This article is an overview of some of the logistical, legal, financial and practical aspects of setting up practice as a licensed naturopathic doctor. However, this is not a comprehensive or in-depth guide, and many aspects of practice vary from area to area.
“What does it take to set up a practice as a naturopathic doctor (ND)?” is a urgent question for many prospective students. Of course everyone’s vision of a practice differs. Some have visions of breezy wellness spaces surrounded by lovingly tended herb gardens. Others may picture busy multi-room offices with front desk staff and medical assistants. Whatever the vision, it’s not always as easy to find out this information as it is for conventional medical students. As the vast majority of NDs are independent practitioners, not employees, it’s important for prospective students to know ahead of time that once graduated they will likely need to set up a clinic or office space, or rent a practice space from someone else. While costs vary, it is not cheap.
As I write, COVID-19 is changing the practice landscape for all professions. Telehealth has become the new norm for patient visits – as of now. Crowded waiting rooms are no longer desirable. However, in-person visits are not going to disappear; in-patient visits are still necessary for some conditions and treatments. So you will still need to have access to a practice space. If seeing patients via virtual visit, you must have a space that does not have others passing by, where your screen can be viewed, or where you can be overheard.
Costs Are Higher For Anything Aimed at Healthcare
When looking many services for healthcare practices are geared towards much larger clinics. Solo providers are rare nowadays, and even clinics of less than a dozen people are considered small. It can be a challenge to find services that work with smaller practices at times. Also, be aware that services aimed at anyone with “doctor” in the title are pricey.
Malpractice Insurance
Yes, you can be sued. While historically NDs weren’t sued as often as MDs, the number of complaints filed against NDs is increasing. Yes, this may be because there are more NDs. However, anecdotally I have heard that as NDs become the main doctor for more patients, they are facing increasing expectations for how they deliver care. At any rate, complaints are increasing and so are malpractice rates.
Malpractice insurance costs vary, policies vary, and it is a complex field. Some insurers offer much cheaper rates, but usually as a trade for covering fewer patients or therapies & procedures. Good policies cover what you are likely to be doing in a typical general practice. In general, good policies will probably run north of $2500 a year, even if you are not engaging in riskier therapies such as prolotherapy, working with medical cannabis recommendations, or therapies involved in aesthetics. If you add on midwifery (which requires additional training), you should expect it to be much higher – probably multiples of that amount.
Be aware that malpractice coverage can require paying for what is known as “tail” coverage: e.g. when you one day leave practice, you will have to pay a sum to provide coverage for some years afterwards in case a complaint is filed after you quit practice.This can be several thousand dollars, due all at once.
Do not practice without malpractice insurance, which is sometimes referred to as “practicing bare”. You hope you will never need it, but when you do need it, it’s too late to get it. It’s also required to participate in insurance (see below).
Insurance
Note to Canadian readers: I’m aware that it’s very different in Canada. My understanding is that supplementary policies for private insurance often cover naturopathic care, but I do not know how the application process works for Canada. Note to US readers: insurance varies from area to area, state to state, insurer to insurer, plan to plan… and year to year.
If you are in an area where NDs are covered by insurance in any form, you will probably want to credential with insurance companies. This process will take about 3 months. It can be longer. Some insurers have a limit on how many NDs (or acpuncturist, etc.) that they will allow in a certain area and if an insurance is popular you may not be able to be credentialed right away. In some areas, and for some insurers, you will be asked to credential through a third-party that handles complementary and alternative medicine providers (CAM) such as NDs, acupuncturists, chiropractors, etc.
Why would you want to be credentialed with insurance? I can’t cover the cash practice vs insurance debate in depth in this article, but here are reasons why you would want to strongly consider participating:
- People who have insurance usually want to use it. Deductibles are often higher for out-of-network providers, and costs for out-of-network providers do not apply to the in-network deductible Thus even those on a high-deductible plan may prefer to see in-network providers. For the vast majority of people who are not wealthy, this can make a difference between whether or not they can see you.
- While people are uninsured for a variety of reasons, two common ones are lacking the money to pay for insurance, and/or believing they do not need it. The former group typically cannot afford frequent full-price visits for medical care. The latter often are younger and/or don’t get sick often. They may also be on a very tight budget as well. You will hear direct primary care mentioned, but it still requires patients to pay for the direct primary plan plus a catastrophic insurance plan.
