As promised, I am here to do an AMA about starting a medical practice as a PA.  Sorry for the delay, I promised the AMA yesterday but I had a bad migraine.  I will do my best to answer questions throughout today and tomorrow.

Background: I have started many businesses in my life including three medical practices.  Each of these practices I started since I became a PA.  Each practice was successful, and two of the three were sold for profit.  I started my first practice 11 years into my career.

In order to save some time, I am going to list some basic information considering there is A LOT of misinformation out there and to hopefully help answer the most commonly asked questions I have gotten on this subject in the past:

1.       Yes, a PA can start, own, and run a medical practice in all 50 states, DC, and Guam.  Some states have more hoops to jump through than others, but just like you don’t have to be a chef to own a restaurant, you do not need to be a physician to own a medical practice.

2.       If you choose to run a practice that accepts medical insurance, understand that you will be getting paid 85% of what a physician’s practice would make.  Medical practices have a lot of expenses, so the profit margin is fairly small to begin with.  Losing out on that extra 15% is why it is rare to hear about a PA owned practice that accepts insurance.

3.       Since 2022, PAs can directly bill Medicare and other payers for their services.  Legally speaking, you do not need to have a collaborating physician be a part of any contracts with any third party billers.  For example, when trying to get a contract with Aetna in the past, the physician had to also sign the paperwork.  When renewing our contract with Aetna this year, when they asked for the physician to sign, I told them “nope” and they still gave us the contract. Basically, since 2022, physicians roles can be entirely collaborative, which makes it much, much easier to start a PA owned practice that bills insurance.

4.       You must be aware of Corporate Practice of Medicine laws.  Each state is unique, but basically, you will want to review this website to learn the laws relevant to your chosen state (or states) of practice. 

5.       There are many options for finding a collaborative physician.  Obviously approaching one you have already worked with and who you have developed trust with is the best option.  Other options include approaching a Medical Services Outsourcing (MSO) company.  Some examples of this include Guardian MD https://guardianmedicaldirection.com/, Doctors4Providers, or Collaborating Docs.

6.       You will need to first choose the name of your company, then run a check with your state’s Secretary of State Corporations Database, and you will want to check the Federal Patent and Trademark Office to avoid any potential future lawsuits.  Then once you are sure there are no other practices with similar names, register your company.  Your state may have specific rules about what kind of business you must file as.  For example, in California you have no option but to file as a Professional Medical Corporation (PMC) which is the legal equivalent of a PLLC in most other states.

7.       I highly recommend hiring a business lawyer with expertise in medical practice law.  Having them do things the right way from the beginning will save you a lot of time, money, and headache in the future.

8.       Find a malpractice/liability company.  Researching this is important as there are actually very few malpractice companies willing to work with a PA owned practice.  For reference, I ended up using Admiral Insurance for all of my companies, though there are a couple other options.

9.       Once you have a name, have registered the company with the SOS, malpractice insurance, and a collaborative physician, technically you can open your doors provided you are cash pay only. 

10.   EMR is only required for companies that bill insurance.  If you are an aesthetic practice or something, technically you can just use things like Microsoft Word or even paper charts.  Electronic charts are only a requirement of practices that bill insurances.  There is no state that requires EMR otherwise.  However, there are several cheap, and even free EMR systems.  I used Kareo and Athena.  For the third business, we actually built our own EMR unique to our practice, which is actually surprisingly easy and cheap to build if you have a partner who is good at IT.

11.   Get a partner.  For many reasons, you do not want to do this alone.  What do you do when you get sick, or want to go on vacation?  The difference between being an employee and a business owner is vast.  Everything is on you.  Payroll, HR, patient complaints, contract negotiations, legal issues, marketing, building a website and SEO, taxes filed quarterly,...  All that and more in addition to actual patient care.  Being a business owner is a full time job that should be seen as entirely separate from the job of being a clinician.  It is completely impossible to do it all by yourself.  If you try to do it all by yourself, you will fail.  Also, Medicare rules still state that a practice cannot be owned 100% by a PA.  You can own 99% of it, but someone else must have at least 1% ownership.  That 1% can be a spouse, a child, a physician, or anyone.  So if you want to bill insurance ever, you will need to give up equity anyways.  You might as well give it to someone with skin in the game that you trust to be a good partner.  I have found that for each person that I give equity to, my business becomes more successful.  My first business I was the only owner, and I barely managed to make $100k/year.  My next business had 2 owners, and we were making over $650k during a bad year, and $900k on a good year.  My current business has 3 owners and we started making 7 figures within 8 months of opening.

12.   Getting a bank loan up front is nearly impossible without proof of concept and proof of income.  The good news is, a medical practice can start small and build fairly rapidly.  Don’t bankrupt yourself before you know you have a winning business model that can actually make money.

I will try to answer questions to help guide those of you who are entrepreneurial in spirit.  I will try my best not to dox myself openly, but if you DM me I may be able to give more specifics about each practice I have opened.