Considerations for Establishing a Private Practice in Audiology and/or Speech-Language Pathology

Section I. Initial Considerations

1. Research before the practice is initiated (1–11)

   1. Market potential (12–13)

      1. Specify who constitutes your market.

      2. Check the following as well as other sources to determine the number of people who fit your specifications: Census Bureau Data, Chamber of Commerce, Department of Education, Senior Citizens Lists, etc.

      3. Specify exactly the geographic area you intend to serve and where you intend to open your practice. Define by zip codes or by specific streets.

      4. Determine potential payment/funding sources for your market.

      5. Determine already existing competing services.

      6. Be as specific as you can be.

   2. Referral sources

      1. List all possible types of referral sources that apply to your potential market. Be sure to consider all possible sources such as chiropractors, psychologists, social workers, and so forth.

      2. Check Yellow Pages, professional directories, hospital medical staff directories, clinic directories. (While doing this, check for potential competition.)

      3. Determine whether you have an already established referral base and/or are willing to make the necessary contacts.

   3. Location (14–18)

      1. Consider your patient population. What are their needs for parking, traffic flow, special ambulatory needs? What will make it easy and convenient for your patients to find you?

      2. Consider what other types of rehabilitative or habilitative services are available in this area.

      3. Consider the options for space that are compatible with your practice and determine the actual costs of having your practice there versus the benefits of accessibility, referral sources, need for modification of space to suit your needs and meet government requirements, and your cost for getting into the space. Consult with a real estate attorney for all leases.

      4. Examine the adequacy and the length of the lease in relationship to your plans for future growth.

      5. Determine whether you can really afford this space or whether there are less costly options (e.g., subleasing part of an office in the same building).

   4. Financing (19–51)

      1. Prepare a list of ALL equipment and materials including paper and pencil supplies that you need to open and operate your practice for the next 6 months.

      2. Get actual prices of all equipment and materials. Secure written quotes and negotiate price for expensive equipment. Be sure to include shipping and transportation charges. Consider extended warranty maintenance contracts. Evaluate lease versus purchase.

      3. Determine total costs of rent or mortgages, utilities, maintenance including cleaning, repairs, furnishings, snow removal, lawn care, etc.

      4. Determine necessary personnel and consultants including other professionals, support staff, accountant, attorney. Establish whether consultant fees will be on a fixed retainer or as-needed basis. Estimate start-up and annual cost of consultant services. Consider the relative advantages of using consultant services of a young and growing firm versus an established firm.

      5. Budget for advertising and public relations including yellow pages, newspapers, local events, business cards, announcements, open house, etc.

      6. Prepare your business plan which tells what services and products you intend to offer and your income projections for the next 3–5 years.

      7. Determine exactly what your own financial resources are. Be conservative!

      8. Talk to an accountant about how much money you will need and how much you should consider borrowing.

      9. Discuss with your accountant the potential sources of financing and who to contact.

      10. Call for an appointment with several finance sources and find one that meets your needs and who seems interested in your proposal.

      11. When you have found a potential finance source that is willing to work for you, submit all paperwork including your business plan.

   5. Services to be provided

      1. List all services and products you intend to offer that fall within your professional expertise. Consider specialized services such as forensic and expert witness services, consulting, lecturing, and workshops.

