Freshly graduated medical students and seasoned professionals may benefit from starting their own medical practice. However, several legal aspects need to be considered before making this move.

Licenses and Credentials

Most of your patients will use some form of insurance to help offset their payments. Most private insurers require that a medical practice is credentialed and has the proper licensing before reimbursing the practice for submitting claims.

The requirements for different insurance companies are unique. You first need to decide what types of insurance you want to accept. Options include Medicare, Medicaid, TRICARE, and other private insurance.

With this knowledge, you can research the credentials each insurance company requires. Credentialing is not a quick process as it can take several months to complete. Some of the documentation insurance companies may require from you include:

  • Residency
  • Medical Education
  • Proof of Malpractice Insurance

You will need to be licensed to perform medicine in the state where you want to set up your practice. The American Medical Association is an invaluable resource when going through this process.

The National Provider Identifier is a requirement for medical providers looking to accept private insurance and some government insurances. Finally, if you are going to prescribe medication, you will need to register with the DEA. From there, you will need to get certifications from the State Health Board and other state and federal agencies, depending on the type of medicine you are going to practice and the services you are going to offer.

Setting up a Business Structure

For tax purposes, you have to determine how you will legally structure your business. Your decisions will impact how taxes are handled and how much liability you will personally have if lawsuits are filed. Popular options include:

  • S-Corporations – With an S-Corp., you are going to pay taxes on your personal income from the business. This is why many medical professionals choose this option.
  • C-Corporation – With a C-Corp., a business acts as its own entity. The owner is responsible for their personal income tax and business taxes.

An attorney can walk you through the process of creating the documents needed to structure your medical practice in the best way possible. This will include articles of organization, partnership agreements, and articles of incorporation. You will need to apply for an employee identification number (EIN).


Get everything in writing. When it comes to starting your medical practice, verbal promises or statements mean nothing. Anything that you require should be written down clearly in a contract. Work with an attorney to better understand the contract terms and any obligations you have in the contract.

You should write contracts for everything, ranging from real estate to partnerships to credit agreements. If you are working with a group of professionals, make sure that you have your own lawyer review any contract before signing it. It is not prudent to rely on a group lawyer. The group lawyer has the best interests of the group in mind.

Protect Your License

You have worked hard to get your license. If something puts your licensing in jeopardy, don’t try to defend yourself. A professional license defense attorney understands the challenges you are facing and can provide unemotional, clear, and objective advice.

Allegations of misconduct or illegal activity can cause a licensing board to revoke, suspend, or deny your professional license. It could result in your medical practice closing down and your career coming to an end.

When there is a disciplinary action by the licensing board or a criminal charge, it is complicated. You may be a professional in the medical field, but addressing licensing issues is a different beast entirely. Leave that to the professionals.


Starting a medical practice can be rewarding. There are also several key legal factors you need to know to get your business started on the right foot.

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