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Not long ago, it was rare to see nurse practitioners (NPs) running their own private practices.
Now? It’s becoming a lot more common, and for good reason!
More NPs are leaving traditional healthcare settings for more autonomy, better work-life balance, and the freedom to practice on their own terms.
But starting an independent practice isn’t as simple as putting up an “Open” sign in the window of your premises. There are legal requirements to comply with, business logistics to understand, and a whole lot of planning to do first.
It can feel overwhelming, but don’t worry, we’ve got you.
This guide will walk you through the process step by step, whether you’re just considering it or you’re already knee-deep in paperwork.
Can you start your own practice as an NP?
Registered Nurse Practitioners (NPs) can start their own private practice, but the rules depend on the state you’re in.
The American Association of Nurse Practitioners (AANP) says NP practice laws fall into three types: restricted, reduced, and full.
- FPA (Full Practice Authority) laws allow NPs to work independently, using their full training and certification without physician oversight. They can assess patients, diagnose conditions, order tests, and prescribe medications, including controlled substances, under the State Board of Nursing.
- Reduced practice limits at least one aspect of an NP’s work, such as prescribing controlled substances. NPs must have a collaborative agreement with another healthcare provider or work within specific settings.
- Restricted practice requires NPs to have supervision, delegation, or team management by another provider to deliver care.
If you live in a state that has adopted FPA laws, you can open your own clinic without needing a collaborating doctor.
Bottom line? Before you start picking out office furniture, check your state’s regulations. You don’t want to get halfway through the process only to find out you need a supervising physician.
Which states allow NP to practice independently?
Legal and licensing requirements for NPs
Now that you know it’s possible to open your own practice as an NP, let’s talk about how to do it. You’ll need to check a few important legal boxes.
Understand your state's scope of practice laws
The first thing to do is to check your state’s scope of practice laws. These laws determine what you’re legally allowed to do without physician oversight.
Knowing where your state falls on this spectrum will help you plan your practice structure and avoid legal pitfalls.
Check with your state’s Board of Nursing or professional organizations like the American Association of Nurse Practitioners (AANP) for up-to-date regulations.
These resources outline licensure requirements and restrictions that affect your ability to practice independently.
And, of course, if you’re unsure about some legal nuances, consulting a healthcare attorney can provide better clarity.
Obtain necessary state licenses
Once you understand your state’s requirements, the next step is securing the right licenses to operate legally and smoothly from day one.
At a minimum, you’ll need:
- Your NP state license – This authorizes you to practice in your state and must be kept up to date.
- A National Provider Identifier (NPI) number – Required for billing insurance companies and identifying you as a healthcare provider.
- A DEA number – Necessary if you plan to prescribe controlled substances.
Some states have additional licensing requirements, like special prescribing licenses or physician agreements. To avoid last-minute surprises, check with your state’s Board of Nursing, DEA, and NP organizations.
Business requirements
Opening up a private practice means managing a successful business as a business owner. Setting up the right legal and financial foundation keeps you protected, compliant, and running smoothly.
Here’s what you need to handle on the business side:
- Register your practice as a legal entity – Choose between an LLC, PLLC, or corporation, depending on your state’s requirements and tax benefits. The most common choices are an LLC or a corporation. Both protect your personal assets, but they differ in taxes, management, and legal rules.
- Obtain an Employer Identification Number (EIN) – Required by the Internal Revenue Service (IRS), an EIN is essential for tax filing, hiring employees, and opening business bank accounts.
- Set up dedicated business banking and financial accounts – Keeping personal and business finances separate makes bookkeeping, taxes, and expense tracking much easier.
- Secure business insurance – This is non-negotiable to protect yourself (especially because of malpractice) from potential legal claims. Some states or insurers may also require additional business liability coverage.
Collaboration with physicians (if applicable)
Even if your state allows NPs to practice independently, certain regulations might still require you to have a collaborative agreement with a physician (which you should establish early).
This collaboration can be required for offering specific services, prescribing controlled substances, regular case reviews, consultation agreements, or supervision for specific procedures.
Developing a business plan
A business plan outlines your vision, sets goals, and maps out your path to success.
It helps with decision-making, securing funding, and staying on track. Plus, it’s useful when explaining your mission to partners, investors, and future team members.
Here are the key components your business plan should include:
As you can see, you want your business plan to have a general summary of your practice’s mission and vision, along with the type of practice you’ll be running. This defines what you do, who you serve, and what makes you unique.
You’ll also want to include detailed market research, marketing strategy, and financial plans that will detail local demand for your services, help you attract the right patients, and stand out from competitors.
Finally, a risk management plan helps protect your practice from setbacks. Identifying potential risks allows you to put safeguards in place, like insurance, compliance, and emergency plans.
Setting up your practice
It’s time to turn your vision into reality. Setting up your practice involves a lot of moving parts, and each decision you make will shape the experience for both you and your patients.
Selecting a location (physical or telehealth-based)
One of the first big decisions you’ll make is how you want to see patients – via a traditional clinic environment, virtually using telehealth, or a hybrid model.
This choice can vary based on your specialization, patient demographics, and state regulations.
Do your patients prefer in-person visits or the ease of virtual care? What are your state’s telehealth laws? How accessible will your practice be? Taking these factors into account will help you make the best decision.
Here are your options:
- Physical practice: If you’re planning to see patients in person, consider factors like proximity to your target audience, parking and public transport availability, and local competition.
- Telehealth-based: With the rise of digital health, telehealth can be a great option, especially for practices that cater to a broader geographic area or specialize in follow-up care, consultations, or mental health.
- Hybrid approach: If your goal is flexibility, a hybrid model could be ideal. This allows you to offer both in-person and virtual visits, meeting the needs of different patients.