      2. List other services that you may be able to offer with additional continuing education.

      3. From the above lists, cross out the services that are impractical.

      4. Go back to the section on Market Potential and determine if there is still a market for what you want to do.

   6. Personal characteristics (52)

      1. Ask yourself, your family or significant others pointed questions about the feasibility:

         1. Do you have the necessary experience?

         2. Do you have an established reputation?

         3. Are you a good clinician?

         4. Do you like what you do?

         5. Are you willing and able to work more hours for a few years to get established?

         6. Are you up for a challenge?

         7. Are you willing to learn what you don't know?

         8. Can you afford to go without any income for a period of time?

         9. Why do you want to do this?

         10. Will your family support you in this endeavor? For how long?

         11. How do you handle stress? What mechanisms do you use to reduce stress?

         12. Do you have a strong self-image?

         13. Do you have a network or support system to rely on?

2. Choosing the legal form of the practice

   1. General considerations (53)

      1. Discuss with an attorney who specializes in small businesses.

      2. Discuss with an accountant who specializes in small businesses.

      3. Check with your county clerk and your state licensing board.

   2. Specific considerations (54–62)

      1. Determine legal forms of practice available in the state (e.g., corporation, partnership, sole proprietorship).

      2. Determine tax obligations.

      3. Compare financial advantages of different forms of practice.

      4. Consider federal, state, and local laws and legal liabilities.

      5. Compare employer/employee benefits of different forms of practice.

3. Preparing the paperwork to initiate the practice

   1. State, county, city licenses

      1. Contact your state licensing board, secretary of state, or Department of Revenue, County Clerk as needed.

      2. Your attorney can advise you about the forms you will need and may prepare them if requested.

   2. Legal contracts for provision of services

      1. Discuss all contracts with your attorney. Develop an outline of what you want to include in all contracts before going to the attorney.

   3. Billing forms, insurance forms, letterhead stationery, business cards

   4. Bookkeeping and record keeping

      1. Discuss billing forms, bookkeeping, and record keeping with your accountant.

      2. Discuss tax issues with your accountant to determine the applications which must be filed and what taxes must be paid and when. Be sure to include estimated tax payment in your business plan.

   5. Marketing materials

      1. Contact ASHA, other professional organizations, and vendors regarding marketing materials and plans available to you.

      2. If you can afford it, contact a marketing firm in your community to discuss a marketing plan.

      3. Contact the Small Business Association and Better Business Bureau.

Return to Top

Section II. Laws, Regulations, Certifications, Licenses

1. Professional

   1. Federal

      1. Contact the Governmental Affairs Division at ASHA and subscribe to ASHA's Governmental Affairs Review to receive up-to-date information about federal and state regulations and legislation.

   2. State

      1. Most states require a license to practice speech-language pathology or audiology. Contact your state speech-language-hearing association for more information.

      2. Audiologists who plan to dispense hearing aids may, in some states, have to additionally be licensed as a hearing aid dealer.

      3. ASHA can also provide information about which states require licensure for practice and for hearing aid dispensing.

   3. Local

      1. An occupational license may be required at your city or county level in order to operate a business. Check with your local government.

   4. ASHA

      1. In addition to the Certificate of Clinical Competence, ASHA's Professional Services Board (PSB) accredits professional service agencies on a voluntary basis. Contact ASHA for information and procedures regarding PSB certification.

   5. Other professional groups

      1. There may be other professional groups that you want to join. Examples include the American Auditory Society, American Academy of Private Practice in Speech Pathology and Audiology, National Hearing Aid Society, American Academy of Audiology, Academy of Dispensing Audiologists, National Association of Rehabilitation Agencies, etc. Some of these may have specific requirements for your own credentials or for your practice. You will need to check with the particular organization.

2. Business–legal (63–65)

   1. Business name

      1. Contact an accountant and/or attorney with knowledge of business organization to determine if there are restrictions on your choice of name.

      2. Contact your secretary of state to determine procedures for determining an acceptable name and establishing it legally.

   2. Federal, state, local taxes

      1. Investigate corporate taxes, property taxes, employer taxes, employee taxes.

      2. Contact an accountant, CPA or tax attorney.

      3. Contact the Small Business Association.

      4. Obtain the following publication: Information for Business Taxpayers, Internal Revenue Service (1983), IRS #583 Rev. Ed.

      5. Contact state and local tax commissions.

   3. Workers compensation

      1. Specific insurance is required to cover possible job-related injury to employees. Contact your state's Worker's Compensation Agency.

   4. Federal Employer Identification Number (66)

      1. EIN is a 9-digit number issued by the IRS which will remain the same even if your business relocates to another IRS district. To file, use Form SS-4 (see IRS Pub. 583).

   5. Social Security Number

      1. Contact your local Social Security office.

   6. Sales Tax Number

      1. Contact your local comptroller, state treasurer, secretary of state, or county clerk for information.

   7. Zoning laws

      1. Contact the local Chamber of Commerce, Zoning Commission and/or reliable realtors.

   8. Provider status requirements

      1. Obtain provider numbers necessary for Medicare, Medicaid, and other third party payors if you choose to participate.

      2. Contact state government organizations and officials responsible for establishing guidelines and requirements for Medicare, Medicaid, or other programs. This may include the Health Department, Welfare Department, Medicaid, etc. depending on your state.

