Fam Pract Manag. 2004 Nov-Dec;11(10):77.

Starting a practice in a health professional shortage area


I recently completed my residency and am considering starting my own practice in a health professional shortage area (HPSA). What is the best way to get a loan? Are there any organizations that would lend me money at a lower interest rate or provide other incentives to practice in an HPSA?


The most common way to fund a new practice is via a Small Business Administration (SBA) loan through a commercial bank; however, a better way for physicians to get startup loans is often through a specialty lender because there is less paperwork and the lending criteria are less demanding. For example, a bank may require a tight income-to-debt ratio, a written business plan and collateral security, none of which the specialty lenders require. The specialty lenders charge a slightly higher interest rate, but at minimal cost you can pay off the remaining balance with a lower interest loan from a commercial bank after you have been in practice for a year and have demonstrated good local credit with your bank. I also recommend getting the longest repayment term possible from the first lender, to minimize monthly payments until your practice is established, and then refinancing or paying the loan faster with larger monthly payments.

There are also loan repayment programs sponsored by national, state and local governments (and some private organizations) where health care providers are recruited to practice in designated HPSAs. Organizations include the National Health Services Corps, the Indian Health Service, the National Institutes of Health and many others. Some cities even have housing-loan subsidies for physicians in under-served areas. Most contracts require a two- to four-year commitment, but you should consult individual programs for information. Benefits may include tax relief and scholarship opportunities. A Google search for “physician shortage area loans” (without the quotation marks) will return many links for program details.

Another good way to find out about such programs is through local hospital administrators, who are seeking ways to attract physicians to underserved areas. Hospitals are often the best source for “forgivable” loans and offer the least paperwork.

Dictation reminders


Can you recommend a good system to remind physicians to sign dictation? What are the malpractice consequences of failing to sign dictation?


One good system to try is this: When transcription comes back from an outside source or is finished by your transcriptionist, read and sign it prior to filing it in the chart. You can instruct your filer not to file any transcription that has not been signed. This ensures that you will review the progress note, but it can delay filing, which would leave the chart incomplete until you do sign the dictation.

Another system is to place the transcription in the chart along with a sticker flag that says “SIGN.” This reminds the physician to sign the note the next time he or she sees the patient. This also alerts the physician to review the progress note from the patient’s last visit. The disadvantage with this approach is the possible time lapse between visits, which could make it difficult to recall what transpired if there was an error in transcription.

Most malpractice insurance companies recommend doctors sign transcription from dictation to verify that what was dictated was correctly transcribed. Check with your own malpractice risk management department for further advice.

Medicare teaching rules


I am a supervising physician at a clinic subject to the Medicare teaching physician rules’ primary care exception. Is it appropriate for me to bill a level 1, 2 or 3 service if the resident’s documentation supports a level 4 or 5 service and only the resident has seen the patient?


Yes, I believe it is acceptable. The primary care exception provides a means for supervising physicians to submit claims for level 1, 2 or 3 office or outpatient visits that occurred without the supervising physician present and without the supervising physician having to repeat the key portion of the visit. The fact that the resident’s documentation may support a higher level of service does not invalidate the supervising physician’s claim for a lower level of service under the exception. The supervising physician is simply choosing to bill a lower level of service than if he or she were following the rules outside the exception.

To access the Medicare teaching physician rules, see title 42 CFR 415.170 and following at Also see the Medicare Claims Processing Manual, chapter 12, section 100, at

* Denotes member of FP Assist, the AAFP’s online clearinghouse for consultants and attorneys.


Copyright © 2004 by the American Academy of Family Physicians.
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