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How to Start an Anesthesia Practice
Background: Anesthesia providers practice models:
The traditional models of anesthesia practice involve both CRNAs and anesthesiologists. CRNAs have more
often been employees of hospitals or of anesthesiology groups. Anesthesiologists have clustered as
members of their single specialty groups. Smaller hospitals and rural areas have relied more on CRNAs either
as an employee or as contracted professional. Larger hospitals and metropolitan areas had tended to
contract with an anesthesiology groups.
As the decentralization of surgical locations increases, these traditional practice models have be shifting as
both provider types see a different anesthesia landscape and new ways to be gainfully employed. Each
provider type has the ability to work with each other or to work independently from the other.
CRNAs have always had the ability to work independently. Working without an anesthesiologist allows
significant freedom to set up their own anesthesia practice. Many CRNAs that started a business are now
contracted with hospitals, outpatient surgery centers; offices based surgery locations, and have hired other
CRNAs to work with them. Some have even hired anesthesiologists to work for them, as well.
Anesthesiologists and CRNAs have long worked “second jobs” as a locum, either directly with a service
location, or through a locum’s company. However, the current trend is to establish an independent practice.
Anesthesiologist in private practice often contract with a smaller hospitals and surgery centers where they
will medically direct the facility employed CRNAs. Locum positions for Anesthesiologists are readily available.
A growing subspecialty area is pain management. Anesthesiologists are usually the provider type to develop
this private practice.
Anesthesia Business climate:
The anesthesia business is in a demand stage. Insurance payors remit more to surgeons for their procedures
in an outpatient or office based setting. The move began with plastic surgery and was followed by
gastroenterology (GI) and ophthalmology (cataract) procedures. There are many single specialty surgery
centers now operating in every state. Pain management practices are growing rapidly and most require
sedation services. Free standing vascular centers and Cathlabs are also in the mix. The surgeon/specialist are
the initiating factor by moving procedures from hospitals to surgery centers, single specialty centers and
increasingly to the office based settings. All of these areas require anesthesia services. This trend will never
be reversed, and will likely increase because of price competition, medical technology and improved drugs.
Patient demand is also a consideration as patients prefer quicker, closer, less expensive healthcare access.
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Your mindset to begin an anesthesia practice:
First consider, do I want to work full time or part time? Do I want Call or no call, travel or no travel? How
much do I want to earn? How hard am I willing to work? What professional risk am I making? What financial
risk am I taking? Where do I find opportunities? Do I have some degree of entrepreneurial spirit? These
questions are for your discernment. To get to the end, you must plan the pathway. Write down what you
want and mull over it. It will become your business “blueprint.”
Things you have and things that you will need for your business:
You have these required things already:
• A Medical or CRNA license for the state where you work, and your Board Certification or CRNA re-
certification.
• You have a National Provider Identification number (NPI).
• You may have a CAQH online provider application (your provider credentialing office will know)
• You have working experience
• You have relationships with the surgeons/specialists for whom you sedate patients.
• You have friends that may want the same things.
These things you will need:
You will need a liability/malpractice insurance that will follow you. If you are a hospital employee your
liability is covered by the hospital. If employed by an anesthesia group, your coverage is part of the group’s
coverage. To create your practice, you will need an independent liability policy.
You will need a company name and a federal tax identification number (not your SSN). This may be an LLC or
Corporation. The new company LLC or Corp will protect you by separating your work risks from your
personal assets. You will use this tax name and number for your business. All insurance payments will be
made to this entity. You should open a bank account in the company’s name/tax number. All monies and
expenses will be channeled through you company bank account. It is recommended that you talk with an
attorney and /or accountant regarding how to best form your company. There is paper work for its
establishment and the lawyer/accountant will guide you through the process of local and county business
licenses that will be required. The IRS form SS-4, Employer Identification Number, can be filled out online.
You will need a full service medical billing and collections company, to establish and manage your revenue
cycle.
Also, you must become aware of business opportunities that will arise in your community.
Medical Billing and Collection Services:
Anesthesia billing and collection is quite different than other medical billing. It is different because
anesthesia has its own set of CPT codes, it regularly counts in “time units,” it has modifiers for patient acuity,
for age, and modifiers to reflect the provider types administering and/or directing anesthesia. Therefore,
select an “anesthesia” billing service that uses anesthesia billing software. Ask for references and their depth
of experience.
Select a full service anesthesia billing service. Full service means they have provider credentialing along with
the revenue cycle development and accounts receivable management. They will have an assertive focus on
insurance and guarantor follow-up for payments. Full service means, they take care of you and your new
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practice. They provide more hands-on service to ensure that your revenue cycle remains in good balance.
