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If there’s one thing to be said about the urgent care industry, at this point, it’s growing faster than it ever has. Right now is the opportune time to break into the industry and start an urgent care clinic. Based on the Urgent Care Association of America’s data, there are about 300- 600 new centers being opened annually and there’s no indication that the growth rate will slow anytime soon. So if you’re in the market to open an urgent care clinic—look no further. We have just the resource for you.
Here are ten questions to ask before starting an urgent care clinic:
Where should I avoid starting my urgent care and why?
A lot of people will start by thinking about where they should start their urgent care. It is equally as important that you know where not to start one.
There are a handful of cities and states around the country considered to have “saturated” urgent care markets. Florida is fast becoming one of those states. The Sunshine State was an early adopter in the urgent care market, which explains why the competition has gotten so stiff in recent years. Metropolitan areas such as Ft. Lauderdale, Jacksonville, and Orlando have been eaten up by large, branded chains. Florida also gets low marks for reimbursement rates. This has been an ongoing issue with the state for years. Even if one is successful in landing a payer contract, the resulting rate is most likely lower than average.
Having closed networks from prominent payers—AETNA, HUMANA, BCBS, and UHS—hurts the industry. All four companies will make doing business in Florida hard. The payers will not answer calls or offer up contracts to new businesses that provide urgent care services.
When breaking into the urgent care industry, search elsewhere as you will get more bang for your buck in a different state.
There are also other states that are less attractive for starting urgent cares. Anything from lease costs, difficulty negotiating in-network status, state regulation, and well-branded centers saturating the market.
Don’t forget that it is harder for non- physician owners because of Corporate Practice of Medicine (CPOM) laws.
According to Health Lawyers, the CPM doctrine generally prohibits a business corporation from practicing medicine or employing a physician to provide professional medical services.
This is an issue non-physician owners will have to consider during the initial stages as they look for a location to call home—as it will have a significant impact on their operational structure and long-term expenses.
What are some key identifiers to watch for when looking for a location?
Finding the perfect spot for your urgent care clinic will not happen overnight. It takes time and energy to find the most strategic location. There are no telltale signs or lists. However, there are a few key identifiers to watch for when looking for a site.
The visibility of your location is a big deal. Sure, the building may be visible to customers at this moment in time, but will those same conditions ring true a year or even five years from now? Are developers planning on expanding in front or adjacent to your site? Will large trees bloom in front of your center? Are traffic patterns subject to change based on growth? These are all good, relevant questions that need to be asked when searching or selecting a location.
Another key identifier is signage. Right away, it will be crucial to figure out if there are limitations to size, color, and display type regarding a sign. Obtaining a permit is something else to think about when it comes to putting up a sign. The requirements vary by municipality, but the last thing you want is to get slapped with is a hefty fine before you open the doors to your brand new clinic. So, in short, always check local laws prior to placing signage.
You also need to know who your competition is and where their locations are. Finding out what sets you apart from them will help you market to the strengths of your center and inform the public of why they should choose you over the competition.
Parking and zoning sounds like a straightforward topic, yet that is not always the case. Things to consider when thinking about parking and zoning: Is the land zoned appropriately for medical use? Are there designated parking spots available for patients and clinical staff?
Parking, especially in bigger cities, can dictate the patient flow. If your parking lot is not big enough to facilitate the number of patients your facility can handle, patients may go to the clinic down the street when your parking lot is full.
What do I need to know and prepare for when applying for funding?
Finding the perfect spot for your urgent care clinic will not happen overnight. It takes time and energy to find the most strategic location. There are no telltale signs or lists. However, there are a few key identifiers to watch for when looking for a site.
Funding is a big undertaking. There are a lot of moving parts with a lot of minute details that you have to know before you apply for funding. The first thing to be aware of is Small Business Administration (SBA) loans do not fund 100 percent of your need. SBAs only cover a certain percentage. Meaning, you’re responsible for coming up with whatever amount the SBA loan doesn’t cover. On average, you will have to contribute up to 20 percent of the total funding for the project.
