site has the most listings (CAMFT).
Be wary of who you're subleasing from, soundproofing, a/c, and if you're getting a furnished office make sure it fits your style. Also things like water, wifi, etc.

For the getting started, yes, though you may need to change what's filed once you have an established location. You may want to consider having a business address (home office or PO box) for mail to start. Just be clear when others are asking for address if they want to know where you're seeing patients or just your mailing address.

I initially listed my business address as my home, since I had a home office and only saw patients at moonlighting locations (private hospitals, jail, county facilities).
 
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How long between opening the doors and having a full panel of patients 40 hrs a week with private insurance? How long to payoff startup costs? Do you have an easy way to see what insurance pays you for specific visit codes so you can assess whether to drop or keep the insurance contract? Do you accept or opt-out of medicare? If I rent an extremely cheap and basic office do you think patients with private insurance will care (I'm talking 2 chairs in a room, my laptop, and a paper rx pad)?
 
heyjack70 said:
How long between opening the doors and having a full panel of patients 40 hrs a week with private insurance? How long to payoff startup costs? Do you have an easy way to see what insurance pays you for specific visit codes so you can assess whether to drop or keep the insurance contract? Do you accept or opt-out of medicare? If I rent an extremely cheap and basic office do you think patients with private insurance will care (I'm talking 2 chairs in a room, my laptop, and a paper rx pad)?
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I'm private pay only. I took health insurance for a little bit and it was a nightmare (also took me two years to get off the panel).

Startup costs are fairly low, but I wouldn't skimp on them. A couch and a reasonable chair and desk won't run you that much in the long run. It's a minimal investment, and doesn't need to be replaced. I think patients DO care. That doesn't mean it'll be a deal breaker if you have a crappy office, but it's a factor in their first impression. Somewhat it'll depend on what you're offering, and on the market.

If you're a jerk AND you have a crappy office AND you only do med management the same as everyone else in town, they probably won't stick around. "Dress for the job you want, not the job you have." Your better alternative, if available, may be to sub-lease an already furnished office.
 
Doctor Bagel said:
Question I would like an answer to that's admittedly market specific -- tips for finding a location? Anything to be especially wary of? Did you find something through networking with other providers or through craigslist?

One thing it seems like I've gleaned from more research, though, is that you can start the first part of the process (getting an EIN, getting on insurance panels) before having a practice location. I had been told otherwise. True/not true?
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When I applied for an EIN, it asked for the business address. Insurance companies want to know where you are physically seeing patients. You will also likely need an NPI type 2 number which is based on the physical location of seeing patients. The NPI type 2 number is likely what you will use to file with insurance companies (if you take insurance).
 
Doctor Bagel said:
Other question -- anybody use NOLO to start an LLC? It looks simple -- $100 for their online package.
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Some states do not allow physicians to practice medicine under a LLC; they require a PLLC. You need to look into local laws before choosing a business entity.
 
Doctor Bagel said:
Other question -- anybody use NOLO to start an LLC? It looks simple -- $100 for their online package.
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Check your state laws, you may not qualify to be a LLC as a solo practitioner. It could be necessary that you create a corporation with another person to form a LLC, and that if you're by yourself, you'd be a PC S-Corp.
 
From what I can ascertain in my admittedly limited search, it seems like my state doesn't clearly differentiate PLLCs and LLCs, and I don't think there's any special requirements with the medical board or anything like that. If there were, I'd guess going the solo proprietorship route would make the most sense in someone in my situation (small private practice, no employees).

The address thing remains a bit of a catch because getting an address requires some upfront money, but you won't really have money coming in for a few months.

I'm also curious about the cash only versus insurance thing. In my market, it seems like everyone accepts insurance, so being cash only, especially as a new provider, seems really presumptuous. However, I love the idea of not dealing with insurance, and I've got other more stable sources of income, so I can eat while I'm getting things going.
 
Doctor Bagel said:
From what I can ascertain in my admittedly limited search, it seems like my state doesn't clearly differentiate PLLCs and LLCs, and I don't think there's any special requirements with the medical board or anything like that. If there were, I'd guess going the solo proprietorship route would make the most sense in someone in my situation (small private practice, no employees).

