An internist is leaving a hospital-employed group to open her own practice. The lease is signed, the EHR demo is booked, the opening date is ten weeks out, and she asks the question every new owner asks: "When can we start billing?" The honest answer is that the first clean claim usually leaves about 90 days after the legal entity exists, and only if the steps happen in the right order. Skip one, or start them all on the same day, and the doors open to a waiting room full of patients whose insurance cannot yet be billed.

We have walked enough practices through this to know where the time goes. It does not go into any single hard task. It goes into waiting: for the IRS letter to be in hand before the bank account, for the group NPI before the Medicare application, for the Medicare approval before the clearinghouse will enroll the remittance connection, for the commercial payer to finish credentialing before a contract effective date can be set. The work is a chain, and the chain is only as fast as its slowest link.

Setting up billing for a new practice takes roughly 90 days because the registrations are sequential: the legal entity and its tax identification number come first, then the organization's Type 2 NPI, then Medicare and Medicaid enrollment and the commercial credentialing applications, then the clearinghouse, electronic remittance and electronic funds transfer enrollments, and finally test claims and go-live. Medicare and Medicaid enrollment can usually be completed inside the window; commercial credentialing and contracting often cannot, and the practice should plan for an in-network gap with some payers. Below is the timeline we use, in three 30-day blocks, with a table of who owns what and what blocks it.

Days 1 to 30: build the legal and identity layer

The first month creates the identifiers everything else depends on, and most of them are fast if they are done in order. Form the legal entity with the state and decide, with the accountant, how the practice will bill: under the entity's tax identification number with the physician reassigning benefits to it, which is the normal structure for a group of one or more. Apply for the Employer Identification Number on the IRS website; the online application is free, issues the number immediately when approved, and allows one EIN per responsible party per day. Print the confirmation letter the same day, because the bank, the payers and the clearinghouse will all ask for it, and never pay a third party for an EIN.

With the EIN in hand, open the business bank account that will receive electronic payments, and apply for the organization's Type 2 NPI in the National Plan and Provider Enumeration System. The Type 2 NPI is the number the practice bills under; each physician's existing Type 1 NPI identifies the rendering provider. While in NPPES, update every physician's Type 1 record with the new practice address and confirm the taxonomy code matches the specialty you will enroll under, because payers match the taxonomy on the enrollment to the taxonomy in NPPES and a mismatch stalls applications. NPPES assigns NPIs quickly in our experience, often within days, but treat it as the gate before any payer application.

In the same month: bind professional liability coverage and get the certificate, because every payer application asks for it; apply for a CLIA certificate of waiver if the office will run any point-of-care tests; update DEA registrations to the new address; verify every state license is active and pull the primary source verification; and gather the documents every application wants into one shared folder: licenses, DEA, board certification, malpractice face sheet, diploma and training certificates, work history with no unexplained gaps, a W-9 for the entity, the bank letter for EFT, and a voided check. Choose the practice management and EHR system and the clearinghouse now, because the clearinghouse enrollment paperwork in month three needs the payer IDs and the software vendor's submitter identifiers. Decide the billing model, in-house staff or an outsourced billing team, because the person who will send the claims should be in the room for everything that follows. Draft the financial policy and set the fee schedule; many new practices set charges as a multiple of the Medicare physician fee schedule, which changes every year and is published in the CMS fee schedule look-up tool.

Days 31 to 60: enroll with the payers

The second month is applications. Start Medicare on day 31 or earlier, because Medicare enrollment is the one with published rules you can plan around. The practice enrolls in PECOS, the online Medicare enrollment system, using the forms CMS lists on its enrollment applications page: the CMS-855B for the group, the CMS-855I for each physician who is not already enrolled or who needs to update enrollment, the CMS-855R to reassign each physician's benefits to the group, the CMS-588 to authorize electronic funds transfer, and the CMS-460 if the practice will participate (accept assignment on all Medicare claims). Physicians, non-physician practitioners and physician group practices do not pay the Medicare application fee, which applies to institutional providers and suppliers; the fee amount changes each year and the current figure is on the CMS enrollment pages.

Two Medicare rules shape the whole timeline. First, the effective date of billing privileges is the later of the date the application was filed or the date the physician began furnishing services at the new location, and a physician may bill retrospectively for up to 30 days before that effective date if circumstances prevented enrolling in advance (90 days in a presidentially declared disaster). Filing the application before opening day therefore protects the first month of Medicare visits. Second, your Medicare Administrative Contractor processes the application and may ask for more information; respond to development requests within the stated window, because an application that times out is returned and the clock restarts. Mark the five-year revalidation date in the compliance calendar the day the approval arrives.

