---
title: "Opening a practice"
canonical: "https://www.joinandwise.com/crossings/opening-a-practice"
checked: "2026-10-21"
claim: "andwise:crossing/opening-a-practice@2026-10-21"
license: "CC BY 4.0"
---

# Opening a practice

A new practice pays rent and loan payments before payers pay it. Medicare's enrollment and payment timing, the prior employer's non-compete, the malpractice policy type, and the months of fixed costs savings cover all decide when collections start.

**The decision:** Signing a lease, a practice loan or the first payer contracts for a new practice.

## What changes

- Medicare's manual requires its contractors to process 95% of online (PECOS) initial enrollment applications within 15 calendar days and all of them within 50 calendar days when no site visit, development or fingerprinting is needed; with any of those, 95% within 50 days and all within 85. Paper applications run 30 and 65 days, or 65 and 100. ([CMS Medicare Program Integrity Manual, ch. 10 §10.5 (Rev. 13717, issued 2026-07-08)](https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/pim83c10.pdf); checked 2026-11-03)
- A physician's Medicare billing privileges take effect on the later of the filing date of an application that is approved and the date services began at the new practice location. Services up to 30 days before that date can be billed when circumstances prevented enrolling in advance. ([42 CFR 424.520, effective date of Medicare billing privileges](https://www.ecfr.gov/current/title-42/section-424.520); [42 CFR 424.521, retrospective billing before the effective date](https://www.ecfr.gov/current/title-42/section-424.521); checked 2026-11-03)
- Medicare does not pay a clean HIPAA-compliant electronic claim before the 14th day after receipt (the 29th for paper) and pays or denies clean claims within 30 days, with interest owed after that. ([CMS Medicare Claims Processing Manual, ch. 1 §§80.2.1.1–80.2.1.2, payment ceiling and floor](https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/clm104c01.pdf); checked 2026-11-03)
- CAQH ProView, the provider profile health plans read for credentialing, asks providers to re-attest it every 120 days (180 days for providers practicing in Illinois, in the 2015 quick reference). CAQH, now operating as DataSpring, describes profiles as maintained on a 120-day attestation cycle. ([CAQH ProView provider quick reference (2015), as posted by BCBS of Illinois](https://www.bcbsil.com/docs/provider/il/network/credentialing/PR-QuickRef.pdf); [CAQH (now DataSpring), clinicians and office staff page: 120-day attestation cycle](https://www.caqh.org/providers); checked 2026-11-03)
- Some states set a deadline for health plans to credential a physician, each counted from its own starting point. Arizona: 60 calendar days to conclude credentialing, and 30 to load the physician into the billing system, after a complete application. Colorado's 2021 act: 60 calendar days after a completed application. North Carolina: 60 days after a completed application, then a temporary credential on written request if the statute's conditions are met. Iowa: a response within 56 calendar days of the request. Texas: 60 calendar days from a grant of provisional status to a physician joining a contracted physician; a physician joining a contracted medical group is paid as a participating provider while credentialing is pending. Scope and exceptions are in each statute; other states were not read. ([Ariz. Rev. Stat. §20-3453, credentialing timelines](https://www.azleg.gov/ars/20/03453.htm); [Colorado General Assembly, SB21-126 (2021), credentialing of physicians, as enacted](https://leg.colorado.gov/bills/sb21-126); [N.C. Gen. Stat. §58-3-230, uniform provider credentialing](https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_58/GS_58-3-230.html); [Iowa Code §514F.6 (2026), credentialing](https://www.legis.iowa.gov/docs/code/2026/514F.6.pdf); [Tex. Ins. Code §1457.002, provisional credentialing status](https://tcss.legis.texas.gov/resources/IN/htm/IN.1457.htm); [Tex. Ins. Code ch. 1452, subch. C, §§1452.102–1452.104, expedited credentialing](https://tcss.legis.texas.gov/resources/IN/htm/IN.1452.htm); checked 2026-11-03)
- In 30 of 51 jurisdictions, a statute voids physician non-competes or sets their limits. A prior employer's covenant can reach the place a new practice opens; each state page quotes the rule and its exceptions. ([Andwise: non-compete laws by state](https://www.joinandwise.com/contracts/noncompete); checked 2026-10-21)
- A claims-made policy covers a claim only when the incident falls on or after the retroactive (prior acts) date and the claim is first made and reported during the policy period or an extended reporting period. A claim that arrives after a claims-made policy ends needs tail or a new policy's prior-acts coverage. One carrier describes an occurrence policy as covering claims that occur while the policy is active, and a claims-made policy as covering claims that occur and are reported while it is in force. ([Curi physicians medical professional liability specimen policy, form IAMPLC01 01.2025, with endorsement ENMPL37](https://go.curi.com/hubfs/Curi%20Physicians%20Medical%20Professional%20Liability%20Specimen%20Policy.pdf); [Andwise: malpractice tail coverage costs by specialty](https://www.joinandwise.com/contracts/tail-coverage); [Healthcare Providers Service Organization, claims-made vs. occurrence](https://www.hpso.com/Resources/Coverage-Information/Claims-made-vs-occurrence); checked 2026-11-03)
- A practice owner or a 1099 contractor pays both halves of payroll tax as self-employment tax, where an employer pays half of a W-2 employee's. The equalizer sets that and the lost benefits against a W-2 salary. ([Andwise: 1099 vs. W-2 equalizer](https://www.joinandwise.com/contracts/1099-vs-w2); checked 2026-11-03)
- Not measured: Commercial health plans set their own credentialing times; some states set a deadline in statute, and otherwise each plan's policy and contract sets it. No average across plans is measured.
- Not measured: How long a new practice's collections take to reach its fixed costs. The collections-lag runway takes the lag as an entry.

