Setting Up a New Practice to Bill Insurance

When to use this playbook

• You are opening an independent physician, therapy, or behavioral health practice and want insurance billing available near launch.
• You need to understand which registrations depend on one another instead of treating credentialing as one large application.
• You are deciding whether to manage enrollment yourself or use a credentialing and contracting partner.
• You have a target opening date but do not yet have the entity, group NPI, CAQH profile, or payer approvals organized.

What success looks like

The practice has one consistent legal identity across its state registration, IRS records, bank account, W-9, NPPES, CAQH, Medicare, Medicaid, and commercial payer records. Each provider is affiliated with the correct group, every required contract is executed, and the practice has written effective dates before representing itself as in-network.

An office opening date and an insurance billing date are not necessarily the same. A practice can begin operating before payer enrollment finishes, but it needs a deliberate cash-pay or out-of-network policy until each applicable in-network effective date arrives.

The order of operations at a glance

The planning ranges below are current as of August 31, 2026. They are working estimates rather than guaranteed agency or payer service levels.

What can run in parallel—and what genuinely cannot

The critical path is not “Medicare, then Medicaid, then commercial.” The critical path is completing the shared foundation—entity, EIN, licenses, NPIs, malpractice, CAQH, banking, and documents—so all relevant payer applications can move at once.

1. Form the legal entity and lock the practice identity

Action

Choose the business structure with appropriate legal and tax advice, register it with the state, and settle the exact legal business name, ownership, registered address, practice address, and any DBA. Professional corporations, professional LLCs, and ownership rules differ by state and profession.

Inputs

• Proposed legal name and any DBA
• Owner and manager information
• Registered agent and business address
• Professional-entity requirements in the formation state

Expected outcome

You receive an approved formation record, such as articles of organization or incorporation. Preserve the legal name exactly as approved; punctuation, suffixes, and address details should remain consistent downstream.

Gotchas

Do not obtain the EIN for an LLC or corporation before the state has formed it. The U.S. Small Business Administration also notes that multi-state operations can create foreign-qualification and local permit requirements.

Planning time: One day to several weeks. Blocked if skipped: EIN, Type 2 NPI, organizational banking, group payer applications, and contracts.

2. Obtain the EIN, business bank account, and W-9

Action

Apply directly to the IRS for the employer identification number, then open a business bank account in the entity’s legal name. Complete a W-9 using the same legal name and taxpayer identification number that payers will receive.

Inputs

• Approved entity name and structure
• Responsible party’s SSN or ITIN
• Business and mailing addresses
• Formation documents and ownership information for the bank

Expected outcome

You have an IRS EIN confirmation, a bank account capable of receiving payer deposits, and a clean W-9 ready for enrollment packets.

Gotchas

An approved online EIN is issued immediately and can be used at once. The application is free through the IRS EIN service.

The bank account name must align with the enrolled person or legal business name. Medicare EFT setup requires the TIN, NPI, routing and account information, plus acceptable bank documentation under Form CMS-588.

Planning time: Minutes for an eligible online EIN application, plus several days for banking. Blocked if skipped: Type 2 NPI, Medicare EFT, payer contracts, and deposits.

3. Secure the professional licenses required to deliver care

Action

Confirm that each clinician has an active, unrestricted license for every state in which the practice will provide care under that state’s rules. Also identify any separate professional-entity, facility, controlled-substance, or local operating registrations relevant to the practice.

Inputs

• Education, training, examination, and supervision records
• Existing license verifications
• Work and activity history
• Background-check or fingerprint materials where required
• Explanations and supporting records for reportable history

Expected outcome

Every rendering provider has an active license number, original issue date, expiration date, and publicly verifiable status for the relevant state.

Gotchas

Licensure is frequently the longest prerequisite. California’s physician board currently recommends applying six months in advance and reported a 59-day average merely to reach initial review in late August 2026. Behavioral health licensing timelines also vary substantially by license and jurisdiction. Review the applicable state medical board processing data or social work licensing requirements before setting the insurance launch date.

Planning time: No new processing if already licensed; one to six months or longer for a new license. Blocked if skipped: Complete CAQH attestation and payer credentialing approval.

4. Obtain the correct individual and organizational NPIs

Action

Confirm the clinician’s Type 1 NPI and apply for a Type 2 NPI for the incorporated practice or group. The Type 1 identifies the person who rendered care; the Type 2 identifies the healthcare organization billing under its legal entity and TIN.