Medicaid runs in parallel and the process is state specific: every state screens and enrolls providers through its own portal or fiscal agent, ordering and referring providers must be enrolled, and in managed care states the practice both enrolls with the state agency and contracts with each managed care plan. Start it on day 31 as well. Commercial payers take the longest. Complete and attest the CAQH ProView profile for each physician and authorize every plan you intend to join, then submit participation requests to the payers that will carry the most volume, which for a new practice is usually a short list of five to eight. Credentialing (verifying the physician) and contracting (agreeing the fee schedule and terms for the entity) are separate steps at most payers; ask each payer, in writing, for the credentialing decision timeline, the contract effective date and the fee schedule, and log every answer. The credentialing timeline tool gives a realistic planning range by payer type, and the enrollment team can run the whole slate in parallel if the practice would rather not.

Days 61 to 90: connect the pipes and test

The third month turns approvals into working connections. With the clearinghouse, complete EDI enrollment for each payer that requires it: a payer agreement for electronic claims (the 837 transaction), enrollment for electronic remittance advice (the 835) so payments post automatically, and the payer's own EFT enrollment so money arrives by deposit rather than paper check. Medicare requires electronic claim submission for most providers under the Administrative Simplification Compliance Act, and the MAC's EDI enrollment is its own form. Turn on the eligibility connection (270 and 271) and claim status (276 and 277) through the same clearinghouse. Expect each payer's ERA and EFT enrollment to take days to a few weeks and to require the Medicare approval letter or the commercial contract number first, which is why these cannot start in month two.

Inside the practice management system: load the fee schedule, the payer master file with one entry per plan and the right payer ID, the rendering and billing provider records with Type 1 and Type 2 NPIs and taxonomy, the place of service code for the office (11) and for any telehealth, the current CPT, HCPCS and ICD-10-CM code sets, and the superbill or charge set built from the specialty's common services. Register for every payer portal the practice will use for eligibility, authorizations and claim status. Set up the patient statement cycle and the payment methods. Write the front desk workflow (registration, eligibility verification, time-of-service collection) and train the staff on it before the first patient, not after.

Then test. Send a small batch of test claims through the clearinghouse to confirm the submitter ID, the payer IDs and the provider records are accepted; most clearinghouses offer a test mode or a first-week review. When the first real claims go out, watch the acknowledgments (the 999 and 277CA) daily for rejections, because a rejection at this stage is almost always a setup error that will repeat on every claim until fixed. Hold the first week's claims for a second-person review before release. Set the key performance indicators you will read every month from day one: days to first payment by payer, first-pass acceptance at the clearinghouse, clean claim rate, charge lag and held-claim dollars by payer awaiting enrollment.

The 90-day timeline

WindowTaskOwnerOutputTypical durationWhat blocks it
Days 1 to 5Form entity; obtain EIN onlineOwner with accountant and counselState filing; IRS EIN confirmation letterSame day for the EIN once the entity existsEntity type undecided; responsible party details missing
Days 3 to 15Bank account; Type 2 NPI; update Type 1 NPPES records; confirm taxonomyPractice managerGroup NPI; NPPES records showing the new addressDaysEIN letter not yet in hand; wrong taxonomy
Days 5 to 30Malpractice, CLIA waiver, DEA address, licenses, document folder, W-9, EFT letterPractice managerComplete credentialing packetTwo to four weeksWork history gaps; expired certificates
Days 10 to 30Select PM/EHR, clearinghouse and billing model; draft financial policy; set fee scheduleOwner and billing leadSigned vendor agreements; fee schedule loaded laterTwo to three weeksDemos scheduled late; unclear volume projections
Days 31 to 45Medicare enrollment in PECOS: 855B, 855I, 855R, 588, 460Billing or credentialing leadApplication submitted; development requests answeredSubmission in days; MAC decision commonly several weeksNPPES mismatch; missing signatures; unanswered development letters
Days 31 to 60Medicaid enrollment through the state portal; managed care plan contractingCredentialing leadState Medicaid ID; plan contractsWeeks to months by stateScreening requirements; ownership disclosure incomplete
Days 31 to 60CAQH ProView attestation; commercial participation requests to the top payersCredentialing leadApplications acknowledged with timelines in writingCredentialing commonly 60 to 120 days or more; contracting afterPanel closed; incomplete CAQH; no written effective date
Days 61 to 80Clearinghouse EDI, ERA and EFT enrollment per payer; eligibility and claim status connectionsBilling lead with clearinghousePayer connections active; ERA and EFT confirmedDays to a few weeks per payerNeeds Medicare approval or contract number first; bank letter missing
Days 61 to 85System build: payer master, providers, fee schedule, code sets, superbill, statements, portalsBilling leadSystem ready for live claimsTwo to three weeksVendor implementation queue; superbill not specialty specific
Days 75 to 90Front desk workflow and training; test claims; acknowledgment monitoring; KPI dashboardPractice manager and billing leadFirst clean claims accepted; daily rejection review in placeOne to two weeksStaff hired late; test claims skipped

What happens when the doors open before the payers are ready?