The address thing remains a bit of a catch because getting an address requires some upfront money, but you won't really have money coming in for a few months.

I'm also curious about the cash only versus insurance thing. In my market, it seems like everyone accepts insurance, so being cash only, especially as a new provider, seems really presumptuous. However, I love the idea of not dealing with insurance, and I've got other more stable sources of income, so I can eat while I'm getting things going.
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1. Relax about the business structure. You can go sole proprietor and test the waters. If you bail on pp it's a pain to dissolve an LLC or corporation.

2. Look into Virtual offices. You can get an address in a building and rent offices by the hour for really cheap. Once you start getting patients you can invest in an office or share with someone.

3. Cash vs Insurance. If you don't want to deal with insurance then don't. So what if other psychiatrists are taking insurance. Send them a business card and have them send patients your way.
 
1. Billing software recommendations ? (I want to do it myself at least initially to avoid 5-6% overhead)
2. Is it easy to change address with insurance providers ?(say from a subleased office to a direct leased one.)
 
Get a billing company to do it for you that takes 3-4% of your collections, they'll work hard to get you the max billing possible. Or else go cash.
 
Shikima said:
Get a billing company to do it for you that takes 3-4% of your collections, they'll work hard to get you the max billing possible. Or else go cash.
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I went cash. I couldn't find a company willing to do it for less than 6% of all collections, including cash co-pays. Forget that.
 
TexasPhysician said:
I went cash. I couldn't find a company willing to do it for less than 6% of all collections, including cash co-pays. Forget that.
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I knew of one company that was doing it for that rate. I'm not sure if they still are at that same rate or if they increased. I know they'll work with physicians who are out of state too.
 
Just as a data point, I use Availity for BCBS (the only insurance I take). It's a very simple system to learn, and I usually get paid within 48 hours.
 
For those of you with smaller solo practices, what to do you do for after hours coverage? I'm not sure I'm willing to be 100% available even with some built in vacations where I arrange other coverage. Are you all 100% available other than vacation? I live in a beautiful part of the country and being outside of cell phone coverage areas is a common part of my weekends. I've got to admit I'm starting to enjoy the aspects of my other jobs where I'm never the first line of contact.

I know with screening I'm assuming my patients aren't going to be contacting me all that much after hours -- it's more the technically having to be available even if the service isn't utilized thing.
 
Doctor Bagel said:
For those of you with smaller solo practices, what to do you do for after hours coverage? I'm not sure I'm willing to be 100% available even with some built in vacations where I arrange other coverage. Are you all 100% available other than vacation? I live in a beautiful part of the country and being outside of cell phone coverage areas is a common part of my weekends. I've got to admit I'm starting to enjoy the aspects of my other jobs where I'm never the first line of contact.

I know with screening I'm assuming my patients aren't going to be contacting me all that much after hours -- it's more the technically having to be available even if the service isn't utilized thing.
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psychcoverage.com
 
mgdsh said:
psychcoverage.com
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Fascinating. Do you use them? It looks like all the testimonials are from California, which makes me wonder if they're limited to there. Providing medication assistance pretty much means you have to be licensed in that state, right? I'm also wondering if it would be prohibitively expensive for a small solo practice.
 
I wouldn't count on any kind of a vacation for the first 2 years. The reason being is that you're building your practice but also developing the professional contacts in the community. I would recommend developing a relationship with a couple of other psychiatrists who are near you to learn about the area and neuances but also you can cover for each other.
 
Doctor Bagel said:
For those of you with smaller solo practices, what to do you do for after hours coverage? I'm not sure I'm willing to be 100% available even with some built in vacations where I arrange other coverage. Are you all 100% available other than vacation? I live in a beautiful part of the country and being outside of cell phone coverage areas is a common part of my weekends. I've got to admit I'm starting to enjoy the aspects of my other jobs where I'm never the first line of contact.

I know with screening I'm assuming my patients aren't going to be contacting me all that much after hours -- it's more the technically having to be available even if the service isn't utilized thing.
Click to expand...

You don't have to be available after hours I recall as a resident we left message on our answering machines to call 911 or come to ER in case of emergency.
All pharmacists are authorized to give 1-2 day/emergency refill for a medication.

The on call resident was never called by any of the established patients.

