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Preparing to Opening Your Solo Practice: Time-Critical Activities

Authors: Russell B. Still and Lawrence Geller, MS, MBA, Medical Management Associates Inc.

Editor’s Note: This is the fourth in a series of articles on starting a solo ophthalmology practice. Read 

Once you’ve made the decision to go solo, developed a business plan, secured funding, chosen a legal entity and selected a name for the practice, you’re ready for the next steps. In this article, we will discuss some of the most important aspects: selecting your office space, credentialing, staffing, computer selection, and purchasing other equipment and supplies.

Note that the many steps involved in opening a practice are far beyond the scope of this article. Each step requires careful planning to make sure you are prepared to open your practice.


Space

You first have to decide where you want to open your practice and whether you will be leasing or buying property. The analysis you conducted while developing your business plan will help to guide this decision. Once your loan has been approved, you should begin the process of space selection, finalizing the lease or mortgage terms, and planning for any improvements needed to prepare the space for occupancy. If you need to do major renovations, design and construction could take 60 to 90 days. Include this variable in your plans.

You’ll want to engage a medical practice consultant or attorney with expertise in medical office leasing to review and negotiate the terms of the lease agreement. If you are leasing in today’s market, you may be in a far better position to negotiate the lease rates, improvement allowances, terms and termination provisions. However, not all building owners are willing to be flexible on lease terms.

You will also want to rely on the skills of a medical practice consultant experienced in office design. We recommend you plan for more space than you will need initially, as it’s far more problematic to have too little space than too much. The extra space will give you the flexibility to grow your practice and bring on an associate or partner. Even if you decide to stay a solo practitioner, you can sublet space at a future time (just make sure your lease agreement permits this).

Your office-space designer should understand the particular needs of an ophthalmology practice. Don’t assume the landlord’s space planner knows what you need. A poorly designed space can hurt the efficient functioning of your office for years to come. The AAOE Consultant Directory is a good resource for identifying space planners who have experience with ophthalmology practices.

Your interior design makes a vital contribution to your image: Don’t shortchange yourself and your practice by neglecting or skimping on things like wall and floor coverings, an attractive color scheme and accessories such as pictures and comfortable furniture. These details influence the patient’s favorable impression of your practice.

Picking the right furniture and equipment for your office is a critical decision — especially since it can take weeks (or months) for vendors to ship those items. Your interior designer can help you select the furniture and accessories that best suit your budget, style and needs. While you can do this job yourself, you may not have the time or experience to make the right choices. And the wrong choices, for items that don’t fit or wear out too soon, will be a waste of your money.


Credentialing

Credentialing is the process of applying for hospital privileges and participation in Medicare, Medicaid and the various managed care plans serving your community. In some markets, approval can take up to six months after the application is accepted. Medicare applications are somewhat complicated, and your application can be rejected for the most insignificant errors. Further, recent changes in Medicare billing policy permit a physician to bill only one month in arrears. This makes it all the more important to start the process early. You don’t want to be treating patients for free during the first few months in your new practice. A consulting firm experienced with credentialing can be a big help with this process.

Initially, you should participate in as many managed care plans as possible to reach a broad patient base. Similarly, being on staff at multiple hospitals can help you reach a broader referral base.


Computer System

Your computer system, including the practice management billing software and electronic health records (EHR) system, is the nucleus of your operations and one of your largest initial expenses. Choosing an EHR system is probably your primary concern. There are many factors to consider, but two of the most critical are ease of use and sustainability — does it have staying power or long-term viability and dependable tech support over time?

Begin your research as soon as possible. While your primary concern about the computer system is its clinical capabilities, the functionality of the practice management component will also affect your billing and reporting capabilities. You will need to make sure your practice management software, EHR system and diagnostic equipment can communicate with one another.

Start by visiting EHR Central, which includes a list of vendors in the ophthalmology market and information on devices with which each system interfaces. In addition, you will find AAOE members who have implemented EHR and agreed to be a resource to other members evaluating the system used by their practices. Search the E-Talk archives and use other resources to ask colleagues for recommendations and investigate systems used by other ophthalmology practices.

Then choose three or four systems to examine thoroughly. Don’t rely on the salesperson’s demonstration. Get your hands on the system and “drive it” yourself by visiting practices that are using the software. Get feedback from the physicians and staff about the user friendliness of the system and how well (or poorly) it is supported.