- Some insurers limit the ability of out-of-network providers to refer the patient for specialty care. Some plans may refuse to pay for tests and imaging that are ordered by an out-of-network provider, or even count them towards the deductible. This can make for sticky situations when you have a patient who needs timely lab work or imaging done, and you can’t order the tests. You will need to send them back to their provider at that moment.
- Consider that one of the goals of many state naturopathic associations is to open up insurance participation to their members. That alone should tell you that it’s desirable.
Taking insurance does come with downsides. It takes time to bill all the different payers, resubmit claims that are denied, preauthorize tests and procedures and medications, and keep up with the varying rules and regulation on what is covered. I have seen official, insurer-issued hundred-page PDFs discussing how to bill for a yearly preventive care visit, I kid you not. However, taking insurance both makes it possible for people to see you who could not otherwise do so, and makes it more likely that people will come to see you.
Practice space
This varies, wildly, in both type and cost. Some naturopathic grads refurbish a run-down space, putting in the work themselves, others find a spot in a medical office complex. The cozy room in a vintage Victorian is probably a trope, but so is the unassuming strip mall storefront. There are a few commonalities, however, such as that you will need a sink in the office and you will want hard flooring in the exam room.[1] You will also want a waiting area.
Speaking of bathrooms: look for a space that can offer a gender-neutral option if possible. Additionally, evaluate whether or not patients will be able to unobtrusively walk a container of urine back from the bathroom to the exam room.
Beyond those commonalities, practice spaces divide up into:
Rented exam rooms in a practice space shared with other healthcare providers, usually CAM providers such as massage therapists, acupuncturists, other NDs, counselors. These may have a shared waiting room, wifi and some other amenities. Pricier rentals may have a receptionist, but often not. These rooms may or may not be furnished or have supplies. If they are furnished, you will probably be time-sharing: you get the room on Mondays and Wednesdays, others use it the rest of the week. You will probably do your own billing, check patients in and out, etc. You will probably need your own phone number, electronic fax number, EHR, etc.
While the owner may also be an ND and practice in the space, this is not a clinic. There is no coordination between providers and few or no central services provided. These rooms should rent for a flat fee – e.g. so many dollars to use the room one day per week, each week of the month.
Clinics that essentially rent you a room in exchange for varying reimbursement arrangements, typically tied to how many patients you see. These are distinguished from the shared practice spaces in that the owner(s) – usually an ND, but maybe another CAM provider – more or less directs the clinic and is involved in day to day operations.These groups also are apt to have contracts that may involve non-compete agreements (heads up: In Washington state these are now heavily restricted unless you are being paid a fairly high salary.) You should consult a healthcare lawyer who specializes in these arrangements before signing.
A warning about rental arrangements
While not as common as they once were, some clinics still charge the renter a percentage of what the provider receives for patient visits, with the ND who sees the patient turning over a share of what they receive to the clinic owner. As these clinics often refer patients to the renting ND, these arrangements have a strong likelihood of violating federal and state anti-kickback laws, no matter what you will hear. Yes, the federal anti-kickback laws and Starck laws focus on federal government programs such as Medicare and Medicaid, and perhaps you don’t participate in those. But these laws are complicated, their reach is expanding, and states have their own laws. It’s possible that you could run afoul of them even if you take no insurance and are paid in cash. The safest way is for the clinic to bill the insurance for each provider, receive the payment, and then pay the provider after deducting a portion for expenses. Or else, have the renter pay a flat fee per month for the use of the room.
While NDs do employ other NDs, it is still not the most common arrangement. See below.
Solo practice spaces: in this situation you have to find the space, negotiate the lease, often have it built-out or remodeled for your practice, furnish and set it up yourself. This option can cost you tens of thousands of dollars up front, depending on how big it is and how you outfit it. A variant is to have a group go in on a largish space together. Get good contracts and negotiate what to do if someone needs to leave ahead of the contract end, even if these are dear friends who would never let you down. Life happens.
There are a few hardy souls that only perform home visits, or who have their office in their own home. Check regulations in your jurisdiction before hanging your shingle up on your side entrance. Even if you own your own home, some areas prohibit home businesses that require patients to visit your home in-person.