Inputs

• Provider or organization legal name
• SSN for an individual or EIN for an organization
• Practice, mailing, and endpoint information
• Taxonomy codes and license information
• An authorized official for the organization

Expected outcome

The individual and organization each have the NPI appropriate to their role, with matching legal names, addresses, taxonomies, and contact information in NPPES.

Gotchas

• An individual receives only one Type 1 NPI, even when practicing in multiple states or organizations. Do not create another Type 1 NPI for a new practice.
• An incorporated clinician can have both a personal Type 1 NPI and a corporate Type 2 NPI.
• A sole proprietorship is treated as an individual Type 1 entity for NPI purposes, even when it has an EIN.
• An NPI does not establish licensure, payer credentialing, enrollment, or a right to payment.

These distinctions are defined in the CMS NPI fact sheet. A complete electronic application can often produce an NPI within approximately 10 days, although processing varies, as summarized by the federal Health.mil identifiers FAQ.

Planning time: Several days; allow about 10 days. Blocked if skipped: Medicare, Medicaid, commercial payer enrollment, claims, and provider-to-group affiliation.

5. Bind malpractice coverage and build one credentialing packet

Action

Bind professional liability coverage and create one controlled document set for every provider and the group. Use the same names, addresses, dates, and histories throughout the packet.

Inputs

• Provider specialties, services, locations, and anticipated volume
• Prior coverage and claims history
• Requested occurrence or claims-made structure and coverage limits
• State licenses, NPIs, W-9, education, training, board certification, work history, and DEA registration where relevant

Expected outcome

You have a current certificate or policy face sheet identifying the covered provider or entity, limits, carrier, policy number, and effective and expiration dates.

Gotchas

Make sure coverage begins before the intended patient-care date and includes the correct providers and practice locations. The CAQH profile requires professional liability information, and commercial payers commonly request the policy face sheet alongside licenses, NPI, W-9, and work history. The required CAQH fields are documented in the CAQH Provider Data Portal user guide; a representative payer checklist is available from UnitedHealthcare.

Planning time: Several days to several weeks. Blocked if skipped: Complete CAQH attestation and payer credentialing review.

6. Complete and attest the CAQH profile

Action

Register for the CAQH Provider Data Portal, formerly known as CAQH ProView. Complete every applicable section, upload current documents, attest to accuracy, and authorize the health plans that need access.

Inputs

• Type 1 NPI, licenses, taxonomies, and practice locations
• Education, training, work history, and hospital affiliations where applicable
• Professional liability policy
• W-9, DEA information where relevant, and disclosure explanations

Expected outcome

The profile shows a complete, attested status, and selected payers are authorized to retrieve the provider’s information.

Gotchas

• CAQH is a shared data source, not a payer application and not a credentialing approval.
• The profile must be attested, not merely populated.
• Uploading a document does not correct conflicting data elsewhere in the profile.
• Providers generally need to review and re-attest every 120 days.

The CAQH practitioner guide explains document submission, payer authorization, attestation, and recurring re-attestation.

Planning time: Several focused hours to several days when the packet is ready. Blocked if skipped: Credentialing with many commercial payers.

7. Enroll the practice and providers in Medicare

Action

Create the appropriate CMS Identity & Access roles and submit through PECOS. A new group practice generally uses the CMS-855B path, while physicians and eligible non-physician practitioners use CMS-855I. The individual’s reassignment of Medicare benefits to the group is now handled through CMS-855I rather than the discontinued CMS-855R.

Inputs

• Type 1 and Type 2 NPIs
• Individual SSN and organizational EIN
• Licenses, practice locations, ownership, and managing-control information
• Bank account and EFT documentation
• Authorized and delegated official information

Expected outcome

The individual and group enrollments are approved, Medicare has established the provider-to-group reassignment, and approval correspondence identifies the applicable enrollment records and billing effective date.

Gotchas

• The individual and group can enroll concurrently; the reassignment cannot take effect until both are enrolled.
• A Type 2 NPI does not enroll the organization in Medicare.
• Medicare requires EFT information and supporting bank documentation during enrollment.
• Respond promptly to development requests; unanswered requests can stop or reject the application.