      3. Contact your local intermediary for Medicare information.

      4. Subscribe to ASHA Governmental Affairs Review for up-to-date information about federal reimbursement programs.

      5. Contact insurance companies, HMOs, and PPOs for their requirements.

   9. Contractual agreements

      1. Outline what you want to include in all contractual agreements and take this to an attorney who specializes in small businesses.

Return to Top

Section III. Specialized Professional Services

1. Forensic and expert witness services (67–70)

   1. Contact attorneys who specialize in malpractice and personal injury cases to advise them of your area of specialty. Be prepared to provide a vita and other documentation of your qualifications for legal cases in your area of specialization.

   2. Read texts on serving as an expert witness and discuss with your colleagues who have served in this capacity.

2. Consulting

   1. Secure ASHA materials on consulting.

   2. Discuss with an attorney regarding your legal responsibilities and limitations in your state.

Return to Top

Section IV. Dispensing Professional Products

1. Incorporating product sales into services (71–79)

   1. Determining products to dispense

      1. List all products that are compatible with your scope of practice.

      2. Decide which, if any, of the above products you want to dispense in your practice.

      3. Decide how these products will fit into your overall business plan.

      4. Consider developing your own materials for sale (e.g., therapy materials, software, tapes).

   2. Obtaining manufacturers' products

      1. Secure wholesale price lists from manufacturers.

      2. Consider alternative sources for purchase (co-op buying, multiline wholesalers).

      3. Negotiate prices.

      4. Consider advantages and disadvantages of bulk buying.

   3. Pricing

      1. Develop a retail price based on cost-accounting principles and market conditions.

      2. Consider bundled versus unbundled price structure.

      3. Be sure to consider all services related to dispensing of a product as part of the total clinical program when determining product price.

      4. Review ASHA Code of Ethics section on dispensing products.

      5. Consider cost of different warranty options.

      6. Establish a trial/evaluation/return policy that is consistent with state laws and incorporate it into the price structure.

   4. Repairs and warranties

      1. Consider your ongoing obligation to the purchaser.

      2. Consider the need for extended warranty/ maintenance contracts.

      3. Determine the extent of in-house repair capability.

      4. Consider laws regarding warranty obligations within your state.

   5. Laws and taxes

      1. Determine if any special licenses or tax laws apply for the products you plan to sell.

      2. Contact the Department of Revenue or Taxation in your statement and your state licensing or professional association.

Return to Top

Section V. Business Management

1. Insurance (80–82)

   1. Employee

      1. Worker's compensation is a mandatory requirement for employees. Contact the State Insurance Commissioner's office and/or a local insurance company representative for information regarding legal responsibilities and policy coverage and costs.

      2. Unemployment insurance is a federal and state requirement. Check the regulations in your state.

      3. Health insurance is an important consideration for employees. Contact local insurance companies for competitive coverage. Health insurance is also available through ASHA.

      4. Check if policies you may want to purchase provide coverage of Speech-Language Pathology and Audiology services.

   2. Practice

      1. Contact state professional association or ASHA for information regarding malpractice and personal liability insurance.

      2. Contact local insurance broker for information about liability, property, and equipment insurance.

   3. Owner

      1. Type of coverage may be affected by type of ownership, (i.e., sole proprietor, corporation, or other legal entity). This can be clarified by an insurance underwriter representative.

      2. Owner may wish to investigate advantages of disability and/or retirement insurance as well.

   4. Office and contents

      1. Contact local insurance underwriter representative for information.

   5. Professional liability

      1. The owner and all employees should have professional liability insurance. Contact ASHA or a local underwriter representative for information. You may wish to secure more than one estimate for all insurance coverage.

2. Public relations/marketing (83–97)

   1. Scope

      1. Public relations involves everything from a marketing plan and specific advertising to maintaining appropriate professional contacts with referral sources.