Almost every new practice opens before every payer is in network, so plan for it rather than hoping. For Medicare, file before opening day and rely on the 30-day retrospective billing allowance to cover the first weeks; hold those claims in the system with the date of service intact and release them when the approval arrives. For Medicaid, most states do not pay for services before the enrollment effective date, so decide in advance whether to schedule Medicaid patients before the approval. For commercial payers that have not finished credentialing, the choices are to see the patient out of network (which means verifying out-of-network benefits and telling the patient the cost before the visit), to offer a self-pay rate with clear written pricing, or to defer non-urgent visits until the effective date. What the practice must not do is bill a new physician's services under another physician's NPI or under a prior employer's group number; that is false claims territory, not a workaround.

Held claims need a tracker. Timely filing runs from the date of service for most payers, and a claim held 90 days waiting for a contract has already used a large share of a 180-day window. Log every held claim with its payer, date of service, dollar value and the filing deadline, and release them in deadline order the day the enrollment is active. Tell patients plainly at scheduling which plans the practice is in network with today; the front desk should have the list and update it weekly.

The numbers to watch in the first 90 days of billing

Days to first payment by payer tells you whether the pipes are connected; for Medicare with ERA and EFT in place we expect payment on clean claims within about two weeks of submission, and a payer at 45 days with no remittance is a payer whose enrollment is not actually complete. First-pass acceptance at the clearinghouse should be in the high nineties within the first month; anything lower is a setup error. The clean claim rate (paid on first submission without edits or denials) should climb week by week as the payer master and the superbill are corrected. Charge lag should be under two business days from the start, because a new practice has no backlog yet and should never create one. Held-claim dollars by payer should fall to zero as each enrollment completes, and the enrollment status report (payer, application date, effective date, contract received) should be reviewed every week until the last payer is live. The onboarding checklist we use with new practices follows this same sequence.

Questions we hear

Can we start seeing Medicare patients before the enrollment is approved?

Yes, with care. Medicare allows a physician to bill retrospectively for up to 30 days before the effective date of billing privileges when circumstances prevented enrolling in advance, and the effective date is the later of the filing date or the date services began at the new location. In practice this means: file the application before you open, keep the claims for the first weeks in a held status with the correct dates of service, and release them once the approval letter arrives. Do not file them before approval, and do not assume a longer window than 30 days outside a declared disaster.

Do we need a Type 2 NPI if there is only one physician?

If the practice is organized as an entity (a professional corporation, an LLC or similar) and bills under the entity's tax identification number, yes: the entity needs its own Type 2 NPI as the billing provider, and the physician's Type 1 NPI identifies the rendering provider, with Medicare benefits reassigned to the entity via the CMS-855R. A sole proprietor billing under a Social Security number can bill with a Type 1 NPI alone, but most new practices are entities for liability and tax reasons, and the Type 2 NPI takes only days to obtain.

How long does commercial credentialing really take?

It depends on the payer, and the honest planning range is wide: from roughly two months to four months or more between a complete application and a contract effective date, with the contracting step after credentialing adding time at some payers. Closed panels can mean no timeline at all. The practical answers are to apply on day 31 with a complete CAQH profile, to ask every payer for its timeline and effective date in writing, to follow up on a fixed schedule rather than waiting for mail, and to assume at least one major payer will not be ready on opening day.

Should we outsource billing from day one or hire a biller?

Either works if the person or team is involved from month one, because the enrollment, clearinghouse and system build decisions are billing decisions. The mistake we see is hiring or contracting billing in month three and handing them a system someone else configured. A single new physician often does not generate enough claims to keep a full-time biller busy, which is why many start with an outsourced team and bring billing in-house later, or never; the right answer depends on volume, specialty and how much the owner wants to manage. Whichever you choose, the owner should still read the monthly KPI report.

What do we do about the revalidation and the ongoing maintenance?

Medicare revalidation is due every five years (every three for DMEPOS suppliers), and CMS posts due dates on its revalidation list about seven months ahead; missing it can mean a hold on payments or deactivation, which requires a brand new application. Medicaid revalidates on its own cycle, typically every five years as well. CAQH requires re-attestation every 120 days. Changes of ownership and certain adverse legal actions must be reported to Medicare within 30 days and most other changes within 90. Put every one of these dates in a shared compliance calendar during month two, when the approvals arrive, because in three years nobody will remember who was supposed to track them.

Sources and references