For the SBA to even review your application, there haveto be three-to-four years of tax history, a personal financial statement, a business plan, and financial projections for the clinic. Keep in mind, SBA loans look at the creditworthiness of the entire household—even if the spouse is not a part of the business.
Many traditional line of credit loans, such as physician practice loans, do not fully cover project funding or allow for operational cash once the center is open. A separate business line of credit may have to be opened.
Do I want the biggest clinic space I can get?
Bigger isn’t always better. No matter how many times we hear it in America, we should know this phrase does not always apply—especially when opening an urgent care center.
Why? Because increased space does not equal increased patient visits. Larger areas add up to bigger build-outs and higher long-term expenses. Bigger build- outs quickly drive up costs with longer labor hours and an increase in materials, while higher long-term expenses include the furnishing of the entire property and the future up keep that comes with having more square footage. The number one thing that initially drives patients to your clinic is visibility and convenience. What keeps them coming back is efficiency and excellent customer service.
If I am watching my build-out costs, does the contractor I use matter?
Without question, the contractor matters. An experienced urgent care contractor has the ability to save you thousands in expenses just by helping you avoid poor design and material choices. Additionally, they should understand radiology needs, installation of diagnostics, and be able to help properly coordinate the delivery of capital equipment. That way it’s there and ready for the go-live date. It’s important that the contractor understands storage and service offerings, too. That way they can assist in setting up adequate and proper storage solutions like shelves, hangers, cabinets, and counter heights.
If this doesn’t happen, it will be up to you to coordinate this post opening—the last thing you want to worry about after the doors are open.
When and why should I consider the selection of my EMR/RCM provider?
Selecting your EMR/RCM provider should happen as soon as you sign your lease. Choosing a provider at signing ensures your clinic will be in-network by the time your center opens its doors. Most EMRs coordinate and offer RCM and credentialing services that tie into the contract as well.
EMR implementation and RCM setup (with fee schedules) needs to be organized early on in the start-up process. Assistance can be provided— so you can appropriately plan for contingencies—should there be any issues with go-live or contracting and credentialing services.
As far as the training of staff and users goes, it can be arranged during a slower period. The same applies to the customization of the EMR. Both tasks should be done weeks before the launch—that way you do not find yourself doing them last minute.
As you can probably tell by now, you will have bigger fish to fry leading up to the go-live date.
How does contracting and credentialing affect my go-live date?
Contracting and credentialing undoubtedly have an effect on the go-live date. At times, it can take eight months or longer in certain areas to thoroughly complete the setup of contracting and credentialing services. It’s critical to get it set up sooner rather than later considering you want to be in-network with all major payers. On top of that, you want to have contracts and fee schedules ready to go.
A delay in contracting and credentialing services would hurt your clinic’s bottom line. If not in-network, there wouldn’t be any incoming reimbursements from payers. Opening without being in- network also means a plan has to be implemented to manage patients who have insurance plans that likely won’t be covered.
A question to ponder if that day comes for your center, “How will I handle the patients who have complaints after they are seen and receive their explanation of benefits (EOB)?” Unfortunately, non- credentialed providers are as bad as not having a contract. Non-credentialed providers cause delays and a reduction in reimbursement.
It’s easy to see why it’s important to get your EMR, RCM, and contracting and credentialing services squared away as soon as the lease is signed. All three can affect the go-live date and so much more.
How should I go about determining my go-live date?
The best way to determine the go-live date is to look at when the majority or largest commercial payer (typically BCBS) is fully contracted, the fee schedule’s loaded, and providers are credentialed. What commonly happens is operators feel the pressure to open the clinic once rent is due and the build- out is complete. They believe rent is more of a threat to expenses than all the operational costs combined.
When should I recruit providers? What do I need to know before I start recruiting?
It is in your best interest to start the recruitment process at least two-to- three months before the go-live date. Credentialing can be a lengthy process, and a non-credentialed practitioner will not have claims reimbursed promptly. When recruiting, some providers may have to apply for a license and DEA reciprocation if they plan on moving to your area. Applying for a license and DEA reciprocation can increase the time for bringing providers on board and delay the contracting and credentialing process.
