The New Physician Practice Start-Up Billing Checklist: Everything You Need Before Seeing Your First Patient

The Financial Foundation That Most Startup Guides Skip

Most resources for physicians starting a new practice focus on the exciting parts: choosing a location, designing the office, selecting an EHR, hiring staff, and building your referral network. The billing and revenue cycle infrastructure tends to be treated as an afterthought — something to figure out once patients start coming in.

This is a mistake that costs new practices dearly. The billing and credentialing decisions you make in the first 90 days determine when you start collecting revenue, how much you collect, and what your cash flow looks like in the critical early months when you are simultaneously ramping up your patient volume and paying your overhead.

This checklist covers everything you need to have in place before you see your first patient.

Phase 1: Business and Legal Setup (90-120 Days Before Opening)

Before you can bill insurance, you need a legal business entity. Choose your business structure — solo proprietorship, professional corporation, professional limited liability company — with input from a healthcare attorney who understands the specific rules in your state. Some states restrict the business structures available to physicians.

Apply for your Employer Identification Number (EIN) from the IRS. This is free and takes minutes online. You will need it for everything that follows.

Open a dedicated business bank account. This seems obvious but many new physicians delay it, which complicates accounting and gives payers nowhere to send electronic payments.

Establish your malpractice insurance coverage. Many payers will not credential you without proof of current malpractice coverage that meets their minimum requirements. Get a certificate of insurance that shows your coverage limits and effective dates — you will need this dozens of times during the credentialing process.

Phase 2: NPI and PECOS Enrollment (90-120 Days Before Opening)

If you do not already have a National Provider Identifier, apply at NPPES immediately. The NPI is free and usually issued within a few days. You need both your individual NPI (Type 1) and potentially a group/organization NPI (Type 2) for your practice entity.

Enroll in Medicare through PECOS (Provider Enrollment, Chain, and Ownership System) at pecos.cms.hhs.gov. Even if you do not plan to see many Medicare patients initially, enrollment takes time — typically 30-60 days if everything goes smoothly — and you cannot bill Medicare until enrollment is complete. Starting patients before enrollment means delivering uncompensated care.

Apply for Medicaid enrollment in your state simultaneously. State Medicaid enrollment processes vary enormously — some states are relatively fast, others take 90-180 days. Find out your state's current processing time and plan accordingly.

Phase 3: Commercial Payer Credentialing (90-120 Days Before Opening)

Identify which commercial payers are most prevalent in your geographic market and patient population. This varies significantly by location — in some markets, Blue Cross Blue Shield is dominant; in others, it is UnitedHealthcare, Aetna, Cigna, or regional plans.

Apply to your top five to ten payers simultaneously. Do not do them sequentially — each takes 60-90 days and you want to be credentialed with as many payers as possible when you open your doors. Applications that are submitted one at a time create a staggered credentialing timeline that leaves you out-of-network with some payers for your first six months.

Set up your CAQH ProView profile immediately. Most commercial payers use CAQH as the foundation for their credentialing process. A complete, accurate, up-to-date CAQH profile accelerates every payer application. Make sure your CAQH profile includes current licenses, DEA registration, malpractice insurance, education and training history, work history, and professional references.

Phase 4: Practice Infrastructure for Billing (60 Days Before Opening)

Select your billing approach before you select your EHR. The billing and practice management system you choose will determine your capabilities for eligibility verification, claim submission, ERA receipt, patient statements, and reporting. Many practices choose their EHR first and then discover it has inadequate billing functionality or poor integration with major payers.

If you are outsourcing billing — which is often the right choice for new practices that lack the volume to support dedicated in-house billing staff — select your billing company now, not after you open. You want the billing company involved in your technology selection and setup so the systems work together from day one.

Establish your fee schedule. Your fee schedule — the prices you charge for each service — should be set at 250-300% of Medicare fee schedule rates in most markets. This provides room for contractual adjustments from commercial payers while ensuring you are not leaving money on the table with payers that pay billed charges or a percentage of billed charges.

Phase 5: Pre-Opening Verification and Testing

Before you see your first patient, verify that you have received confirmation of credentialing from every payer you applied to, with a confirmed effective date. Payer ID numbers should be loaded in your billing system. ERA and EFT enrollment should be complete so you receive payments electronically.

Run a test claim if possible. Many billing systems allow you to submit a test claim to verify that your NPI, tax ID, and payer information are all correct before real claims go out. Discovering a setup error on your first real claim means delayed payment and manual rework.

Train your front desk staff on insurance verification, copay and co-insurance collection, and your financial policy before patients arrive. The habits formed in the first weeks of practice tend to persist. Building good financial collection habits from day one is far easier than correcting bad ones after six months.

The One Thing That Matters Most

If there is one message that should come through this entire checklist, it is this: start earlier than you think you need to. Every step in the credentialing and billing setup process takes longer than expected, and delays compound. The new physician who starts the process 120 days before their target opening date and encounters some delays will likely be collecting insurance revenue within 30-60 days of opening. The physician who starts 60 days out and encounters the same delays may be delivering uncompensated care for their first three to four months in practice.

Revenue cycle is not the exciting part of starting a practice. But it is the foundation that everything else is built on. Get it right from the beginning.