Current forms and PECOS paths are maintained on the CMS enrollment applications page. Medicare Administrative Contractors commonly take approximately 45 days to review complete applications, with paper applications and corrections taking longer, under current CMS processing guidance.

Planning time: Approximately 45 days or longer. Blocked if skipped: Medicare billing under the practice’s TIN and Type 2 NPI.

8. Complete state Medicaid enrollment and Medicaid MCO applications

Action

Apply separately to the Medicaid program in every state where the practice intends to treat Medicaid members. After establishing the state enrollment required by that jurisdiction, complete applications for the Medicaid managed care organizations relevant to the practice’s market.

Inputs

• Entity, EIN, Type 1 and Type 2 NPIs, licenses, and service locations
• Ownership and control disclosures
• Banking and EFT information
• Provider affiliations and state-specific forms
• Medicare information where the state requests it

Expected outcome

The practice and providers have active state Medicaid enrollment records and, where applicable, separate participation with the Medicaid MCOs serving the target patient population.

Gotchas

Medicaid is administered state by state, so one enrollment does not establish participation elsewhere. Medicare approval also does not replace Medicaid enrollment. The CMS Medicaid Provider Enrollment Compendium directs providers to enroll separately in each target state.

Processing times vary materially. California, for example, currently allows 90 days for physician applications and 180 days for many other provider types, illustrating why Medicaid should begin as soon as the shared prerequisites are ready. These are California limits, not national service levels. See the current Medi-Cal enrollment FAQ.

Planning time: Roughly 60 to 180 days or longer. Blocked if skipped: Medicaid fee-for-service payment and participation in Medicaid managed care products requiring state enrollment.

9. Apply to commercial payers in priority order

Action

Choose the payers that matter in the practice’s actual metro, specialty, referral base, and patient population. Submit the group participation request and every required individual provider application while Medicare and Medicaid are still processing.

Inputs

• Current, attested CAQH profile and payer authorization
• Group and individual NPIs, TIN, W-9, licenses, and malpractice coverage
• Practice locations, specialties, provider roster, and service lines
• Requested products, including commercial, exchange, or managed care lines

Expected outcome

The payer has approved credentialing, executed the participation agreement, affiliated the providers with the correct group and locations, and issued a written effective date.

Gotchas

• A complete application does not guarantee an open network or contract offer.
• Credentialing, contracting, and system loading are separate milestones.
• A group contract does not automatically add every clinician or location.
• Applying to every recognizable payer before checking local relevance creates maintenance work without necessarily improving patient access.

Payer workflows differ. Aetna first evaluates network need and then uses CAQH during credentialing. UnitedHealthcare estimates up to 45 days or more for credentialing and allows up to 60 additional days for a completed contract to be loaded after approval.

Planning time: Commonly 60 to 120 days or longer. Blocked if skipped: In-network billing for the payer’s commercial products.

10. Activate the billing relationship before calling the practice in-network

Action

For every payer and product, verify the contract, credentialing approval, provider-to-group affiliation, service locations, effective date, claim-submission route, EFT, and electronic remittance setup. Send a controlled first claim and monitor it through acceptance and adjudication.

Expected outcome

• The payer recognizes the correct billing and rendering NPIs.
• The group TIN and service location are active for the intended product.
• Claims reach the payer through the clearinghouse or direct connection.
• Payments and electronic remittance advice reach the correct systems and bank account.

Gotchas

Do not treat “credentialed” as synonymous with “ready to bill.” UnitedHealthcare, for example, requires credentialing and contracting to be complete and the provider to be active in its systems before in-network care begins. Its credentialing FAQ warns that premature claims can be denied or paid at out-of-network levels.

Medicare EFT is also distinct from Medicare enrollment; it controls how approved payments reach the practice but does not itself create billing privileges. See the CMS EFT guidance.

Planning time: Several days to several weeks after payer approval. Blocked if skipped: Reliable claim acceptance, payment, and reconciliation.

A realistic backward plan from opening day

If opening is less than 90 days away and payer applications have not been submitted, plan for the physical practice opening and the insurance go-live to occur on different dates.

