The private practice landscape is changing rapidly, driven by payment reform, regulatory changes, new technology and consumer demands, among other factors. Given this, it may be confusing—even intimidating—for physicians wishing to run their own private practice. That’s why the American Medical Association is here to help.
We take you through the critical steps of the process and highlight key considerations and resources, so you can start off right on the path to success in private practice.
It’s important to reflect upon “why” you want to get into private practice, as well as the challenges you may face. If you find the answer after consideration is “yes,” the next step is to create a plan.
The process of designing a business, raising money and acquiring office space and professional tools will take time. A stepwise approach can empower you to find a practice arrangement option that matches your priorities. Here are seven steps to consider (PDF) when starting on your journey to private practice:
- Location: Take stock of the local market and assess the needs of the population in that area.
- Licensing and credentials to practice and prescribe: Start as early as possible to complete any requirements.
- Professional advisors and peer collaborations: Consult the correct advisers for their expertise in legal, financial, compliance and information technology matters.
- Payer contracting payment models: Identify desired payment models for the practice.
- Professional insurance: Consider insurance policies commonly available to businesses.
- Equipment and supplies: Include all the items for your procurement list.
- Staffing: Use industry benchmarks to determine how best to staff your practice.
Additional resources for getting started
“Private Practice: Attending to Business,” a mini-series from the AMA STEPS Forward® podcast, focuses on medical practice business operations and efficiency solutions to create and support a thriving business.
The STEPS Forward® Toolkit, What to look for in your first or next practice, breaks down actionable steps for evaluating practice opportunities that can benefit even seasoned physicians considering a shift to a different practice type.
Anticipating, understanding and adapting to payment policies are fundamental to running a private practice. Those elements are discussed in the AMA’s guide, “New payment models: Decide a practice setting” (PDF).
Physicians and practice staff spend hours dealing with complex issues surrounding the insurance claim payment process, including prior authorizations, claim filing and payment reconciliation. AMA offers resources to help simplify claims submission and payment administrative aspects to improve practice efficiency:
- Trends in Payor Audits and Disputes, Part 1 (Webinar)
- Trends in Payor Audits and Disputes, Part 2 (Webinar)
- Payor Audit Checklist (PDF)
Emerging payment models
Physicians must identify payers to contract with and the desired payment models for their practice. This is a complex and detailed process, so working with an experienced health care attorney to negotiate these arrangements can be beneficial.
The AMA’s Medicare Basics series provides an in-depth look at important elements of the Medicare physician payment system.
Health plan/employer contracting
Practicing physicians encounter a wide variety of options when negotiating the terms and conditions of payment for services. The AMA has developed a comprehensive private practice toolkit on payor contracting that covers these elements:
- Payor Contracting 101 (PDF).
- Payor Contract Review Checklist (PDF).
- Payor Contract–Sample Contract Language (PDF).
- Examples of Significant Payor Unilateral Policy Changes (PDF).
Learn more from subject-matter experts with “Payor Contracting 101” and “Payor Contracting 201,” which cover basic contract provisions, basic legal rules governing contracts, commonly negotiated provisions, common disputes, and innovative and nontraditional opportunities.
Partnering with a hospital/health system/ACO
Many private practice physicians have the option of affiliating with or being employed by a hospital, health system or an accountable care organization (ACO). It’s important to consider key issues before forming an ACO with hospitals.
Partnering with a private equity firm or seeking venture capital funding
Physicians usually have options when contemplating external investment. While physicians should carefully review the specific terms of any investment opportunity, there are some high-level strategic considerations that usually apply (PDF).
It is vital to be prepared for and remain aware of legal and regulatory issues in private practice. Dive deeper to explore more AMA private practice resources.
One challenge involves payor audits, which have become more and more common. AMA offers a payor audit checklist (PDF) with key steps in responding to a payor records request, as well as a two-part webinar focusing on trends in payor audits and disputes relevant to private practices:
Strengthen the Practice Resource Guide is designed to help physicians, legislators, attorneys and others identify many of the benefits and limitations of several potential collaboration arrangements.
Starting a patient experience program
As consumerism continues to pervade health care, patients are demanding more convenience and clearer value from health care providers. That’s why it’s critical to think upfront about building a patient experience program.
Through these stronger connections, physicians may identify additional factors that contribute to poor health and find new opportunities to both partner with patients and collaborate with colleagues in other specialties.
Successful practices also take leadership to address the social determinants of health affecting patients and drive social health initiatives. Learn more how patient experience programs can benefit your patients and practice.
Dive deeper to explore more AMA resources on getting started in private practice.
Learn how to grow your private practice and make it thrive with guidance from the AMA.