   2. Development

      1. Consult ASHA's marketing materials and staff.

      2. Determine the total cost and consider cost benefit.

      3. Consider co-op models with manufacturers and with colleagues.

      4. Consider the timing for marketing.

   3. Implementation

      1. Adhere to your plan long enough to judge its effectiveness.

      2. Monitor the plan regularly and revise as necessary.

   4. Ethical issues

      1. Consult the ASHA Code of Ethics and Issues in Ethics statements.

3. Cost analysis/fee setting

   1. Determining costs

      1. Consider direct and indirect expenses.

      2. Consider operational and capital budgets

      3. Consider amortization of equipment

   2. Determining fees

      1. Assign costs to individual service units by determining the expected number of service units per week or month.

      2. Determine your expected profit margin.

      3. Compare resulting fee structure to usual and customary fees of similar professionals in the community.

      4. Be aware of anti-trust laws that prohibit price fixing.

4. Documentation of services/accountability

   1. Documentation internal use

      1. Develop internal standards for documentation prior to designing a system.

      2. Plan a system with which you can record all professional contacts with your patients, professional colleagues, and referral sources. This should be a dated and sequential summary of any items discussed. It must be written and should be signed or initialed by the person making the entry.

      3. Develop a system to document client progress (e.g., initial baselines, progress, status at discharge).

      4. Consider the need to communicate among clinicians, with other disciplines, and with client and family.

      5. Consider the needs for follow-up months or years later, possible future research, agency publications.

      6. Consider legal responsibilities.

      7. Develop a procedure for storing closed files.

      8. Establish a quality assurance program. Contact ASHA for guidelines.

   2. Documentation for third-party purchasers and contractual arrangements

      1. Determine a priori exactly what records must be kept to satisfy your potential third party agencies, insurance companies, or contracted facilities.

      2. Determine how these records can be kept in the most expeditious manner. Use standard forms whenever possible to save time and insure continuity.

      3. Determine where these records are to be kept and who will be responsible for maintenance of all records.

      4. Determine the exact record keeping needs and procedures for each agency and be prepared to complete additional and/or different records for each.

      5. Know the regulations for providing services in your contracted settings so that you are prepared to establish appropriate record keeping procedures if none are in place.

      6. Contact the fiscal intermediary consultants for information about preparation of paperwork for Medicare and Medicaid. Contact private insurance companies for information about their requirements.

      7. Keep records that will show that you have followed necessary protocols or timelines.

      8. Prepare a statement for clients on insurance policies and procedures.

   3. Documentation for public relations and interprofessional relationships

      1. Determine how patient confidentiality is to be maintained in all records.

      2. If any records are to be used for public relation activities, determine how they will be used, if that use will be consistent with your professional Code of Ethics, and what purpose their use may serve to expand or better advertise your practice.

      3. With appropriate patient permission, keep referral sources advised of services to referred patients.

      4. Assure that reports sent to referral sources look professional, are easy to read, provide the information that the reader needs, and include your name and how to contact you.

5. Accounting and legal procedures (98–103)

   1. Selection of an accountant

      1. Choose an accountant who is familiar with small service-oriented businesses.

      2. Consider the relative advantages of using the services of a firm that is young and growing versus an established firm.

   2. Office procedures

      1. Accounting can be done by hand, by any number of computer software programs or by contracted services.

   3. Tax reporting

      1. Consult your accountant to make sure all types of taxes are paid on time.

   4. Selection of an attorney

      1. Choose an attorney who is familiar with small service-oriented businesses.

      2. Consider the relative advantages of using the services of a firm that is young and growing versus an established firm.

6. Billing

   1. Collection management

      1. Decide whether you will ask clients to pay when services are provided, bill on a monthly basis, wait for insurance payment, etc.

      2. Familiarize yourself with small claims court procedures.

   2. Record keeping

      1. Review commercially available billing programs for hand and computer record keeping as well as the services of businesses that manage billing for a fee.

7. Third party reimbursement (104–106)

   1. General considerations

      1. If you choose to participate in third-party programs, be aware that most have eligibility criteria for participating providers, procedures for becoming an authorized provider, procedures for authorizing services, predetermined payment schedules, specific forms and paperwork requirements, varying delays in reimbursement, and the right to audit financial, personnel, and patient records.

