Avoid These 10 Costly Mistakes When Launching Your Medical practice start-up services

Starting a medical practice is an exciting yet challenging endeavor. While there’s plenty of advice on what to do, it’s equally important to know what to avoid. Many new practices fail due to preventable mistakes that can create long-term financial and operational setbacks. Utilizing comprehensive practice start-up services can also help in avoiding these mistakes. Below are 10 of the most common pitfalls to avoid when launching your medical practice.

Mistake 1: Underestimating the Time Required for Credentialing and Contracting

One of the biggest mistakes new practices make is failing to allocate enough time for credentialing and payer contracting. The process typically takes 4-6 months, and even then, some payers may lag behind. Opening your doors without being in-network with key insurance providers means turning away potential patients and losing revenue. Additionally, EDI/ERA/EFT enrollment (often handled by your billing company) can take another 2-3 weeks to complete.

Be wary of credentialing services that promise completion in 30-90 days—these claims are often misleading. Many companies outsource credentialing overseas, compromising accuracy and security. Utilizing practice start-up services such as those from Credex Healthcare ensures your practice is set up for success.

Mistake 2: Failing to Incorporate Your Business

Operating as a sole proprietorship under your Social Security Number (SSN) can lead to serious tax and liability issues. Instead, form an LLC, PLLC, PC, or S-Corp and obtain an EIN from the IRS. Filing as an S-Corp can help you save thousands in taxes. Also, keeping business and personal finances separate and co-mingling funds can lead to financial and legal complications. Comprehensive practice start-up services often include assistance with incorporation and tax planning.

Mistake 3: Using a Personal Cell Phone for Business

It may seem convenient to use your personal phone when starting out, but once that number is registered with payers, it will become publicly accessible. Changing it later can take 30-90 days for updates to take effect with insurance companies. Instead, secure a VOIP or digital business number that can be forwarded to your cell until your office line is set up. Practice start-up services can also guide you in setting up efficient communication systems.

Mistake 4: Improper Staffing During the First 6 Months

Many practices are either overstaffed or understaffed in their initial months. Understaffing leads to missed calls and poor patient experience, while overstaffing creates unnecessary financial strain. Hire versatile employees who can handle multiple roles, and consider an overflow answering service to ensure all patient inquiries are addressed promptly. Proper practice start-up services can help you determine the optimal staffing levels for your new practice.

Mistake 5: Neglecting Proper Bookkeeping and Accounting

Waiting until tax season to hire a bookkeeper and accountant is a costly mistake. Without proper financial oversight, you may:

• Miss out on tax deductions.
• Fail to document personal investments in the business.
• Overlook quarterly tax payments, leading to penalties.

Set up bookkeeping from day one to maintain a clear financial picture and avoid running your business blindly. Practice start-up services can provide ongoing bookkeeping support and financial guidance.

Mistake 6: Signing Long-Term Contracts Too Soon

Avoid committing to long-term leases or service contracts without thoroughly vetting vendors. Even for essential services, try to negotiate probationary periods or out-clauses to ensure flexibility as your practice grows. Practice start-up services can assist with contract negotiations and vendor selection.

Mistake 7: Choosing the Wrong EHR System

Selecting the cheapest Electronic Health Record (EHR) system can lead to inefficiencies, affecting patient care and revenue. Consider factors like ease of use, support, referral management, eRX, and billing integration. Switching EHRs later is far more difficult and expensive than selecting the right one from the start. Engaging with practice start-up services can help you choose the EHR system best suited for your needs.

Mistake 8: Overspending on Non-Essentials

Many new practices splurge on state-of-the-art technology or hire high-salaried employees without calculating Return on Investment (ROI). While quality matters, focus your initial budget on high-impact essentials rather than luxury purchases that won’t generate immediate revenue. Practice start-up services can provide guidance on making cost-effective investments for your practice.

Mistake 9: Underspending on Essential Services

While overspending is a concern, underinvesting in critical areas—like credentialing, billing, payroll, and IT infrastructure can lead to inefficiencies and financial losses. Choose reliable vendors that offer scalable services to support your growth. Utilizing practice start-up services can help you allocate your budget effectively to essential services.

Mistake 10: Failing to Create a Budget

Without a clear budget, your practice is operating more like a hobby than a business. Whether you’re overly optimistic or hesitant to plan, a well-structured budget is essential for:

• Managing operational costs.
• Avoiding financial missteps.
• Ensuring long-term profitability.

Final Thoughts

Avoiding these common mistakes can save your medical practice from unnecessary stress, delays, and financial losses. If you’re starting a practice and need expert guidance with credentialing, contracting, or compliance, Credex Healthcare is here to help. Utilizing practice start-up services can be the key to your success.

📞 Contact us today to ensure your practice is set up for long-term success!