What to do if you're already contracted but starting a new private practice

Maybe you’ve been working in a clinical or outpatient setting for a number of years and you’re ready to branch out on your own with a private practice. Exciting! ... and probably at least a little bit confusing. We're here to help.

What to do if you're already contracted but starting a new private practice

If you’re currently working or recently worked in a setting that took insurance, you have an individual, or Type I, NPI. This is the unique number that identifies you as an individual health care provider. Your NPI is linked to the health care setting in question, and more specifically, it's linked to each contract that the setting has with various health insurance companies.

That contract, in turn, is associated with a specific business entity (i.e. the clinic or another facility in which you work or worked), which is identified by its Employer Identification Number, or tax ID.

This is the business entity that will receive the reimbursement when claims are filed.

For you to be part of that clinic’s contracts, you were credentialed and then linked to the contracts (and tax ID) in question. Here’s the clincher: when you decide to take insurance as a private practitioner, insurance companies will start the credentialing, or re-credentialing, and contracting process for you from the very beginning.

You’re probably asking yourself, “Why should I have to go through the whole process again if I’ve already been credentialed successfully with company X?” Insurance companies do this to vet your qualifications thoroughly and to ensure you are still a valid health care professional. They also need to draw up a brand new contract for your practice — identified by your business tax ID — that specifies the kind of services you’re permitted to render and bill for.

It's worth noting that your type I NPI will stay with you as part of that new contract, and can actually also remain an active part of an existing contract with, say, your current clinic employer. This does mean that there can be overlap with the two contracts, and in fact, your NPI can be linked to multiple contracts, whether that’s a temporary overlap as you’re transitioning fully into your private practice or an ongoing arrangement where you continue to work in one place and maintain a private practice on the side.

Unfortunately, there are no shortcuts when it comes to credentialing, re-credentialing, and contracting with insurance companies, but it helps to understand the logic behind their processes and requirements. And of course, we’re here to help if you decide not to go it alone!