Your Practice Made Perfect

This podcast series provides support, protection, and advice for today’s medical professionals. Brought to you by SVMIC, a mutual insurance company that is 100% owned and governed by our policyholders.


Jun. 15, 2018

Episode 020: Ready, Set, Start-Up

Brian Fortenberry talks to Sheri Smith to learn more about setting up a private practice like a business. They discuss how SVMIC can offer recommendations on vendors and professionals, as well as providing a practice startup toolkit that includes checklists and medical records retention details for each state.

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  • Transcript

    Speaker 1: You are listening to Your Practice Made Perfect; support, protection, and advice for practicing medical professionals. Brought to you by SVMIC.

    Brian: Hello, and thanks for joining us today in our podcast about starting up a practice and having a checklist for that. I'm Brian Fortenberry, and I'm joined today by Sheri Smith. Hi, Sheri. How are you?

    Sheri: Hey, Brian. I'm great. Thank you.

    Brian: Fantastic. Let's start off, before you really get into the meat of what we're going to talk about today, tell us a little bit about yourself.

    Sheri: I am one of the senior medical practice consultants here with SVMIC, and I have been here for about 15 years. Prior to joining SVMIC, I worked in the orthopedic and neurosurgical field, and so I had my share of doing some assistant management in HR and so forth. And then I took a little stint in between, I actually worked for six years with an electronic health record company selling and training on EHRs.

    Brian: Wow. Okay. You have seen a couple of different sides of the industry, and electronic health records are -

    Sheri: Yes, I have.

    Brian: ... somewhat challenging.

    Sheri: I've seen both sides here.

    Brian: Well, do you have a formal organization structure setup? Is there one of those? Is there a checklist to go by? What does that look like?

    Sheri: Our MPS department has put together really detailed checklist. It's actually called an Opening Practice Toolkit -

    Brian: Oh, okay.

    Sheri: ... and it does include a variety of things along with the checklist, information about medical retention for each state as well as a lot of other things. But one of the things that I like to discuss initially with physicians that are going into practice for themself is making that initial organization structure setup. It's important that they understand that there is a legal and tax entity that has to be established, and so whether they're deciding to form an S corporation, an LLC, or sole proprietorship or even just a general partnership, it's really important that they seek advice from an accountant as well as an attorney to make sure that they make the best decision for the individual or the group that they're joining.

    Brian: It's really setting up a business, I mean, before you really even get into the rendering of services, you're having to make these decisions about an S corp or an LLC or what type of thing to set-up and all the things you're going to need. You really don't always think about that if you're getting ready to set something up. Is there a facility selection or a build-out plan with this?

    Sheri: I do like to talk to them about facility selection and build-out plan because the health care practices have a variety of different requirements that they have to deal with in the medical offices space, so depending on if they're going to provide clinical or diagnostic, laboratory or other type of ancillary services, they've got to really think about the needs of their particular office. They're definitely different from a standard tenant. They've gotta think about space and having to deal with equipment, maybe X-ray, radiology equipment or whatever it might be, and that can be a challenge, so I'm always encouraging them to seek qualified medical real estate brokers out there to assist them with that. We can certainly help them review contracts and so forth regarding leases, but it's important for them to seek those professionals that can help them find the location that's best for them.

    Brian: I imagine, even within that as I'm sitting here thinking, you're talking about even as simple as making sure the facility, like you were saying like about radiology equipment, that that is going to be contained, and even HIPAA privacy type things and having certain sections, those are parts that people might not even really consider and think about when they get ready to start up a practice, right?

    Sheri: Absolutely. There's always some top things that I like to mention to our policy holder or our physicians that going into selection of a build-out or a facility. There's always the issue of cost. Budget is always a concern because, again, the traditional office space is not necessarily going to be presentable for an actual medical facility space. I'd also like to remind the physicians to think about accessibility because, again, depending on the nature of the practice, the office space must be accessible to our patients. The patients with serious illnesses or physical handicaps, must be easily accessible for them.

    Also, they've gotta think about things about wheelchair ramps, elevators, electronic doors. I mean, these are things that initially going into setting up a practice you don't necessarily think about, but it is something that's going to be required and they're going to have to deal with as they make that decision. But another important area, of course, is parking. A lot of them don't even think twice about parking, but that's always an area that can be of some concern. Usually, I mean, a medical facility should have more parking than the typical ordinary office space, as well as just having convenient drop-offs for our patients. It just needs to be good area and easy for our patients to get in and out.