## Who is paid for what

- **Medicare, through its contractor.** Medicare does not pay a clean HIPAA-compliant electronic claim before the 14th day after receipt (the 29th for paper) and pays or denies clean claims within 30 days, with interest owed after that. ([CMS Medicare Claims Processing Manual, ch. 1 §§80.2.1.1–80.2.1.2, payment ceiling and floor](https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/clm104c01.pdf)) Not part of its role: Credentialing with commercial health plans; each plan runs its own.
- **Commercial health plans.** No published source recorded yet. Not part of its role: A credentialing timeline beyond what a state statute sets; each plan's policy sets the rest.
- **Practice lender.** No published source recorded yet. Not part of its role: Advice on entity, tax or lease terms.
- **Landlord.** No published source recorded yet. Not part of its role: Advice on the lease; the landlord is the other party to it.
- **Malpractice carrier for the new practice.** Collects the premium for the policy type chosen. A claims-made policy needs tail or prior-acts coverage when it ends. ([Andwise: malpractice tail coverage costs by specialty](https://www.joinandwise.com/contracts/tail-coverage); [Curi physicians medical professional liability specimen policy, form IAMPLC01 01.2025, with endorsement ENMPL37](https://go.curi.com/hubfs/Curi%20Physicians%20Medical%20Professional%20Liability%20Specimen%20Policy.pdf)) Not part of its role: Incidents before the retroactive date, unless prior-acts coverage is bought.

## Costs that come later

- The prior employer's non-compete (at the earlier signing) → Where the new practice can open — https://www.joinandwise.com/contracts/noncompete
- Tail on the prior job's claims-made policy → The last day at the prior job — https://www.joinandwise.com/contracts/tail-coverage
- Lease and loan payments that start before enrollment → The months of fixed costs before collections start — https://www.joinandwise.com/decide/schedule#collections-lag
- Owner or 1099 pay in place of a W-2 salary → The first tax year in the practice — https://www.joinandwise.com/contracts/1099-vs-w2
- The new practice's policy type (at binding) → Leaving or closing the practice — https://www.joinandwise.com/contracts/tail-coverage

## Deadlines

- Medicare billing privileges: from the later of filing and the first day of service, with up to 30 days of retrospective billing — Set by law
- CAQH ProView re-attestation: every 120 days — Set by the program or a licensing body
- The lease and loan start dates — Set in the contract
- The prior employer's non-compete term and radius — Set in the contract