Furthermore, most providers will have to give a significant amount of notice to their current employer if they intend on leaving. In some markets, especially rural ones, it may be harder to find the type or level of practitioner desired. It is not outside the realm of possibility that you may have to resort to hiring a recruiter or think of other strategies—which could increase the amount of time it takes to find and hire the right provider.
What resources are available and should I be seeking them out before opening?
It’s absolutely necessary to find the proper resources before opening. The best resource out there is an urgent care consultant. Urgent care consultants can guide you every step of the way. They can also coordinate resources, vendors, answer questions, and provide best practice information. An experienced contracting and credentialing team is a close second.
It is this team’s job to coordinate contracting with major payers, collect all needed information to credential providers, and provide information to help you set your fee schedule.
A trustworthy financial advisor— accountant or reliable funding resource—is needed to help gather necessary financial documents, determine the best corporate structure for the clinic, counsel on the lease, advise the purchase, and help analyze and plan cash flow once your urgent care is open.
Even though it was covered earlier in the article, an urgent care EMR/PM/ RCM vendor is worth mentioning again. The best type of vendor focuses on its client’s success. They put all their resources toward the go-live date. In addition, it’s important to them that they are well prepared, deliver on time, and continuously deliver after opening day. Improving your operations through technological advances, training, and enhancing your revenue is their focus.
Lastly, seek out successful urgent care owners—network, share ideas, and tap into what worked well for them.
6 Mistakes to Avoid When Starting an Urgent Care
According to the Urgent Care Association of America, there are approximately 9,000 urgent care clinics in the United States — growing at a rate of over 300 centers per year nationally.1 The growth trend isn’t slowing any time soon. Urgent care clinics, from single sites to franchises and large organizations, will continue to expand as the aging Baby Boomer population floods the healthcare market in need of episodic or acute care services.
In addition, the Affordable Health Care Act, often referred to as Obamacare, went into effect in 2014, creating the need for more healthcare providers as
30 million uninsured people become insured. The Association of American Medical Colleges estimates by 2020 the United States will face a serious shortage of both primary care and specialty care physicians — at 91,500 fewer doctors than needed for the population.
These factors have contributed to venture capitalists, hospitals, individual physicians, and even insurance companies rushing to open their own urgent cares.
While the opportunity is a golden one for business, opening an urgent care requires due diligence in upfront planning for long-term success.
Before opening your urgent care clinic, we recommend avoiding these classic missteps.
Not Planning Ahead or Having the Correct Expertise
While it may seem obvious, many clinics say that starting an urgent care takes advance planning (at least a year or more) and requires personnel knowledge in both business and healthcare.
Often, clinic owners have expertise in one of these two areas. To give a balanced approach, adding a partner or hiring experienced consultants can help counter areas of inexperience.
A proforma is required for loan financing, but outlined business and marketing plans are essential, especially in the first years of operation. Experienced clinics advise that you should be prepared to run at a loss (insurance reimbursements can take months)—and to have working capital to get you through the early stages of business.
Hiring the correct employees that fit your clinic’s mission will help prevent time-consuming rehiring.
In addition, careful selection of staffing models is recommended as hiring choices determine when a clinic will turn a profit.
Human resource requirements, payroll, employee training programs, and policy and procedures are all vital areas a new clinic should be prepared to research and understand. To help guide new clinics, the Urgent Care Association of America offers a Policy and Procedure Manual with sample templates, so clinic administrators don’t have to write documentation from scratch.
Bottom line: Start with experience in both business and healthcare, have a business plan, and take time to hire the correct personnel and consultants.
Underestimating Build-out Time & Choosing the Wrong Open Date
While it may seem obvious, many clinics say that starting an urgent care takes advance planning (at least a year or more) and requires personnel knowledge in both business and healthcare. Often, clinic owners have expertise in one of these two areas.
To give a balanced approach, adding a partner or hiring experienced consultants can help counter areas of inexperience. A common oversight is underestimating the time it takes to open clinic doors. Using an existing building or leasing a space can cut down on construction time, but going with an existing building often limits space and lacks customized room layouts.