    Brian: You think about it, just on the parking aspect of it, a pediatrician office is going to have a different need for patients being able to get in than, say, a joint replacement center -

    Sheri: Exactly.

    Brian: ... and so you have to take that into consideration. As a matter of fact, you brought to mind, I had a relative that had to have a hip replacement done. When we went to the doctor's office, one thing I noticed right off of the bat was there were wide elevated seats. I thought, "Wow. How great because these people with knee replacements or things are not having to get down as far, and it's making it more accessible and easier.” And the doors were slide doors that were motion sensors instead of having to, if you had a walker, open things up. That really is an important part of the process of having to think through it, for certain.

    Have you started the credentialing process? I mean, obviously, when you set up a practice like this, you're going to have to go and check a lot of boxes when it comes to credentialing and all of those things with health insurance and everything else. How do you help people with that? What are some key points they're going to need to know? Because that's going to be a big part up front about getting set up and getting paid.

    Sheri: Absolutely. The credentialing process can be very time-consuming, so I always encourage our physicians to start that process early. The providers can be limited on when they can start that process because they do have to have office space in place, they do have to have business bank accounts, and they do have to have their organization put together before they can start that process, but to begin the credentialing process, the provider should and they have to have all their background documents, all of their medical and DEA license. They have to have full CV and, of course, proof of their insurance and just copies of all of their relevant documents. Even though each carrier has their own process of how they handle the credentialing, they all still do it pretty similar. I mean, the process itself is the actual carriers going through and just verifying and submitting information from that physician to a committee that has to review that information. The process of that itself can go from anywhere from 90 to 120 days, so -

    Brian: Wow.

    Sheri: ... once that committee has actually approved that, then it goes on to contract, negotiations. Even though we're seeing that it's not as easy now in today's world, we are having to live more by our carrier's requirements. There's not a whole lot of negotiation and language and reimbursement rates changing in the contracts, but it's still something that they want to review those contracts and try to negotiate the best they can.

    Brian: You were saying between 90 and 120 days. This is certainly something you're going to have to plan for well in advance of starting the actual practice up because you're going to have to have that income and that reimbursement just to stay above water, right?

    Sheri: Right. Absolutely. One thing is, a lot of physicians are not ... They don't necessarily know that, other than Medicare, other insurance carriers will not retroactively reimburse physicians -

    Brian: Oh, okay.

    Sheri: ... and a lot of times, they think, "Once our office is established set up, we can start billing for services," but if they are not completely credentialed through the carrier, they will not be reimbursed for those data services.

    Brian: Wow. Of course, kind of building on that, I'm thinking through the process here. Now we have got our facility, and there's been a checklist for that, and now we're getting our insurance and credentialing in place, but at some point, we have to have some employees and we have to have people to come in so there's bound to be a human resources or an HR process involved there as well. I'm certain you guys have some recommendations for that. What do you say on that one?

    Sheri: Well, we do. We certainly want to help and encourage and help with that HR process. But unfortunately, a lot of the smaller practices, they don't have the experienced HR professionals, and it's not an easy task for them to start up and actually start hiring employees. A lot of times, they're having to outsource that to HR organizations, which usually is a big help, especially initially to our startup practices because they can actually, they don't have to worry about the laws and the specifics that's burdensome, initially. A lot of times, we also do see that our small organizations will start out with a non-HR executive, usually just an employee that's trying to manage the facility. They may not have the HR experience, but they're having to all of a sudden be stuck in that role. I've also seen the spouse is often brought in and used as the HR executive. But there just needs to be someone in place that handles that because just the administrative duties, the policies concerning pay and benefit, unemployment compensation, and just taxes, in general, just workman's compensation. Those are just type things that, again, that are really important at hiring and starting up a practice, and they want to make sure that those steps are taken, and they're done correctly.

    Brian: In anything, there's going to be a lot of regulation in place from equal opportunity employment and things like that that a lot of these people aren't going to be aware of, and there probably is more than just your standard if you are hiring for a business with a health care facility. Probably, as you say, getting an outside source that has experience to help you do that might be a pretty good idea then.

    Sheri: Our recommendation is to hire qualified outside source initially, and once usually you have the process in place, you can bring those in-house, but usually best decision is to outsource it initially.

