When I finished residency in New York and moved to Hawaii, I spent a couple of years in an established practice before deciding to go out on my own. The reasons were probably the same ones many physicians consider independent practice in the first place: autonomy, the ability to shape the patient experience yourself, and the opportunity to build something that reflects how you actually want to practice medicine.

Two years in, I don’t regret the decision for a second. But I’ll share that nothing in medical school or residency prepares you for the business realities of running a dermatology practice. You come out of training knowing how to diagnose complex conditions, manage difficult cases, and care for patients. You do not come out knowing how to negotiate payor contracts, interpret a profit and loss statement, or figure out why your collections report doesn’t match your cash flow. Most of that I learned in real time.

If there’s one thing I would strongly encourage any dermatologist opening a practice not to underestimate, it’s revenue cycle management (RCM). Getting your billing infrastructure right before you ever see your first patient can save you an enormous amount of stress, lost revenue, and operational headaches later.

Billing will make or break you, especially in dermatology

Before opening my practice, I spoke with several physicians who had already gone independent. The advice I heard repeatedly was simple: Find a strong billing partner early. I took that guidance seriously. Months before we opened our doors, we were already working through workflows, payor enrollment, coding processes, and EHR integration. At the time, it felt overly cautious. Looking back, it was one of the best operational decisions I made.

Dermatology billing is uniquely complex. In a single visit, you may perform a biopsy, destruction, excision, injection, or medical evaluation, all with different modifier rules, bundling considerations, and documentation requirements. A generalist billing team may understand basic claims processing, but dermatology requires specialty-specific expertise.

I saw this firsthand early on. Even small coding inconsistencies could delay reimbursement or trigger avoidable denials. When you’re building a practice from the ground up, those delays matter. Cash flow is tighter than many physicians anticipate during the first year, and a handful of denied or underpaid claims each week adds up quickly.

Understand payor behavior before it becomes your problem

One of the biggest surprises for me early in practice ownership was how differently payors handle claims. Some plans are more straightforward, while others may apply closer review to modifiers, adjust coding, or deny claims even when the service appears clinically appropriate and well documented.

The complexities with claims, and how each payor uniquely deals with claims, are only exacerbated in dermatology. Take Modifier 25 as an example. In dermatology, it’s common to evaluate a patient medically while also performing a procedure during the same visit. Clinically, that may be completely appropriate. Operationally, however, those claims are increasingly flagged for review.

What makes this even more challenging is that many insurers are now using AI-driven review systems to evaluate claims at scale. According to the American Medical Association, some AI-based review tools have generated denial rates dramatically higher than historical norms.

These AI-powered adjustments by payors change the environment independent physicians are operating in. The appeals process takes time. Documentation requests take time. Fighting downcoded claims takes time. And in a small practice, that time usually comes directly out of patient care, administrative bandwidth, or personal hours after clinic.

One lesson I learned quickly is that strong documentation upfront almost always saves time later. If a patient note clearly supports the complexity of the visit and the rationale for procedures performed, you are in a much stronger position if a claim gets questioned by a payor.

Practices need to think about AI the same way payors already do

I think many independent practices are still approaching AI cautiously, while payors clearly have already integrated it deeply into their operations. Whether physicians like it or not, AI is now a major part of the reimbursement landscape. Because of that, practices also need to start thinking strategically about where AI can support the revenue cycle.

For many, the most promising use case right now is pre-submission claim review. If technology can flag a missing documentation element, modifier issue, or bundling concern before a claim is submitted, that has real operational value. I would much rather identify a problem before the claim leaves the office than spend weeks trying to overturn a denial afterward.

I also see meaningful potential in AI scribes and administrative workflow tools. Documentation remains a primary driver of physician burnout. While independent practices often face a heavier administrative burden due to limited support staff, documentation challenges are pervasive across nearly all clinical settings. If AI can reduce after-hours charting, streamline prior authorization workflows, or improve patient communication efficiency, those are practical benefits worth paying attention to.

At the same time, I don’t think physicians should adopt every AI tool simply because it’s available. The best approach is probably the same framework we use in medicine: Understand the evidence, evaluate where a tool genuinely improves outcomes or efficiency, implement it carefully, and monitor results over time.

Build the operational foundation early

Independent practice can still be incredibly rewarding. But the business side of medicine is becoming more complex every year. We are seeing a shift toward more stringent payor practices, coupled with a steady increase in administrative demands. At the same time, AI is enabling the processing of claims with greater speed and at a larger scale.

Still, to succeed amid the swiftly evolving health care landscape, emerging independent practices can and must prioritize a strong financial health strategy long before they see their first patient.

The physicians who succeed long term will not necessarily be the ones trying to manage every operational challenge themselves. In many cases, they will be the ones who build the right systems, workflows, and partnerships early so they can stay focused on patient care.

Tagai Musaev is a dermatologist.