Consider carefully which building solution type is right for your clinic. Don’t overlook having your building set- up to comply with zoning, building, and health regulations. Ensure your building contractor has considered building codes during the layout configuration stage so your clinic passes inspection.
Having a detailed timeline will help you meet milestones and open on time. Include some flexibility in your build out schedule for unexpected setbacks, like delays in building construction, hiring employees, and obtaining contracts with payers.
When advertising, be vague about the opening date, such as saying “coming soon”, until closer to ribbon cutting time. You may want to consider a soft grand opening in the beginning, until your clinic is up and running smoothly.
It’s important to research patient volume for your clinic’s location for the chosen month of your opening — both for correct staffing amounts and revenue streams. Opening during a slow time of year can potentially bankrupt your clinic, but opening before the busy season can give your clinic a chance to streamline operations. In the beginning, hiring fewer or part-time staff and cross-training them can be a prudent move until patient volumes increase.
Bottom line: Choose your building carefully, have an opening schedule, and research the best month to open.
Not Choosing the Correct Location
Land and building price are often the determining factor when choosing your clinic’s location. However, the mistake of not reviewing nearby competition can be detrimental to your patient volume. Consider current clinics already in your area before choosing a spot. Existing clinics recommend being at least five miles from the nearest competitor. Also consider ease of access via major roadways — in addition to the proximity to residential and commercial areas.
Because of the reliance on consistent walk-ins, most urgent cares are located in high traffic areas, such as on busy roads, local malls, or nearby (sometimes even inside of) retail locations or pharmacies. Corner locations can be desirable as it allows your clinic to be seen by traffic from multiple directions. Remember to think outside your local community, too. Would you get more patients in a nearby city or town that has less healthcare options? Do your research first before picking your place.
Bottom line: Research local competition, think about traffic volume, and consider nearby communities or suburbs.
Not Starting Insurance Contracts & Credentialing Soon Enough
While an urgent care clinic may mainly operate with physician assistants, medical assistants, or nurse practitioners, at least one licensed physician is needed on staff.
Not only do physicians need their medical license to practice, it is also necessary to have insurance credentialing for physicians. Credentialing is the process of having a physician affiliated with major insurance companies in your area so your clinic can accept third-party reimbursement.
Physician credentialing allows clinics to receive steady payments; it also means physicians can see more patients, as physicians will be in-network or preferred providers for insurance companies.
Credentialing procedures vary from payer to payer, so decide which insurance companies you’ll participate with and start the process as soon as possible.
Once you’re credentialed, begin setting up contracts with the major insurance companies in your area.
Starting the contracting process ahead of time (generally six months before opening) helps ensure you have rates and discounts agreed upon before you receive patients. Front desk collections will be an important piece to your clinic’s overall reimbursement. Having a fee for service (FFS) or cash payment schedule in advance will allow the front desk staff to collect the appropriate amount before the patient is seen.
If your clinic is unsure on how to do credentialing and contracting correctly, hiring consultants with experience in this area is advisable. To ensure legal compliance, it’s also recommended that you examine state laws for both physicians and your clinic office so you meet all regulations.
Bottom line: Make sure physicians have insurance credentialing, negotiate contracts with payers well in advance, and verify you have the correct licenses to operate in your state and clinic location.
Not Having a Billing Process Defined
For all the effort put into building a clinic, finding staff, and advertising, one important step often forgot is the clinic’s billing process. Whether you do billing and claims processing yourself or a third-party company handles it, who does your billing is a crucial decision to the success of your urgent care.
Billing controls your revenue stream, so it’s important to have timely reimbursements from payers (preferably in 90 days or less). Delays from payers or frequent mistakes in claim submissions can significantly impact your bottom line.
Start-up clinics often use revenue cycle management (RCM) providers so clinic staff can focus directly on patient care. When choosing an RCM company, look for one that has experience in the urgent care industry and offers a clear package or listing of what billing services it will provide. Services like taking patient phone calls and offering transparent billing data can save your clinic time and streamline management processes.