    Brian: Certainly, with all the stress of everything else going on, probably a good idea. Now, once you've got all this in place, there's certainly a regulatory compliance part of this process. Do you guys have some ways of helping them implement this regulatory compliance program that's going to be require for just about anything they do in health care?

    Sheri: At SVMIC, of course, our department, the Medical Practice Services department, has employees that do assist our physicians with compliance training. We are certainly happy and love going into our physicians' practices and helping them with hiring staff and helping train on the compliance end of it.

    Brian: As we have been talking through some of these things, it has been brought to mind to me that we do have people that are experts in some of these areas that are more than willing to help out practices that may be starting up like we're talking about because that seems to be like when the big wave of everything is coming is “We really gotta get on top of this from hiring to compliance to making sure that we have all of the Ts crossed and the Is dotted.” But we have people out there that are specific to helping with just HIPAA, correct, and people out there that are going to be able to help with OSHA and things of that nature to just kind of get them set up. But a lot of this stuff would be applicable as well to an established practice, correct?

    Sheri: Absolutely. I mean, we do have experts that do specialize in different areas related to compliance, and we are able to assist them whether it's a practice startup or whether it's just a regular policy holder in a group, we're here to help them at any time.

    Brian: In my experience, it seems like we're going to have ongoing issues. Once you get the practice set up and established and ready to go, that's certainly not the end game. That's just the beginning, often, and you're still going to be dealing with HIPAA issues for the life of the practice, and OSHA and other things. If you ever decide to expand your area or open up a different office of your practice or have multiple locations, you're going to be dealing with some of these things over again that you haven't dealt with maybe in years when you initially set your practice up, and now the regulations may be different and things may be different than it was, say, 10, 15, 20 years ago when you initially set things up.

    Sheri: Absolutely. I mean, you're correct. I mean, unfortunately, regulations do change, although most of the compliance programs, they do require annual training and annual review of policies and procedures, so those are things that they do have to continue to follow through with, make sure their new staff as well as old are up and they understand the policies, procedures, they are trained on them, and again, they are trained on any of the new regulations that do change and appear each year.

    Brian: With the ever-changing world of health care we have today and new regulations and laws, it is in the best interest of anyone out there involved in the healthcare field, and certainly physicians and practices to stay up to date on what those changing regulations look like. I know that you guys are a fantastic source for helping them navigate those treacherous waters sometimes.

    Sheri, if you could add a couple of points for any practice or practice manager or physician that is getting ready to open up a practice, that you think, "Boy, these are really critical things that they're going to have to latch on to," what would be your best advice to those people?

    Sheri: Well, I would most certainly recommend that they call SVMIC. We would love to provide them with our detailed Practice Startup Toolkit. Our professionals are happy to sit down with them and actually go through the step by step checklist, and we can also offer recommendations on vendors and professionals to assist them through this whole process.

    Brian: Sheri, thank you so much for being with us today.

    Sheri: Thank you, Brian. I appreciate it.

    Speaker 1: Thank you for listening to this episode of Your Practice Made Perfect with your host Brian Fortenberry. Listen to more episodes, subscribe to the podcast, and find show notes at svmic.com/podcast. The contents of this podcast are intended for informational purposes only and do not constitute legal advice. Policy holders are urged to consult with their personal attorney for legal advice as specific legal requirements may vary from state to state and change over time.

     

The contents of this Podcast are intended for educational/informational purposes only and do not constitute legal advice. Policyholders are urged to consult with their personal attorney for legal advice, as specific legal requirements may vary from state to state and/or change over time. All names have been changed to protect privacy.


About our Guest

Sheri Smith

Sheri Smith, FACMPE came to SVMIC in 1996 working alongside Tom Stearns in developing the Medical Practice Services Department. She spent nine years as a Medical Practice Consultant working with physician practices before leaving to work in the electronic health records industry. Sheri returned to SVMIC in 2011 where she currently spends most of her time consulting with policyholders on matters related to EHRs, Meaningful Use and Meaningful Use Audits. She is a Fellow in the American College Medical Practice Executives and Past Present of Tennessee MGMA.


About our Host

Brian Fortenberry is Assistant Vice President of Underwriting at SVMIC where he assists in evaluating risk for the company and assisting policyholders with underwriting issues. He has been involved with medical professional liability insurance since 2007. Prior to his work at SVMIC, Brian worked in the clinical side of medicine and in broadcast media.