The purchase of hardware, including printers and scanners, should be coordinated with the supplier of your computer system as well, to assure compatibility and smooth installation. Select a vendor with a stable business history that is committed to ongoing system improvements to accommodate payer-mandated changes and updates to new technology. Sustainability is never certain with computer systems. In the corporate world, companies both big and small can crumble. However, it is far more common for small businesses to close up shop quickly, so you need to evaluate that risk during your assessment.


Equipment and Supplies

Rely on a specialty ophthalmology vendor for your specialized items. For office systems and supplies, many practices choose to join a group-buying organization for pricing advantages. These organizations can provide consistent, discounted rates on numerous items, including office and mailing supplies, stationery printing, medical supplies, lab supplies, laundry and uniform services, and payroll processing. Diagnostic equipment can be purchased through specialty vendors, buying organizations or manufacturer’s representatives. SimplifEye, the Academy’s buying group, is a good place to start. Other major office equipment purchases will include a copier, fax machine, postage meter and telephone system.


Staffing

You assessed your staffing needs in your business plan. Your business office functions are critical. A strong administrator is vital to getting your practice off the ground and sustaining good performance. You should bring this manager on board several weeks before your opening date. Your administrator will be an indispensable resource to help you avoid costly mistakes. Prior medical management experience is a must; this is not the time for on-the-job-training. Personality is also an important consideration when choosing the right person. Ophthalmology Job Center, AAOE Consultant Directory, State Society, and recruiters are recommended resources for identifying candidates. Except in special circumstances, you need someone who has experience with insurance billing, management and financial administration.

Other staffing needs will be more basic and can be delayed until later. For instance, receptionist-level personnel can assist with the insurance billing tasks, at least initially. An ophthalmic tech will make you more efficient, but there is no need for one immediately, since you’ll only be seeing a few patients a day to start. You can add this position as your patient volume increases. Allow time to hire a tech and get him or her up to speed. Some markets are very competitive, and you may need to hire an inexperienced tech and train that person in house.

There are many things to do as you prepare for opening day. Make sure you budget enough time to implement all of these time-critical activities. The timeline below offers a basic guide to help you stay on track.


Checklist for Starting a Practice

5 to 6 months before opening
  • Draft capital equipment and working capital budget
  • Site selection/Find office space
  • Lease/Negotiate a lease
  • Reserve an office telephone number
  • If relocating, apply for a state medical license; if remaining in same state, inform licensing board of new address
  • Apply for hospital staff privileges
  • Apply for federal DEA registration
  • Apply for state DEA registration, if needed
  • Apply for CLIA certificate, if needed
  • Establish business entity
  • Obtain Medicaid provider number and UniversalProvider Identification Number (UPIN)
  • Inquire into availability of hospital support package and negotiate package
  • Apply for employer identification number (EIN)
  • Select a practice name and reserve it with Secretary of State’s office
  • Retain consultant
  • Determine corporate structure
  • Obtain tax ID numbers and determine election

  4 to 5 months before opening

  • Begin credentialing applications
  • Select computer system
  • Finalize loan
  • Select telephone service vendor and reserve telephone and fax line
  • Sign lease
  • Begin Web site design

  3 to 4 months before opening

  • Order diagnostic equipment
  • Order office furniture
  • Determine business policies
  • Determine personnel policies
  • Begin recruitment for manager

  1 to 2 months before opening

  • Hire manager
  • Fill other staff positions
  • Order supplies
  • Set up electronic claims submission and train staff in billing functions
  • Prepare fee schedule and superbill
  • Implement offices insurance and workers' comp and health insurance
  • Build EMR and scheduling templates
  • Set up master files for practice management system
  • Order printed supplies
  • Run ads announcing practice opening; visit referral sources

ABOUT THE AUTHORS

Russell B. Still and Lawrence Geller are senior consultants with Medical Management Associates Inc. in Atlanta. They have been advising physicians and hospitals on medical practice issues for the past 20 years. Contact them via e-mail: rbs@medicalmanagement.com or lg@medicalmanagement.com. Mr. Geller has been a frequent presenter at the Academy’s Annual Meeting and a member of the Academy's Consultant Directory.