Setting up your office space and purchasing medical equipment
Once you’ve selected your location, it’s time to create an office space that’s both functional and welcoming. The environment you create plays a big role in patient comfort and satisfaction.
For a physical office, consider things like:
- Waiting area comfort (comfortable seating, calming décor)
- Exam rooms that are well-lit and equipped for exams and procedures
- Administrative space that’s organized for efficient workflow
As for medical equipment, make sure you have the essentials based on your specialty. Whether you need exam tables, diagnostic tools, or specialized equipment, investing in high-quality items will help you deliver the best care.
Choosing an electronic health record (EHR) system and other software tools
A reliable EHR system is at the heart of modern healthcare practices, and it’s crucial to choose one that fits your needs. Look for a system that:
- Streamlines administrative tasks (scheduling, billing, patient communication)
- Improves patient care (with features like easy access to patient records and treatment history)
- Ensures compliance with regulations (HIPAA, security, etc.)
💡EMR or PMS?
You don’t have to choose a stand-alone EMR. These days, you can get an EMR system to manage patient records and practice management software to manage non-clinical operations all under one roof.
One tool, for everything!
Hiring and training staff
As you start building your team, focus on recruiting individuals who are qualified and aligned with your practice’s values and patient care standards.
Once your team is in place, training is crucial. Ensure that everyone understands your practice’s goals and patient care philosophy. Additionally, they should also be fully briefed and trained on the technology tools you’re using.
Regular staff training helps ensure a smooth patient experience and high-quality care across the board.
Financial management and insurance
To run a successful practice, you need to manage your finances well. Whether you take insurance, offer cash-pay, or both, the right systems will keep you organized and stress-free.
Open a business bank account and set up accounting processes
One of the first things you’ll want to do is separate your business finances from your personal finances. This means:
- Opening a business bank account to manage incoming payments and expenses
- Setting up an accounting system (or hiring a bookkeeper) to track revenue, expenses, and taxes
- Using medical practice management software that integrates with your billing system for smoother financial operations
A reliable accounting process will help you stay compliant with tax laws, manage cash flow, and make informed business decisions. Plus, it makes tax season way less of a headache.
Billing and coding requirements for insurance reimbursements
If you plan to accept insurance, billing and coding will become a big part of your day-to-day operations. Insurance companies have strict requirements for claims, and even small mistakes can lead to delays, denials, or lost revenue.
To ensure smooth reimbursements:
- Stay up to date on CPT, ICD-10, and HCPCS codes specific to your specialty
- Use medical billing software or hire a professional medical biller
- Double-check documentation to ensure claims are accurate and complete before submission
- Understand common reasons for claim denials and how to appeal them
Establish relationships with insurance providers and credentialing
To accept insurance, you’ll need to go through credentialing – a process where insurers verify your qualifications before you can bill them. This process can take several months, so it’s best to start early.
Here’s how to get credentialed:
- Choose which insurance plans to accept (Medicare, Medicaid, private insurers, etc.).
- Apply with each provider, submitting documents like your NP license, NPI number, malpractice insurance, and references.
- Negotiate contracts to set reimbursement rates and billing terms.
- Track renewal deadlines to stay active in insurance networks.
Partnering with insurance providers expands your patient reach and revenue potential, but if you prefer a cash-pay model, you may want to explore direct-pay or membership-based services instead.
Setting up operations at your private practice
A well-structured practice requires efficient systems for organization and a smooth patient experience.
Partnering with an MSO or using an all-in-one practice management software like Pabau can simplify your practice’s operations, providing the business support you need so you can focus on patient care.
Establish a client management system
A client management system is the backbone of your practice.
Having everything in one place reduces errors, improves efficiency, and enhances the patient experience.
Whether you’re running a solo practice or managing a team, a strong client management system will keep everything organized and running smoothly.
Use the right tools and technologies
Technology is your best friend when it comes to running a private practice efficiently. The right tools will save you time, ensure compliance, and improve patient care. Key systems to consider:
- EHR: Essential for managing patient data safely and securely
- Billing and coding software: Helps with claims processing and insurance reimbursements
- Scheduling systems: With a scheduling tool, you can enable patients to book online appointments, which is easier for you and patients
Don’t forget, though, this doesn’t have to be three separate systems that you need to connect. Hint hint, Pabau does all of the above in one!
Create administrative protocols
A well-run practice depends on clear administrative protocols that keep things consistent. Consider setting up standard operating procedures for:
- Patient intake and check-in – digital forms, ID verification, insurance details
- Billing and payments – insurance claims, co-pays, payment plans
- Staff workflows – who handles what, how tasks are assigned, and escalation procedures
Having these processes in place ensures consistency, professionalism, and efficiency, making sure your team is on the same page and your patients have a smooth experience.
Implement a telehealth system
A telehealth system allows you to:
- Offer virtual consultations for follow-ups or minor concerns
- Reach patients in rural or underserved areas
- Improve convenience for busy patients who prefer remote care
Whether you go all-in on telehealth or just offer it as an option, integrating a secure, HIPAA-compliant telehealth platform can help you meet modern patient expectations and provide a more accessible healthcare experience.
Open and operate your private practice with Pabau
Starting your own private practice as a nurse practitioner is an exciting journey — one that gives you the freedom, autonomy, and opportunity to provide care on your own terms.
But let’s be real – it also comes with a lot of moving parts.
That’s where Pabau comes in. Our all-in-one practice management software takes the hassle out out of running a med spa or healthcare business so that NPs can focus on providing the highest-quality patient care.
You can:
- Streamline booking and scheduling
- Manage patient records effortlessly
- Simplify billing and payments
- Run telehealth appointments seamlessly
- Get new clients using a built-in marketing suite
Book a demo now and see how Pabau can help!
