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Starting an Advanced Practice Provider Practice

Client Alert
May 13, 2024

Advanced practice providers (APPs), which includes non-physician providers such as nurse practitioners, physician assistants, and nurse anesthetists, commonly start their own healthcare practices. Practices may provide, for example, service offerings such as primary care, anesthesiology, mental health, and aesthetics (medical spas). However, there are a number of considerations and steps that must be taken for APPs to compliantly function independently.

First and foremost, the state where the APP will be operating their practice dictates whether an APP can even open a practice independently. Key considerations include the following:

  1. State Scope of Practice Laws: Can the provider practice independently in the state, or is another provider, such as a physician required to be on-site? Are the services within the APP’s scope of practice, as dictated by state law? For example, in Ohio, nurse practitioners are required to have a standard care arrangement with a collaborating physician and must practice in accordance with their education, clinical experience, and national certification. CRNAs, for example, may be required to practice under their RN license if they wish to provide aesthetic services.
  2. State Corporate Practice of Medicine: Can an APP operate a healthcare practice in the state, or is it limited to physicians? Other considerations here include who the APP can hire at their practice, as some states, for example, do not let providers hire providers with “higher” licenses (i.e., an APP cannot hire a physician).

Once it is determined that an APP is permitted to open an independent practice, the APP will need to file their business in accordance with applicable state filing laws, typically dictated by the applicable state’s Secretary of State. For example, the practice may need to file as a professional entity rather than a regular business corporation or limited liability company. The practice will also need an employee identification number (EIN) in order to hire employees. Additionally, with the enactment of the Corporate Transparency Act, businesses may be required to submit a Beneficial Ownership Information (BOI) Report to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).

Further, APPs should determine how they want to be paid, whether it be cash-pay, through insurance, or both. What is best for the practice will largely depend on the kinds of services being offered. If the APP determines they do want to accept insurance, they will need to complete the appropriate credentialing and application process for different payors. If the practice is a covered entity under the Health Insurance Portability and Accountability Act (HIPAA), it will also need a National Provider Identifier (NPI).

Lastly, the practice will need to obtain a site-specific Drug Enforcement Agency (DEA) registration and/or terminal distributor of dangerous drugs (TDDD) license if the APP plans to prescribe controlled substances and/or dangerous drugs (prescription medications), unless the practice meets an exception for such licensure.

If you have any questions about any of the above information,  or any other questions related to starting your own practice, please don’t hesitate to contact BMD Health Law Group Member Jeana M. Singleton at jmsingleton@bmdllc.com or 330-253-2001, or BMD Attorney Rachel Stermer at rcstermer@bmdllc.com or 330-253-2019.  

Health LawHealthcareHealthcare PolicyAdvanced Practice ProviderJeana SingletonRachel Stermer
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