The Business of Medicine for Residents, Fellows and NPs: Does It All Revolve Around Credentialing?
Scary story: A few years ago I heard about a physician who wanted to open his own office. He had a great patient following, reputation, and didn’t have to deal with a non-compete with his current group, some of whom were retiring (they all practiced under a single Tax ID#). Anxious to set out on his own he found a great location, negotiated a three-year lease and started to hire staff for an opening 60 days out. The office space needed only minor repairs so there would be no delay in taking occupancy and adding all the furnishings and equipment he needed, which he purchased for delivery a week before opening.
For the next few weeks he was busy but was apparently on top of getting the office ready for launch. Staff was hired, software selected, furnishings and equipment purchased, and a marketing campaign underway.
But one month from that date he had a rude awakening:
He had forgotten about credentialing with the managed care payers.
Naïve to the ways of these payers, he mistakenly thought he could just call them up, deliver a new address and start to see their patients as of opening day. He had his new Tax ID# and everything necessary, or so he thought.
Here’s what he heard: 90 days to get on the plans. Maybe longer for some.
Translation: At least 60 days of overhead—rent, staff salaries, interest on any practice loans, marketing, etc.—and NO managed care patients. No charges could be filed with them. No A/R.
Yes, it all does revolve around credentialing when you are setting up a practice, either as a new employee, or as the owner of a private practice.
But it’s also a matter of who is going to provide the credentialing service.
My experience is that credentialing requires a lot more energy than just filling out and submitting the forms to payers. You need to have someone “bird-dog” it, literally from start to finish. Payers are busy, and usually are overwhelmed with credentialing applications, and you have to press them with friendly reminders. Respond immediately to their needs, especially when it comes to getting them all the paperwork they need. Make friendly calls to check in on progress. Ask for completion dates when you can start seeing patients. Be at their beck and call. It’s how you speed up the process.
And it’s best to have someone who knows the ropes. This isn’t a task for an office employee who’s never done it before. Seek out a company or person who has had multiple years of experience. If you have an IPA in your area, seriously consider joining and turning this over to them—credentialing is usually an IPA strength, and they will be able to give you an accurate reading on on-going progress and an effective date you can start billing for patient visits.
And then key everything around those end dates. You want your costs to dovetail with your first patient visits. Be sure to allow enough time for training and move-in, which should be two weeks from your opening day. Minimize non-revenue days.
With the sources at hand today there’s no reason for a repeat of the scary story above.—Tom Ellis, February 2020
Tom is the Founder of www.FirstMEDPractice.com, a platform for fellows, residents and nurse practitioners entering the job market that addresses key business of medicine issues related to vetting job offers and structuring a first practice.
I welcome your comments and thought. Please send to me at email@example.com