Managing the accounts receivable enhances your cash flow. The service should have a planned approach to
follow-up on unpaid insurance claims. Patient payments make up about 15% of your cash flow. Patients owe
their copay and deductible amounts. Full service includes sending statements, collection phone calls, and
online patient payment capabilities.
Because billing services are in competition with each other, ask for their guidance. For example, call one up
and say “I have an opportunity to work exclusively for three GI physicians in their office. Do you handle small
start-up anesthesia practices?” Most will give you good understanding of billing processes and answer your
questions, but know they want your business. Remember you are “fishing” for information so give them
some bait.
Finding the Opportunity:
Having good relationships with the surgeons/specialist is helpful. Let them know that you are looking for
additional part-time anesthesia work. Talk to co-workers or friends who have an ongoing practice. Keep
track of healthcare facilities under construction in your area particularly surgery centers, and physician
office buildings. When surgeons change their work relationships with each other, their practice pattern may
change to more decentralized locations. Make it your business to know and learn what is going on with all of
the physician specialties that use sedation services, i.e. surgery, cosmetic, gastroenterology, ophthalmology,
vascular, Cath lab, and pain management. Do your marketing homework and understand your market area.
This is called networking. Just do it!
Selling Yourself:
Prepare an outline of how you will “sell” yourself to a potential opportunity. You are selling a “service,”
your “professional service,” as well as, your personal integrity and trustworthiness. Be prepared to discuss
your abilities, desires, flexibility, and dedication. You should write a one page narrative of how you will sell
yourself. Remember it is “not written in stone,” and the result is “the process” that will best fit your
personality and passion.
Contracting and the agreement
Prepare a contractual agreement for a three year period that binds each party to a mutually beneficial
working relationship. You can find examples online or consider the use of an attorney. Keep you contract
simple.
The business side of a medical practice:
You now have a company name, tax number and bank account that are in place. Now consider that a
medical office practice has a staff of employees to handle patient scheduling, registration, reception, clinical
care assistants, bookkeeping/payables/payroll, provider credentialing, medical coding, billing and
collections. The term “practice management” includes all of these activities.
The anesthesia practice you will develop does not need nonclinical employees or the activities of scheduling
registration, reception, or clinical assistants. The practice you develop will need provider credentialing,
medical coding, billing and collections (unless you are developing an office based pain management
practice). These activities are easily outsourced to a medical billing service at a reasonable fee. These billing
activities are complex but handled smoothly with a reliable billing service.
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Provider credentialing is the first and most important requirement to get your practice started. You must be
credentialed with insurance payors, under your NEW tax number in order to submit medical claims. The
equation is simple, “credentialed = authorization to be paid = cash flow.” A special note here is important.
The time line for credentialing Medicare, Medicaid and some commercial payors is 90 to 150 days. In a start-
up medical practice it is urgent to get the credentialing process started as quickly as possible before you
sedate your first patient. Remember that delayed credentialing delays cash flow.
Your practice revenue cycle begins when the claim(s) are sent to the billing service. Where claims are coded,
demographics and charges are entered into the billing software, where claims are filed with payors, and
where explanation-of-benefits are received (payments are directly deposited to your bank account). The
billing service will post payments to individual accounts, send patient statements, and follow-up on no-pay,
slow-pay claims until account balances go to zero. Each patient’s claim goes through this revenue cycle
process.
From the bookkeeping/payables/payroll side of your business, you will write checks for business expenses,
payments to yourself, to 1099 contracted CRNAs, for liability insurance, to the billing service, and for other
payables you may have. An accounting software is recommended. Also, you may choose to use an
accountant or spouse to help with payables.
The clinical side of your business:
The clinical side includes all things medical that pertain to providing healthcare services. Your professional
service is to anesthetize patients from pain and to bring them back to their normal consciousness. This
process includes medical record documentation of the services provided. Inclusive to clinical are the drugs,
equipment, syringes and various other supplies, required to facilitate your services. Normally, the facility
supplies, the drugs, equipment, and space. Your contractual agreement should contain clear language about
the purchase and provision of drugs, equipment, and supplies.
Putting it all together:
In actual practice, the “build-your-own-anesthesia-business” concept is not all that difficult. I say this with
ease because we’ve helped multiple anesthesia providers get started. The basic steps are to secure a tax
number; consult with a nurturing anesthesia medical billing service; and identify your opportunities. A
lawyer or accountant can advise on your practice organizational type. The lawyer can help with contract
issues. An accountant can help with the payables and income taxes. The billing service will develop your
revenue cycle, which will generate your cash-flow.
You are the owner, and you are the president; therefore, you are the leader to take charge and build your
practice.
FOR ADDITIONAL INFORMATION contact:
Joe Gribbin, Jr
Medical Business Management
joegribbin@mbmps.com
www.MBMPS.com
205-979-5882 x 103