   2. Federal, state, local government agencies

      1. Both federal and state insurance programs may be administered by a state office or private insurance company. HCFA contracts with fiscal intermediaries for Medicare programs. Medicaid is a federal program, but funds are administered through state governments. Contact your state Health Department or other intermediary for information.

      2. The fiscal intermediary is the final authority for Medicare/insurance coverage. Most have consultants for specific services (i.e., SLP, Aud.). Contact these consultants for atypical situations.

      3. Other government programs include CHAMPUS, CHAP, Bureau of Vocational Rehabilitation, Crippled Children's Services, local Children's Protective Services.

   3. Private insurance

      1. Contact your state professional association insurance committee or task force for information.

      2. Contact ASHA for information about the Insurance Consultants Network.

      3. Contact an individual insurance company to determine coverage. Call when possible to determine company policies; then be prepared to submit a letter of medical necessity to support coverage.

      4. Contact state insurance commissioner for state regulations regarding private insurers.

   4. Health maintenance organizations

      1. These health care service payers contract directly with service providers in most cases. Contact the HMO or PPO to determine eligibility and procedures for becoming a provider. Ask about restrictions on services and fees.

   5. Home health care

      1. These state-licensed agencies provide in-home services to patients. They may contract for speech-language-audiology services.

   6. Appeal procedures

      1. This is the legal process for attempting to reverse a denial for reimbursement by an intermediary for services rendered.

      2. Refer to the following for information: HCFA Provider Reimbursement Manual provided by Medicare intermediary, ASHA Health Insurance Manual, Governmental Affairs Review, NARA.

      3. Contact intermediary consultant, insurance company, or state insurance watchdog organization.

8. Ethics

   1. ASHA code

      1. Contact ASHA or see Asha journal.

   2. State Association and/or licensure code

      1. Contact state association.

      2. Contact state licensing board.

   3. Adherence to the code.

      1. Participate in active enforcement and interpretation of the Code of Ethics and licensure laws.

      2. Comply with nondiscriminatory policies.

      3. Be aware of social trends that would affect ethics.

9. Interprofessional relationships

   1. Other health and education professionals

      1. Become knowledgeable about the roles and kinds of services provided by other health and education professionals: physical therapy, occupational therapy, nursing, psychology, special education, etc.

      2. Be sensitive to the politics and local practices of professional ethics and interaction among other health and education professionals.

   2. Diagnostic teams

      1. Know how to function as a team member, how to chair a team meeting, the purpose of team meetings, how to coordinate services with other team members.

10. Intraprofessional relationships

    1. Referrals

       1. Know local referral resources for cases outside of your area of expertise.

       2. Maintain good working relationships with community speech-language pathologists and audiologists.

11. Professional autonomy

    1. Responsibilities

       1. Know the appropriate diagnostic and treatment protocols for all the disorders to be treated and be able to administer them without supervision.

       2. Know the appropriate local referral resources, including other speech-language pathologists, audiologists, and other professions.

       3. Develop appropriate discharge criteria.

       4. Participate in continuing education.

       5. Maintain standards of professional and personal integrity, honesty, and reliability.

12. Employer/administrator/supervisor role (107–117)

    1. Staff

       1. A private practice may employ and/or contract for the services of other speech-language pathologists or audiologists. Contact your accountant or attorney for regulations regarding contracting versus employing staff.

       2. Determine the exact cost of hiring part-time or full- time professional staff and the number of clients necessary to support this cost.

       3. Services of a secretary, receptionist, or bookkeeper may also be needed. Make an exact list of the duties to be performed, the time required and evaluate the cost of hiring staff versus the time required to perform the duties yourself.

       4. Investigate the advantages and disadvantages of hiring staff versus an answering machine, answering service, billing, or bookkeeping service.

    2. Job descriptions

       1. Job descriptions should be written for each employee. A good job description should include a detailed description of specific duties and responsibilities.

    3. Salaries

       1. For professional staff, consult ASHA salary data for your region, determine salaries in other agencies in your community, ask applicants about their salary expectations.

