Starting a Private Practice: FAQs for Healthcare Providers
Opening your own private practice is a major milestone for any healthcare professional. Whether you’re a dentist, physician, nurse practitioner, or licensed therapist, owning your practice allows greater autonomy, flexibility, and the opportunity to shape your care model around your values. But launching a practice also means stepping into the role of business owner, with all the legal and regulatory considerations that come with it.
Below, we answer some of the most frequently asked questions healthcare providers have when starting a private practice—from legal structure to licensing, compliance, and contracts.
What Legal Structure Should I Choose for My Private Practice?
Most solo or small-group practices form a Limited Liability Company (LLC) or a Professional Limited Liability Company (PLLC), depending on state regulations. The LLC/PLLC structure is often preferred because it offers:
- Personal asset protection: Shields your personal assets from business liabilities.
- Tax flexibility: Can be taxed as a sole proprietorship, partnership, or S corporation.
- Simple management: Fewer formalities than corporations.
Note: In many states, healthcare providers must form a PLLC or Professional Corporation (PC) instead of a standard LLC. These entities are reserved for licensed professionals and require all owners to be properly licensed in the relevant field.
Before forming your entity, check with your state’s licensing board or consult a healthcare business attorney to confirm which structures are permitted.
Do I Need a Business License or Just My Medical License?
While your state medical, dental, or professional license allows you to practice, you’ll still need to register your business with the state and local authorities. Common requirements include:
- State business registration (for your LLC/PLLC)
- EIN (Employer Identification Number) from the IRS
- City or county business license or permit
- Zoning approval if you are operating from a commercial space
Some localities also require a Certificate of Occupancy or fire safety inspection, especially if you’re renovating space for your practice.
Should I Use My Name or a Business Name?
You may choose to operate under your own name (e.g., “John Smith, DMD”) or under a fictitious name like “Smilewell Dental.” If you choose the latter, you’ll likely need to register a DBA (Doing Business As) or Trade Name with the state.
Using a business name can make your practice more marketable and less dependent on your personal branding, which is useful if you plan to expand or bring on partners later.
What Kind of Insurance Do I Need?
At a minimum, your private practice should carry:
- Medical Malpractice Insurance: Covers patient claims of professional negligence or harm.
- General Liability Insurance: Protects against claims like slip-and-falls.
- Business Property Insurance: Covers damage to your office, equipment, or inventory.
- Cyber Liability Insurance: Protects against HIPAA violations and data breaches.
- Workers’ Compensation Insurance: Required if you have employees.
Some insurers offer bundled policies tailored specifically for healthcare practices. Consult an insurance advisor with experience in medical or dental practices to ensure you’re fully covered.
Do I Need to Worry About HIPAA Right Away?
Yes. The Health Insurance Portability and Accountability Act (HIPAA) applies the moment you handle protected health information (PHI). Key steps to take include:
- Implementing privacy and security policies
- Training staff on HIPAA compliance
- Using HIPAA-compliant software for EMRs, billing, and communication
- Signing Business Associate Agreements (BAAs) with vendors (e.g., your cloud storage provider, EHR system, or billing service)
Tip: Even solo practitioners are subject to HIPAA requirements. Noncompliance can lead to hefty fines.
What Contracts Do I Need in Place?
Contracts are critical when you’re starting your own practice. Some of the most important documents include:
1. Operating Agreement or Shareholder Agreement
Outlines ownership structure, decision-making authority, profit distribution, and exit strategies.
2. Employment Agreements
For any team members you hire, including office managers, assistants, or other providers. These should cover:
- Job duties and expectations
- Compensation
- Non-solicitation and non-compete clauses (as allowed by state law)
- Intellectual property provisions (e.g., patient materials or systems developed in-house)
3. Independent Contractor Agreements
If you’re bringing in outside providers on a contract basis (e.g., massage therapists or part-time MDs), these agreements clarify scope and liability boundaries.
4. Patient Intake Forms
Should include informed consent, HIPAA acknowledgment, financial responsibility, and cancellation/no-show policies.
5. Vendor Contracts
Ensure you have clear agreements in place with billing services, IT providers, office equipment lessors, and other vendors.
Should I Join Insurance Panels or Stay Private Pay?
This is a strategic question and varies by profession and location. Consider:
- Joining Insurance Panels can boost volume and visibility but requires credentialing and comes with lower reimbursement rates.
- Private Pay / Cash-Based Models offer simplicity and flexibility, but may limit access to clients who can’t afford out-of-pocket care.
Hybrid models are increasingly popular, especially for mental health providers. You may accept insurance for basic services and offer premium services on a cash basis.
What If I’m Renting Office Space?
If you’re leasing space for your private practice, carefully review the commercial lease agreement. Consider these factors:
- Term and renewal options
- Modification and build-out allowances
- Who pays for improvements or repairs
- Exclusivity clauses (preventing competitors from renting in the same building)
- Compliance with medical regulations (e.g., ADA accessibility, HIPAA privacy)
Always have a real estate attorney or business attorney review your lease before signing.
What About Billing and Collections?
This is one of the most overlooked operational areas when launching a private practice. Decide early whether you will:
- Handle billing in-house using a certified biller and EHR system
- Outsource to a medical billing company
- Use EHR-integrated services with automated claim submission
Be sure to factor in coding accuracy, claims follow-up, and denials management. Timely collections are essential to keeping your practice financially healthy.
Do I Need a Website and Online Presence?
Absolutely. Today’s patients research providers online before making a decision. A good web presence should include:
- A professional website with services, location, and credentials
- Online scheduling and contact forms
- Verified listings on Google Business, Healthgrades, and Zocdoc
- A secure email or patient portal
- HIPAA-compliant contact forms and messaging
How Can I Protect My Brand?
You should strongly consider registering a federal trademark for your practice name, logo, or slogan if they’re unique. This gives you:
- Nationwide brand protection
- Legal tools to stop copycats or confusingly similar names
- Stronger marketing and SEO visibility
A trademark attorney can help conduct a conflict search, file your application, and enforce your rights as your practice grows.
Final Thoughts: Start Strong with a Legal Foundation
Starting a private practice means stepping into the role of healthcare provider and business owner. To protect your license, brand, assets, and peace of mind, it’s essential to lay the right legal groundwork from the beginning.
From entity formation and contract drafting to HIPAA compliance and trademark protection, early, strategic decisions can help you avoid costly setbacks and position your practice for long-term success.
At Daniel Ross & Associates LLC, we work with healthcare professionals like you to build legally sound, scalable practices. If you’re preparing to launch or want to strengthen the foundation you’ve already built, schedule a consultation with us today.