Vacation - yes makes sense to have coverage unless you don't mind travelling with your phone or checking messages once a day.
 
Shikima said:
I wouldn't count on any kind of a vacation for the first 2 years. The reason being is that you're building your practice but also developing the professional contacts in the community. I would recommend developing a relationship with a couple of other psychiatrists who are near you to learn about the area and neuances but also you can cover for each other.
Click to expand...

You guys are talking me out of this private practice thing because that's 100% not acceptable. I'm one of those millennial lifestyle types of doctors (even though I'm really Gen X, but whatever). Vacation and protected time off are super important. As is not working 12 hour days regularly. Even though with me I'll be building while I also have other income sources, so I'm imagining vacation wouldn't be a huge deal? I already know people here and could likely come up with reciprocal coverage without too much hassle.
 
rollercoaster said:
You don't have to be available after hours I recall as a resident we left message on our answering machines to call 911 or come to ER in case of emergency.
All pharmacists are authorized to give 1-2 day/emergency refill for a medication.

The on call resident was never called by any of the established patients.

Vacation - yes makes sense to have coverage unless you don't mind travelling with your phone or checking messages once a day.
Click to expand...

So the jury is out on whether or not this is OK. We left a similar message on our voice mails, but yep, the resident on call was also available if needed.
 
Doctor Bagel said:
You guys are talking me out of this private practice thing because that's 100% not acceptable. I'm one of those millennial lifestyle types of doctors (even though I'm really Gen X, but whatever). Vacation and protected time off are super important. As is not working 12 hour days regularly. Even though with me I'll be building while I also have other income sources, so I'm imagining vacation wouldn't be a huge deal? I already know people here and could likely come up with reciprocal coverage without too much hassle.
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I buy international cell phone coverage plans before going on trips. All my patients can reach me by cell phone 24 hours a day, 7 days week anywhere in the world. Also text, and email. I love my private patients! 🙂 I have had a few that have abused my availability that required intervention. Which is why I like to say that every new patient I accept is like a game of Russian roulette. 😛
 
For all of you in private practice where do you usually get documentations for your office, like the superbill, office policy overview, legal papers, or do you create your own.
 
Doctor Bagel said:
You guys are talking me out of this private practice thing because that's 100% not acceptable. I'm one of those millennial lifestyle types of doctors (even though I'm really Gen X, but whatever). Vacation and protected time off are super important. As is not working 12 hour days regularly. Even though with me I'll be building while I also have other income sources, so I'm imagining vacation wouldn't be a huge deal? I already know people here and could likely come up with reciprocal coverage without too much hassle.
Click to expand...

My practice has been open for 11 months, and I just spent almost 2 weeks on vacation. I let my patients know where I'd be, that I could only talk over the phone in limited quantities (there's a fee for it regardless). I got one call. Don't listen to others when it comes to how much you "need" to work, your mileage is going to vary regardless.
 
Don't just network with other psychiatrists. Meet the people who see those that need your help. Meet PCPs, therapists, and if you do other treatments besides meds, think about where those people show up (cardiologists, surgeons, priests, whatever).
 
So I just heard today about NPs in my community who cover call for psych providers for a weekend. I'm wondering about utilizing that as a resources. I would assume the pay would not be huge -- I've come across jobs for psychiatrists doing home call for a weekend for around $400, more if you answer a call. Not a bad gig if you're already in town and covering something else.
 
Doctor Bagel said:
You guys are talking me out of this private practice thing because that's 100% not acceptable. I'm one of those millennial lifestyle types of doctors (even though I'm really Gen X, but whatever). Vacation and protected time off are super important. As is not working 12 hour days regularly. Even though with me I'll be building while I also have other income sources, so I'm imagining vacation wouldn't be a huge deal? I already know people here and could likely come up with reciprocal coverage without too much hassle.
Click to expand...

Don't be crazy. I took full 4 weeks off during my 1st year in PP and just had my friend cover while I'm on vacation in a different time zone. Patients still occasionally E-mail and sometimes I forward an e-script. Not a big deal. PP is *much* more flexible compared to residency. My landlord, who's a more senior psychiatrist, and primarily an analyst, takes 6 weeks off every year in the summer, and then two more weeks over winter break, plus the Jewish high holidays.

