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, about 300- 600 new centers are 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:
Question 1:
Where should I avoid starting an urgent care center 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 business, 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 an urgent care center. 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 significantly impact their operational structure and long-term expenses.
Question 2:
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.
Your location’s visibility 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 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.
Question 3:
What do I need to know and prepare for when applying for funding?
Finding the perfect spot to start your urgent care business 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 when starting an urgent care. 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 have to 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 lines 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.
Question 3:
What do I need to know and prepare for when applying for funding?
Finding the perfect spot to start your urgent care business 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 when starting an urgent care. 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 have to 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 lines 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.
Question 4:
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 upkeep 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, which is vital to your success when starting an urgent care center.
Question 5:
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.
Question 6:
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 process of starting an urgent care. 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.
Question 7:
How does contracting and credentialing affect my go-live date?
Contracting and credentialing undoubtedly affect the go-live date. In certain areas, it can take eight months or longer 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. You also 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. Starting an urgent care center 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.
Question 8:
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.
Question 9:
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.
Question 10:
What resources are available and should I be seeking them out before opening?
It’s absolutely necessary to find the proper resources before opening an urgent care. 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 and 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 for credential providers, and provide information to help you set your fee schedule.
A trustworthy financial advisor — an accountant or reliable funding resource — is needed to help gather necessary financial documents, determine the best corporate structure for the urgent care business, 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.
Want more great tips on how to start an urgent care? Download the eBook:
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