Arctic Health is the best fit when…

• You are a doctor-founder who needs one team to translate the vocabulary, build the sequence, and manage payer communication through activation.
• The launch involves a group entity, multiple clinicians, Medicare or Medicaid, several commercial payers, or more than one state.
• No internal employee can reliably own weekly follow-up, corrections, contracting, expirables, and roster maintenance after launch.
• You want credentialing and payer contracting managed together rather than handing completed credentialing files to a separate contracting vendor.

Arctic Health gathers documentation, manages CAQH and payer applications, handles follow-up and contracting, and continues ongoing credentialing maintenance. Once required documentation is complete, payer applications are submitted within two days; the published average to fully credentialed status is 60–90 days. These figures describe Arctic Health’s operating process, not a guaranteed payer decision date. See Arctic Health’s credentialing process and its platform-plus-expert-team model.

Arctic Health is not a fit when…

• You already have an active license, Type 1 NPI, current CAQH profile, established billing setup, and only one or two straightforward payer applications.
• You have an experienced internal credentialing owner with enough time to manage submissions, weekly follow-up, contracts, effective dates, and recurring maintenance.
• You need a guaranteed approval, contract, reimbursement rate, or completion date; those outcomes remain subject to payer and regulator decisions.

Frequently asked questions

I am opening a private practice next month. Can I be ready to bill insurance by then?

Full in-network readiness within one month is unlikely if payer enrollment has not started. Medicare review alone commonly takes approximately 45 days, while commercial credentialing, contracting, and system loading can extend well beyond that. Open with a clearly documented cash-pay or out-of-network policy if necessary, and do not represent the practice as participating until each payer provides an active effective date. The UnitedHealthcare credentialing timeline illustrates the separate approval and loading stages.

How long before opening should I start credentialing?

Start four to six months before the intended insurance launch, and earlier when a new state license is required. Entity formation and identifiers can move relatively quickly, but licensing, Medicaid, commercial contracting, corrections, and payer system loading create the real schedule risk. California’s physician board, for example, recommends applying for licensure six months before the license is needed. Current timing is available from the Medical Board of California.

Does a solo practice need both a Type 1 and Type 2 NPI?

An incorporated solo practice generally needs the clinician’s Type 1 NPI and the organization’s Type 2 NPI. The claim uses these identifiers for different purposes: the Type 1 identifies the rendering clinician, while the Type 2 identifies the billing organization. A sole proprietorship is the important exception because CMS treats it as an individual Type 1 provider rather than a separate organizational provider. The distinctions are defined in the CMS NPI fact sheet.

Does completing CAQH mean I am credentialed with insurance?

No. CAQH stores and distributes provider information to authorized organizations; it does not approve network participation. Each payer must still accept an application, verify credentials, complete contracting where applicable, establish the group affiliation, and issue an effective date. Keep the profile current after submission because payers can pause or close files when CAQH data or documents become stale. The CAQH practitioner guide separates profile completion from each organization’s credentialing decision.

What does new-practice credentialing cost if I do it myself?

The EIN, NPI, and CAQH profile do not carry provider application fees, but entity formation, professional licenses, malpractice coverage, banking, staff time, and some program-specific requirements create the real cost. The IRS issues EINs free, and CAQH provides its portal to providers and office staff at no charge. A managed-service quote should be compared with the owner’s time, delayed revenue, correction risk, and ongoing maintenance—not just the cost of submitting forms. See the IRS EIN service and CAQH Provider Data Portal fact sheet.

Can Medicare, Medicaid, and commercial payer applications run at the same time?

Yes. Once the entity, EIN, NPIs, licenses, malpractice coverage, banking, and provider data are ready, Medicare, state Medicaid, and commercial applications can usually proceed in parallel. Medicaid managed care may add a second state-specific sequence after or alongside state enrollment, but commercial applications generally do not need to wait for Medicare approval. Medicaid participation remains state-specific, as explained in the Medicaid Provider Enrollment Compendium, while commercial payers maintain their own participation workflows.

References

• Internal Revenue Service: Get an employer identification number
• Centers for Medicare & Medicaid Services: NPI fact sheet
• CMS: Medicare enrollment applications and PECOS
• CMS: Medicare enrollment review and billing guidance
• CAQH: Provider Data Portal user guide
• CMS: Medicaid Provider Enrollment Compendium
• Aetna: Request to join the provider network
• UnitedHealthcare: Medical provider network onboarding
• Medical Board of California: Physician license processing times
• Arctic Health: Credentialing and payer contracting services