ADA compliance Medical spaces should be accessible to the disabled, period. You would be surprised at how many potential offices are not. This will require widened doorways, enough room to maneuver a wheelchair, and some skillful furniture arrangement.
Entrepreneur vs employee
Per the 2020 AANMC ND graduate survey, the vast majority of naturopathic doctors in the US and Canada are self-employed in at least one of their jobs (most naturopathic doctors have more than one job/position/income source). Something like 2/3 are in their own private practice. Confusingly, 2/3 are also in group practice. When it comes to actually seeing patients, most NDs are self-employed. Even when they practice in a “group practice”, many if not most naturopathic doctors are technically independent contractors, not employees.
There are some employee positions, with numerous variations on payment arrangements. When you see advertisements that exclaim “We are growing and ready to add a new ND to our clinic!”, check to see what the financial arrangements are. If it’s anything other than a flat rental fee or a standard employment arrangement (clinic owner withholds taxes & Social Security and you do not pay any money to the owner for use of the space), then it’s unlikely to be an employer-employee relationship. The laws here are complicated, and the law does not care if you are an ND or MD in this case. Consult a lawyer who specializes in healthcare law.
HIPAA (Healthcare Insurance Portability and Accountability Act) and EHRs
Why am I mentioning government regulations in an article on setting up a practice? These are the regulations that govern patient privacy, and they will impact every aspect of your operations, from where and how you store paper files to how you secure a fax machine, where you place your computer screen, and how you dispose of papers and computers – and that is only a beginning. Together with the 2013 HITECH OMNIBUS final rule, HIPAA is the reason why some clinics will email you and others won’t use anything but a fax, physical mail, and phone. HIPAA is complicated and complying with it takes time and an increasingly sophisticated level of technological knowledge. If you don’t have that knowledge, you will need to find someone with it.
Things change in the land of HIPAA and technology. Do not use a technology mentioned below without first ensuring that it is both capable of being made HIPAA-compliant and that you know how to use it in a HIPAA-compliant way.
HIPAA also means that you cannot use many popular consumer or business services in several aspects of your practice; you cannot, for instance, use popular online accounting software unless it meets certain stringent criteria. The same goes for online booking software, voice over IP services, or those apps that let you add a second number to your smartphone without setting up another line and a second SIM card. You cannot use the free consumer-level Google Voice for your office, for instance, though you can use the Google Voice that comes with a paid Google Suites for Work account (as long as you have Google Sign a business associate agreement and set up the account with certain security precautions. Regular Skype is not HIPAA compliant.
Business-level services vary in how much they can be made HIPAA-compliant: Google Suites for Work can be made HIPAA compliant, for instance, but it’s unclear about all aspects of Microsoft Office 365 Online. (If you are hosting your own Sharepoint server on-premises it is apparently a different story, but chances are good you will not be doing that).
HIPAA regulations are somewhat nebulous when it comes to granular details about what, exactly, constitutes sufficient electronic security. It also specifies fairly heavy fines for breaches, and it does not matter if the breach is due to the electronic service provider’s error or the healthcare provider. The healthcare practitioner can also get fined, and will be. This has led most practices to err on the side of caution and simply avoid any technology that could possibly subject them to fines. Hence, the popularity of the fax, which got a pass as being supposedly relative secure.
EHR, Telehealth, Phone, Fax, Email, Computer
You will need a fax. Despite the proliferation of EHRs and new technologies, a fax is still necessary in healthcare. In addition to HIPAA (as mentioned above), most of the EHRs are not inter-operable and can’t talk to each other. Email is still regarded warily for a variety of reasons. Hence, faxes. Due to the need to physically secure physical fax machines, you will probably want to get a HIPAA-compliant online fax. These are not the popular consumer-level fax services.
Printers: You can’t place them in a location where others can read the printouts (e.g. freestanding in a waiting room). If you have the type of printer or copier that stores copies on its hard drive, you will need to clear, decommission, or destroy the hard drive before disposing of the printer.