       2. For support staff, compare information in the community about similar positions at other businesses.

       3. Determine whether you wish to establish salary scales for position and experience.

       4. Consult your accountant about fringe benefits.

    4. Qualifications

       1. All professional staff must meet the same requirements as you do. Consult your state licensing agency or state association for information.

       2. Make an exact list of the qualifications support staff you must have to meet your needs.

    5. Documentation

       1. Examine documentation of qualifications of prospective staff. Require vita, letters of recommendation, and proof of necessary credentials and licenses.

       2. New employees must complete W-4. Consult accountant or local IRS office. Consult Immigration and Naturalization Service for information about I-9.

       3. Consult attorney regarding employee contracts and documentation of performance.

       4. Other suggested forms of documentation include employee appraisal forms, attendance forms, disciplinary action forms.

    6. Interviewing

       1. Plan an interview that will allow you to determine the applicants qualifications, interests, experience.

       2. Provide a clear picture of your practice, expectations, and the exact duties and responsibilities of the position.

    7. Personnel and office policies

       1. Develop specific written personnel policies. Every employee should have a copy of them.

       2. Develop written office policies and assure that all employees read them.

       3. Develop written patient care policies. These policies must adhere to the requirements of accreditation agencies and third-party payors.

       4. Develop an ongoing employee evaluation system.

       5. Develop strategies for promoting staff development and staff retention.

       6. Develop dismissal procedures including specific job requirements, performance appraisal, disciplinary actions, and dismissal criteria. Consider severance pay and unemployment insurance requirements.

       7. Consult ASHA Professional Services Board (PSB) voluntary accreditation requirements for standards for clinical programs.

    8. Program/policy evaluation

       1. Develop goals for the practice and specific procedures for evaluation of attainment.

       2. Develop specific times and procedures for evaluation of adherence to policies.

       3. Evaluate adherence to patient care policies through regular patient staffings and file review.

       4. Consult PSB and other accrediting bodies (CARF, JCAH) for evaluation requirements.

    9. Contract stipulations

       1. Consult an attorney familiar with small service businesses concerning all aspects of contracts.

13. Computers (118–131)

    1. Determining the need

       1. List all possible uses that you may have for a computer. Include bookkeeping, accounting, data analysis, insurance forms, clinical uses, etc.

       2. Determine if the financial investment in a computer will save you enough time or improve your clinical services enough to justify the expense.

       3. Purchase a computer and programs only if it is financially feasible, will save you time and effort, and perhaps reduce the number of employees, or can be justified to meet anticipated growth and clinical needs.

    2. Selecting the computer and software

       1. Discuss with your accountant to find reliable sources of computers and computer programs to meet your business needs.

       2. Determine which professional programs are available to meet your uses and their costs.

       3. Preview the program prior to purchase.

       4. Consider the relative advantages of lease versus purchase.

       5. Contact ASHA for information on software instructional packages which teach about computer applications.

Return to Top

Section VI. Closing or Selling a Practice(132)

1. Getting help

   1. Role of the attorney and accountant

      1. Consult an attorney and accountant to determine the advantages and disadvantages of the many ways to close or sell a practice depending on whether it is a solo practice, partnership, corporation. Consider the following issues:

         1. Business continuation agreement

         2. Corporation stock

         3. Shareholder agreement

         4. Partnership agreement

   2. Role of the insurance consultant/financial advisor (133)

      1. Discuss preplanned retirement activation, life insurance and beneficiaries, and disability insurance with an insurance consultant when you open the practice.

      2. You will need to reexamine these issues with an insurance consultant and/or financial advisor on considering closing the practice.

2. Considerations regarding contractual agreements

   1. Sale of building and equipment

   2. Contractual obligations between leasor/leasee

   3. Timely notification of business/corporation intentions

      1. Notify employees and consultants

      2. Notify patients

      3. Notify contracting agencies

3. Laws affecting records

   1. Record storage

   2. Patient access

   3. Local, state, and federal considerations

4. Determining the price for selling the practice

   1. Selecting an appropriate consultant (accountant, business broker, colleague)

   2. Investigation of options for selling the type of practice

Bibliography