What are the steps to start a medical practice?
The core steps to start a medical practice are: (1) write a business plan and budget; (2) choose a legal structure and get your EIN/tax ID; (3) obtain individual and group NPIs; (4) secure state licensure, DEA registration, and malpractice insurance; (5) begin credentialing and payer enrollment early (60–120 days per payer); (6) set up your EHR, billing system, and fee schedule; (7) establish revenue cycle workflows; and (8) handle location, staffing, and compliance (HIPAA) before opening. Starting credentialing and enrollment early is the single most important move for cash flow.
Starting your own practice is one of the most rewarding moves a physician can make — and one of the most operationally complex. The medicine is the part you’re trained for; the business is where new practices stumble. This checklist lays out the steps in the order that actually protects your cash flow.
1. Build a business plan and budget
Define your specialty, location, patient mix, and projected volumes. Build a realistic budget that includes working capital to cover the months before collections ramp up. This number surprises people — plan for it.
2. Choose a legal structure and get your tax ID
Decide on an entity (PLLC, PC, etc.) with your attorney and accountant, then obtain your EIN from the IRS. This is the foundation everything else attaches to.
3. Obtain your NPIs
You’ll need an individual (Type 1) NPI and usually a group (Type 2) NPI for the practice. Payers tie enrollment and payment to these, so get them early.
4. Secure licensure, DEA, and malpractice coverage
Confirm your Michigan medical license is active, register with the DEA if you’ll prescribe, and bind malpractice (professional liability) insurance. Payers require these for credentialing.
5. Start credentialing and enrollment — early
This is the step that makes or breaks your launch. Credentialing and payer enrollment can take 60–120 days per payer. Start months ahead so you’re in-network and able to bill the day you open. (We wrote a full guide on how to credential a physician.)
The #1 startup mistake: waiting to credential until you’re almost open. It guarantees weeks or months of seeing patients you can’t bill.
6. Set up your EHR, billing system, and fee schedule
Choose your EHR and billing platform, build your fee schedule, and configure coding and charge capture. Decisions here determine whether claims go out clean or get stuck.
7. Establish your revenue cycle workflow
Define how charges are captured, claims submitted, denials worked, and patients billed — before your first appointment. A practice without a revenue cycle plan is a practice that won’t get paid.
8. Handle location, staffing, and compliance
Finalize your space and equipment, hire and train staff, and put your HIPAA and compliance program in place. Then you’re ready for opening day.
Want the business handled so you can focus on patients?
New practice consulting from MMSM covers everything from NPI setup to credentialing, billing systems, and ongoing revenue cycle management — sequenced correctly so you open in-network and profitable. Book a free consultation or call (517) 485-0001.
