Health Care

Professional Employer Organization (“PEO’s”) and Medical Practices

January 16, 2015

As medical practices continue to face increasing costs, there are only so many areas where additional cost savings can be realized. Employees will continue to get annual salary increases, landlords will continue to pass through rent increases and pharmaceutical companies will continue to raise drug costs. Medical practices, like most small to mid-size businesses, have also seen annual double-digit increases in the cost of employee health insurance. By joining a professional employer organization (a “PEO”), a medical practice may be able to reduce their employee-related costs and also reduce the administrative burden of the practice. PEOs partner with businesses, such […]

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Hospitals Continue to Create Their Own Health Plans

November 10, 2014

As the old expression goes, “history has a way of repeating itself”. In the 1980’s and 1990’s, “managed care” became the buzzword as hospital-based health systems, with such venerable names as Kaiser Permanente, Geisinger Health and Intermountain Healthcare, began to create their own health plans. These plans were for the most part a hybrid of health insurance plans and HMO’s. While these hospital-based health systems were successful, and still exist today, there were many more that were not due to their inability to withstand the financial risks associated with managed care. During the last few years, hospitals have again started […]

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Managed Care Contracting

August 26, 2014

Managed care contracting has become increasingly complex as the transition from ‘fee-for-service’ to ‘pay-for-performance’ type models takes hold. Now, a successful negotiating strategy with payers must take into consideration shared risk and shared savings. This has caused providers and payers, who historically have had somewhat adversarial relationships, to start working together collaboratively to find ways to improve patient outcomes and reduce costs. Those practices that have the ability to demonstrate this capability will likely have the greatest success in negotiating their managed care contracts, as well as the greatest likelihood of increasing, or at least, maintaining their current levels of […]

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Adoption of Value-Based Payment Models by Providers

July 30, 2014

Considering that many medical practices are still unsure of the financial benefits that might be realized by their participating in value-based payment models, a recent April 2014 research study by Availity Health Information Network ( still finds that a significant number of providers are participating in such payment models. This is true even with the uncertainty as to the financial risks associated with these new models, questions as to the effectiveness of such models, and the payers’ motives for implementing them. When used in the Availity research study, Value-Based Payment Models (“VBPMs”) refer to payment arrangements that pay physicians, hospitals, […]

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Due Diligence Critical for Hospital Acquisition

April 16, 2014

As Seen in Healthcare Finance News More than ever before, hospitals are very aggressively pursuing the acquisition of medical practices. The activity is so intense that several attorneys and consultants that we know equate the activity to that of a “feeding frenzy.” Once a hospital has targeted a practice for acquisition, it must analyze that practice to determine if, in fact, the practice is as desirable as the hospital initially believed, and if so, at what price. This process of analyzing a practice is called due diligence. When hospitals perform their due diligence in anticipation of acquiring a large practice, […]

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Financial Modeling: A Key Step In Mergers

March 12, 2014

As Seen in Healthcare Finance News Small and medium sized medical groups are confronted with questions of survival on an ever-increasing basis. Health systems are acquiring physician practices, and it is becoming more difficult for smaller practices to compete with these hospital-dominated organizations. So, the options facing many practices today are, “do we (1) sell out; (2) merge into a larger existing physician owned entity; or (3) take on the challenge of being involved in the creation of a new group?” When the decision is made to join or form a larger group, there are several psychological barriers that the […]

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Consolidation & the Independent Medical Practice

January 23, 2014

What are the Advantages of Joining a Physician-Owned Mega-Group? It is no secret that hospitals are actively acquiring independent medical practices throughout New York State. While this may be a viable option for many practices, it is not the only option. Recently, there has been an increase in the number of independent medical practices that are joining together to form larger group practices, commonly referred to as “roll-ups”, “mega-groups” or “super-groups” (we will refer to these groups as “mega-groups” here). Mega-groups can either be the result of a consolidation of practices or the merger of several practices into one larger […]

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Facing The Accountable New World – What Medical Groups Need to Do Today

December 2, 2013

As seen in Group Practice Journal In an effort to improve patient care and reduce healthcare costs, commercial insurers, government agencies, and consumers are now demanding greater accountability from medical practices and other health-care providers. To what can we attribute the sudden pronounced push for accountability? Put simply, with the healthcare sector today accounting for approximately 17 percent of the U.S. economy’s Gross Domestic Product (GDP) and with current estimates projecting this to increase to 20 percent by 2020, this rate of growth is no longer sustainable. Medical practices that expect to participate in new payment and service delivery models […]

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Physician Employment by Hospitals-Part 2

September 24, 2013

Many hospital-physician employment agreements require physicians to maintain certain annual productivity levels, very often measured by their annual work relative value units (RVUs). A Physician may be guaranteed a certain compensation only if they meet a certain annual RVU benchmark. It is not uncommon for the benchmark to be the RVUs generated during a recent 12-month period prior to the commencement of hospital employment. If RVU targets are not met, then compensation may be reduced. Conversely, if RVU targets are exceeded, depending on the agreement, a “bonus” may be paid. Perhaps most important regarding an RVU-based compensation structure is identifying […]

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