Many new physicians think that starting a new practice is just a medical or clinical project. However, that is not true. Starting and running a medical practice is more of a business, compliance, and revenue cycle project. In reality, it starts months before the first patient walks in. The administrative work you do early, like registering the practice, enrollment, credentialing, privacy policies, staffing, and billing setup, determines how well your practice will perform, and not your medical expertise. So, when starting a practice, you should think more like a businessman rather than a medical professional.

We have created this guide to help you in this process. After putting in a lot of effort, we have created a sort of checklist that will make things easy for you and will help you plan your steps. So, let’s start right away. 

Step 1: Choose Your Ownership Model and Legal Structure

Don’t just rush to buy tools and software. Before you order supplies or compare EHRs, decide how the practice will legally exist. This is the most important thing to think about. You have mainly 4 choices: sole proprietorships, partnerships, LLCs, and corporations. Each of these choices will affect your liabilities, the taxes you have to pay, and the required filings. It’s best to consult with a lawyer before you make the decision. 

At this stage, define the basics in writing: specialty scope, patient mix, expected payer mix, whether the practice will be solo or group-based, and whether ancillaries such as in-office lab testing will be offered.

Step 2: Build a Startup Budget and Timeline

Once you have decided what type of practice you are going to open. The next step is to check how much money you can afford to invest, where to invest, and the approximate timeline. The best way is to start with a reverse timeline from your intended opening date and work backward for licensure, enrollment, leasehold improvements, technology setup, policy writing, and staff hiring.

Also, if you are trying to open a practice in a new state, the process is very long. A good rule of thumb is to start working on your plan at least 6 months before. Credentialing, privileging, and enrollment processes can take 90 to 120 days.

Your budget should separate one-time setup costs from recurring operating costs. Even if your exact numbers differ by specialty and market, it is smart to verify the fees you can know in advance. For example, the IRS says an EIN is free, CMS says NPIs are free, and CMS also notes that the 2026 Medicare enrollment application fee is $750, but that physicians, non-physician practitioners, physician organizations, and non-physician organizations do not pay that fee.

Step 3: Select Location, Technology, and Operational Infrastructure

Location is not just a real estate choice. It affects patient access, staffing, payer contracting, parking, and how expensive your buildout becomes. The AMA recommends assessing the local market, population needs, and whether buying or leasing is the better fit before selecting space. Once you have a site, align your buildout plan with your workflow: reception, check-in, exam rooms, specimen handling, provider work areas, and secure storage for records and supplies.

Technology should be chosen with compliance and billing in mind, not just note-writing convenience. HealthIT.gov reports that as of 2021, 88% of office-based physicians had adopted an EHR, and 78% had adopted a certified EHR. In other words, electronic systems are now standard operating infrastructure. When reviewing vendors, ask for clear pricing on implementation, interfaces, training, reporting, patient portal functions, e-prescribing, and claim-scrubbing support.

Step 4: Start Payer Enrollment and Credentialing Early

This is the step where you need to put some extra thought and effort. Why? Because this is the step that slows down all other operations of your practice. First, you have to get your practice enrolled with big insurance companies. If you are not aiming for multiple payers, then just Medicare will do at the start. 

Once your practice is enrolled, the next step is to get your physicians credentialed. This is very critical. Because if you have done everything else, but your physicians are not credentialed, you cannot bill insurance claims. Meaning you will be providing services free of cost to patients. However, the credentialing process is very complex and lengthy. It can take months, and even longer if any mistakes are made in the process. So, your best course of action is to outsource insurance credentialing services to third-pary companies, like MediBillMD. 

Now, these are the 4 main steps of starting a practice. However, there is much more to it than just these 4 things. Below, we have provided a summarized table of everything you need to do. Take a look. 

Area	What to Complete Before Opening
Business setup	Choose a legal structure, register the entity, and confirm tax and banking setup
Core IDs	Apply for EIN and NPI
Licensing	Confirm state licensure, malpractice, and DEA if needed
Medicare	Enroll in PECOS, work with MAC, and submit CMS-460 if participating
Commercial payers	Build CAQH profile, upload documents, attest, authorize plans
Compliance	HIPAA risk analysis, Notice of Privacy Practices, OSHA exposure control plan
Lab	Confirm whether a CLIA certificate is required for waived or PPM testing
Operations	Lease, vendors, EHR, phone, website, supplies, workflows
Staffing	Hire, train, cross-train, and assign billing and front-desk accountability
Revenue cycle	Test eligibility, claims, ERA/EFT, fee schedules, statements, and denial workflows

Wrapping Up

Finally, we have reached the end of our guide. We know that this is a lot of information to take in. So, let’s summarize everything in a few points. Here is what you need to do to start a practice in a systematic way.

• Form the entity
• Build the budget
• Secure identifiers
• Start payer enrollment and credentialing early
• Outsource to professional medical credentialing companies

The process can be confusing, frustrating, and time-consuming. But if you follow the checklist we have provided, you can give a structure to your approach.