## Tools

- [Collections-lag runway](https://www.joinandwise.com/decide/schedule#collections-lag): Months of fixed costs and spending that savings cover before collections start.
- [Non-compete laws by state](https://www.joinandwise.com/contracts/noncompete): The state's rule on the prior employer's covenant, with citations.
- [1099 vs. W-2](https://www.joinandwise.com/contracts/1099-vs-w2): Owner or contractor pay against a W-2 salary, after self-employment tax.
- [Tail coverage costs](https://www.joinandwise.com/contracts/tail-coverage): What ending a claims-made policy costs, by specialty.
- [Check my contract](https://www.joinandwise.com/contracts/check): Quotes the prior contract's non-compete and tail terms.

## Questions

### Counsel

- Does the prior employer's non-compete reach the planned location, measured from which site, and for how long?
- Which lease and loan terms carry a personal guarantee?

### A CPA

- Which entity type and tax election fit the expected income and payroll, and what does each cost to set up and run?
- How are self-employment tax and estimated payments handled in the first year?

### The malpractice carrier

- Occurrence or claims-made for the new practice: what does each cost by year, and what would tail cost on closing?
- Is prior-acts coverage for the prior job available, and at what price?

### The lender

- When does repayment start, and does an interest-only period cover the months before collections?

### Each health plan

- What does credentialing require, how long has it taken for recent applicants, and from what date does payment apply?

Entity choice is a CPA's question.

## Sources

- [CMS Medicare Program Integrity Manual, ch. 10 §10.5 (Rev. 13717, issued 2026-07-08)](https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/pim83c10.pdf)
- [42 CFR 424.520, effective date of Medicare billing privileges](https://www.ecfr.gov/current/title-42/section-424.520)
- [42 CFR 424.521, retrospective billing before the effective date](https://www.ecfr.gov/current/title-42/section-424.521)
- [CMS Medicare Claims Processing Manual, ch. 1 §§80.2.1.1–80.2.1.2, payment ceiling and floor](https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/clm104c01.pdf)
- [CAQH ProView provider quick reference (2015), as posted by BCBS of Illinois](https://www.bcbsil.com/docs/provider/il/network/credentialing/PR-QuickRef.pdf)
- [CAQH (now DataSpring), clinicians and office staff page: 120-day attestation cycle](https://www.caqh.org/providers)
- [Ariz. Rev. Stat. §20-3453, credentialing timelines](https://www.azleg.gov/ars/20/03453.htm)
- [Colorado General Assembly, SB21-126 (2021), credentialing of physicians, as enacted](https://leg.colorado.gov/bills/sb21-126)
- [N.C. Gen. Stat. §58-3-230, uniform provider credentialing](https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_58/GS_58-3-230.html)
- [Iowa Code §514F.6 (2026), credentialing](https://www.legis.iowa.gov/docs/code/2026/514F.6.pdf)
- [Tex. Ins. Code §1457.002, provisional credentialing status](https://tcss.legis.texas.gov/resources/IN/htm/IN.1457.htm)
- [Tex. Ins. Code ch. 1452, subch. C, §§1452.102–1452.104, expedited credentialing](https://tcss.legis.texas.gov/resources/IN/htm/IN.1452.htm)
- [Andwise: non-compete laws by state](https://www.joinandwise.com/contracts/noncompete)
- [Curi physicians medical professional liability specimen policy, form IAMPLC01 01.2025, with endorsement ENMPL37](https://go.curi.com/hubfs/Curi%20Physicians%20Medical%20Professional%20Liability%20Specimen%20Policy.pdf)
- [Andwise: malpractice tail coverage costs by specialty](https://www.joinandwise.com/contracts/tail-coverage)
- [Healthcare Providers Service Organization, claims-made vs. occurrence](https://www.hpso.com/Resources/Coverage-Information/Claims-made-vs-occurrence)
- [Andwise: 1099 vs. W-2 equalizer](https://www.joinandwise.com/contracts/1099-vs-w2)

Reviewed 2026-11-03; oldest source check 2026-10-21. General information, not legal, tax or financial advice. The text states what the law and rules say; applying them to a contract is a question for a licensed professional.