PP generally has a much better lifestyle compared to facility/institutional based jobs, and especially friendly to a "millennial" lifestyle (i.e. 4 day weekends all the time, if you want). The key is to start early. It takes time and patience. Also, I would not at all take it as a given that you have to accept (all) insurance. More than 50% of psychiatrists in the US don't take any insurance. Very commonly people only take 1 or 2 kinds of insurances. IMHO, as long as you drop your fees to market rate, you can sustain a cash practice pretty much everywhere in the US, as long as your patient population is an employed, middle class group (i.e. pick your office location well). And if you want to treat SMI patients, PP is the incorrect model anyway. PP is also the only way someone can sustain a mostly therapy practice (although not applicable in my case).
 
F0nzie said:
1. Relax about the business structure. You can go sole proprietor and test the waters. If you bail on pp it's a pain to dissolve an LLC or corporation.

2. Look into Virtual offices. You can get an address in a building and rent offices by the hour for really cheap. Once you start getting patients you can invest in an office or share with someone.

3. Cash vs Insurance. If you don't want to deal with insurance then don't. So what if other psychiatrists are taking insurance. Send them a business card and have them send patients your way.
Click to expand...

Do other psychiatrists send you patients? What kind of patients?
 
Several of my last years opened a PP and they go to the nearby peds offices to get referrals. So far, they are getting 5-6 new eval a week. Cash only.
 
This is in Houston, $200-350 for new eval and $100-150 for 30 min f/u
 
Does an office have to be a "medical" office space or can it be just any office space?
 
Shikima said:
Any office space, 2 chairs, folder and a prescription pad.
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So there are no rules/laws as to where you can see a patient? Can you see patients in your living room? In a car? Just curious.
 
kirkirkir said:
So there are no rules/laws as to where you can see a patient? Can you see patients in your living room? In a car? Just curious.
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You can even do telepsych from the Millennium Falcon if you can get internet reception.
 
nitemagi said:
Don't just network with other psychiatrists. Meet the people who see those that need your help. Meet PCPs, therapists, and if you do other treatments besides meds, think about where those people show up (cardiologists, surgeons, priests, whatever).
Click to expand...
This was a big tip I was given by my PCP. He said, whatever you do, let PCPs know you're available, because they're desperate for someone to send patients to.
 
kirkirkir said:
So there are no rules/laws as to where you can see a patient? Can you see patients in your living room? In a car? Just curious.
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There are zoning laws that separate areas into resienetial or commercial.
 
I've been doing PP for almost 3 years now.

Here are some things I have learned, my top 10 list.

1) The start is slow. I would recommend having a side job initially if you have a family or big loans etc. If you can live off a resident type salary, you can probably jump right in.
2) Cash patients are not that easy to find if you live in a busy area. I decided to take insurance and am thankful I did. You can slowly wean off the insurance if you need.
3) Overhead can really vary. If you aren't careful, your overhead can get up to 50% or more of your practice. I have mine around 25-35% now.
4) Do the secretary/billing stuff yourself early on. As you get busier, hire people. Your percentage of overhead will go up but your overall productivity will go up as well and your headaches will go down.
5) Be EMR proficient. Don't just use one, be good at it. Especially if you take insurance, the templates help with the coding but also with writing scripts, labs and having access to notes when you are out of the office. It can be beneficial to have one that local doctors are also using.
6) Get to know PCPs. Everyone says get referrals from therapists or advertising. Nobody will send you referrals like PCPs (except insurance panels). I don't have a website, I never sent flyers to therapists. I just visit one PCP office per month.
7) Have a comfortable work space.
8) Try to work with a group if you can. I know psychiatrists are often loners but sharing overhead is the best decision I made for my bottom line. Also helps with coverage on vacation.
9) If you don't want to go it alone, join a group that will pay for productivity. Make sure the overhead is less than 40% (they give you at least 60 cents on every dollar you earn).
10) Be a good psychiatrist.

I do have a question for others.
What percentage of revenue is going to overhead for other psychiatrists and what do you do with it? For example do you have secretary, biller, your own office or sublease, free EMR or paid (or paper charts), answering service and any other expenses.
 
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