Phones: There are landlines. There are regular cell phones, which will need to be secured and encrypted. You can use your smartphone, but will need to secure it more than you would otherwise! When a patient calls you on your smartphone, their number is protected health information and falls under HIPAA security rules. So does their voicemail. If your smartphone transcribes voicemails, there are headache-inducing questions about whether or not the data leaves your phone/is anonymized/does Google or Apple need a business associate agreement, etc. Rule of thumb: do not enable voice mail transcription, and make sure that lock screen call notifications do not show the name and phone number on your lock screen. There are a few voice over IP (VoIP) phone services that are HIPAA compliant. Skype is not HIPAA compliant. I’ll save the electronic advice for another article.
Email: Even if you route all your patient messaging through the EHR, you should get an email that can be made HIPAA compliant. Fortunately this is easier to get than it used to be. EHRs have a way of sending email notifications that contain patient info, and some patients will want to communicate that way. Do not use a consumer level account. You will need a business level account and some security configuration. Do not, by the way, buy into offers that bundle a specialized marketing service or appointment service that will offer you email. Keep it separate.
Computer While you will do your best to not have patient information ever hit your hard drive, this can’t always be avoided. Scanning into your EHR from the printer, downloading a file from your electronic fax, or filling out the electronic PDF explaining why your patient should not be switched from their long-standing asthma medication just because the insurance formulary changed: these are likely to require that you actually have patient info on your computer drive, at least transiently. So the computer needs to be secured. As a few examples of what is needed, the computer must be encrypted, password protected, not left unattended, not used by others. You will have to turn off features that could send sensitive information elsewhere (e.g. Windows 10 Full Diagnostics), and you will not use helpful voice assistants or searches that process your request through the cloud. This is not a comprehensive list on how to secure your computer. That would take numerous pages, and there are entire books, websites, and consulting agencies devoted to HIPAA security.
Telehealth Once again, consumer-level services will not work for this. Again, any virtual meeting service needs to be able to be made HIPAA compliant and you must be able to have the service vendor sign a BAA. Some EHRs come with this, in other cases you may need to use a separate service. This is becoming easier to find and set up without spending vast amounts of money.
Taking payments, invoicing, and billing.
You will take checks, cash and cards. Traditionally providers got merchant services with clunky machines and keypads, but newer electronic payment providers are used by many small providers now. Contactless payments (Apple Pay, Google Pay, and others) are increasingly popular. Be aware that services that are acceptable per HIPAA for taking in-person payments are not always acceptable for invoicing or taking online payments. There are healthcare-specific solutions, some built into EHRs, some free-standing. These are also usually more expensive than the non-healthcare solutions.
Billing insurance
If you take insurance, you’ll need what is called a “payment clearinghouse”. You send them the claims for insurance, the clearinghouse sends it to the insurer, and eventually payment finds its way to you. These folks are free (to you), except in New York state or if you see more than 50% Medicaid or Medicare patients per month. You can also bill the insurers directly, but that increases the work. Sometimes you will still have to do so. Most of this is electronic nowadays (some insurers no longer take paper claims, with rare exceptions).
Until you see a certain number of patients per month, it’s often not financially feasible to send your billing to someone else, and many NDs do their own billing.
What about the rest?
There are other items I haven’t covered. For instance, in-office lab supplies. Commercial labs give you the kits for their tests, but tests that are performed and read during the visit, such as urine dip sticks and rapid-strep tests, must be purchased out of pocket. These all have shelf lives, by the way, shorter than you might think. There are in-office medical supplies, advertising, a supply of magazines for patients to leaf through, chairs that can hold people who weigh more than 200 lbs (you’d be surprised how many chairs have a weight limit of 220 lbs), printers, lighting, exam table, medical equipment, storage, decor that can withstand active toddlers….
Summary
In addition to the money you borrow for your education, you will need to borrow or find the money to set up a practice space, in addition to having the money to support yourself while you build a practice. This can be a significant barrier barrier for new grads. If considering becoming a naturopathic doctor, realize that this can mean borrowing 20,000 to 70,000 dollars or more – on top of student loans for the education.
Be aware that setting up a naturopathic practice is no different than setting up a conventional medical practice in terms of costs and legal obligations. This will hold true even if you decide to practice in an unlicensed state.
[1] I mention this because an amazing number of practice spaces I looked at, that were advertised as supposedly for healthcare, had no sink in the space. I would end up pointedly telling them that yes, I could wear gloves, but I needed to wash my hands. A lot. The folks who were leasing out these spaces were not, for the record, my fellow NDs.