For clinics that choose to do billing “in- house”, a best practice is to hire dedicated billers and certified coders who can review claim submissions for accuracy and ensure proof of timely filing. This will save time and reduce back-and-forth claim rejections from clearinghouses. As clinic management, having access to accounts receivable is crucial as it allows you to see outstanding accounts—and where issues are occurring.
Bottom line: Determine a billing process before opening, consider using a third- party billing company, and have access to accounting figures.
Not Having a Website or Clear Outdoor Signage
Have a clinic name picked out and your marketing budget set? Now, how are you going to reach your patient base? The best way to advertise 24/7 is to have your own website. Think of it as a permanent advertisement and information source for your clinic, available to anyone with an Internet connection.
With patient-centric healthcare becoming the norm, your clinic needs to meet web- savvy patients where they are—online.Not only does a well-designed, user-friendly website help give your clinic credibility, it also creates a good first impression and builds an online presence.
In 2012, Manhattan Research conducted a survey of 5,210 adults who use the Internet as a health resource. Fifty-four percent of respondents said they did online research to decide what services they might need and who should provide them. On your website, your clinic can post services offered, physician info, hours, contact info, directions to your clinic, and patient resources. Adding social media channels that link back to your website can help grow visits.
Website promotions and helpful content such as a blog with health tips can also improve SEO traffic to your website. However, it’s important to maintain up- to-date copy on your blog and social media to ensure you’re providing beneficial, timely info to patients.
Registering with local online business directories and with urgent care directories is also recommended. Free tools like Google Analytics can help you track website performance.
Ensure your website is listed on all your print marketing items—like brochures, t-shirts, and fliers. If possible, add a tracking question, like “How did you hear about us?”, to your patient form.
Physical signage is a given for a new clinic to attract patients. So you’d be surprised how many clinics don’t focus on creating legible, easy-to-view signs. Signs should not only be on the front of your building but also on marquees or in highly visible places within your parking lot. Ensure text is large and in a readable font. If the name of your clinic might not include the phrase “urgent care”, this should be added so your clinic clearly communicates your offerings.
Bottom line: Create a website, offer valuable patient information online, and design clear, visible signage for your clinic.
Opening an urgent care can be a profitable venture, if you avoid common mistakes. While you can prepare to the best of your ability on your own, nothing is more valuable than speaking with those who have actually been involved in opening an urgent care. Current urgent care clinic owners, physicians, or healthcare vendors who are willing to share with you are excellent resources for learning. Hiring long-term consultants, either business-related or health care- oriented, can also be beneficial for this purpose while planning. Reviewing the industry itself and becoming familiar with existing clinics, typical service offerings, vendors, and support resources is helpful —not only in your local area, but also on a national scale.
The urgent care industry offers many opportunities for growth. But with all advice considered, it’s important to remember that a clinic is a service- oriented business. Thus, the quality and speed of service offered is what helps determine a clinic’s longevity. With the right plan and team in place, you can open a successful urgent care clinic that provides patients with efficient, recommendable healthcare services.
To the following interview participants who graciously gave expert advice to be included in this ebook:
Disclaimer: The below urgent care clinics are clients of DocuTAP and were not compensated for their contributions.
To-do Checklist for Opening an Urgent Care
Opening an urgent care is an endeavor that requires diligent upfront planning. To help you prepare, it’s recommended you have business professionals, along with medical personnel, on your team. Business professionals can help with operational and legal needs, while medical personnel will bring valuable clinical knowledge to your practice. Both staff types are recommended for a complete approach to make sure you’re ready when your doors open.
The timeline for planning a new urgent care should be at least one year in advance of open date. Planning in advance will ensure you have all your paperwork and legal needs covered—so you’re not scrambling later with revenue problems, lack of correct documentation, or inadequately trained staff. The to- do items in this checklist are what you should focus on four months prior to open date.
To ensure you are ready when you open your urgent care, review these important to-do items and check them off your list as you complete them.
Suggested Timeline for Opening an Urgent Care
Consider if you will sell retail medication: