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+ Passionateabout yourSuccess
California Orthopaedic Association Annual MeetingApril 19, 2012
Presented by:
Michael J. McCaslin, CPAHealth Care Team
Private Practice Perspective & Delivery Model Impacts
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PRIVATE PRACTICE PERSPECTIVE &
DELIVERY MODEL IMPACTS
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What Environment Are We In? &
What is Different Today?
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The Health Care Environment
1990s 2010+PHOs ACOsCapitationShared SavingsGPWW Umbrella/Divisional MergerIntegrated Delivery Integrated Health Care
System SystemPCP Gatekeeper PCP Medical HomeBundled Payments Bundled Payments Volume ValuePPMC ????
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Competitive Positions
Insurance Companies have Anti-Trust Protection (at least to date for most part)Hospitals Use –
Tax Exempt Financing Same Service Payment Differentials (HOPD/APC)AHA Protects All Plus Hides Behind “Tax Exemption” to Generate Profits Without Tax Consequences (Income taxes, Property taxes, Real Estate taxes & Sales taxes)
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Competitive Positions
Physicians Constrained by More Federal Regulation Known to Mankind Over Limitation of Practicing in “Group Practice” & Ownership of Hospitals, GPOs, PODs, etc.
One of Most Significant Barriers to Successful Strategies – Stark and Anti-Kickback Statute
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What are the Buzz Words or Phrases?
Disease Management /Chronic Care ManagementCare Coordination (Fewer Hospital Admissions, Fewer Re-admissions)Value Based PaymentsMedical HomesManagement of Targeted PopulationsEvidence Based Medicine
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What are the Buzz Words or Phrases?
Targeted Cost SavingsDischarge PlanningInteroperable EHRImproving Health of PopulationsReducing per Capita CostBundled Payments
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What are the Private Practice Options?
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Competitive Positions
Physician to Physician Only Strategies: SoloSmall GroupMerger with Other Physicians/Group –“All In”Umbrella/Divisional Merger – “Kind of In”
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INTEGRATION STRUCTURE
ManagementServices
Organization / CBO
Partially Integrated Model
GroupA
GroupD
GroupE
GroupC
GroupB
Old PCA
Old PCE
Old PCB
Old PCC
Old PCD
ASCA
RealEstateLLC D
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All RevenueAll Expenses
One Division = Entity
Fully Integrated Model
Old PCA
Old PCE
Old PCB
Old PCC
Old PCD
ASCA
RealEstateLLC D
Assets
Assets
Assets
Assets
Assets
INTEGRATION STRUCTURE
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Physician Hospital Alignment Strategies
Medical DirectorshipsService Line Co-ManagementGain SharingBundled PaymentsPseudo EmploymentClinical Integration ACOs (Accountable Care Organizations)Employment
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MANAGEMENT STRUCTURE
PhysicianGroup(Or LLC)
“Manager”
HOSPITAL
ContractedManagement
Services
Fixed & IncentiveCompensation
Single Group and Hospital“Management Services Agreement” Structure or “MSA”
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MANAGEMENT STRUCTURE
ManagementCompany
LLC“Manager”
HOSPITAL
ContractedManagement
Services
Fixed & IncentiveCompensation
Groups
Multiple Groups and Hospital“Management Services Agreement” Structures or “MSA”
Ownership
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MANAGEMENT STRUCTURE
ManagementCompany
LLC“Manager”
HOSPITAL
ContractedManagement
Services
Fixed & IncentiveCompensation
Groups
Multiple Groups and Hospital
OwnershipOwnership
“Co-Management” Structure
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MANAGEMENT STRUCTURE
ManagementCompany
(LLC)“Manager”
HOSPITALPhysicianOwners
OrthopedicService Line
Steering Committee
Senior LeadershipCEO / COOCMO / CNO Service Line Manager
Facilitator / Director
Clinical MedicalDirectors (“CMD”)
ContractedManagement
Services
Fixed & IncentiveCompensation
Sub-Committees
HospitalRepresentatives
PhysicianRepresentatives
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Alignment Strategies
Bundled Payment / Pricing Initiative
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Bundled Payment Pilot
Type of Services Included in Bundle: Physicians’ ServicesInpatient hospital Services (Episode anchor)Inpatient Hospital Readmission ServicesLong-term Care Hospital Services (LTCH)Skilled Nursing Facility Services (SNF)Home Health Agency Services (HHA)Hospital Outpatient Services
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Bundled Payment Pilot
Type of Services Included in Bundle: (Cont’d)Independent Outpatient Therapy ServicesClinical Laboratory ServicesDurable Medical EquipmentPart B Drugs
Payment from CMS to Providers:Traditional FFS (Ultimate Reconciliation with Predetermined Target Price)
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ALIGNMENTSTRATEGIES
• Employment Model
PhysicianGroup
Entity / PC
HOSPITAL
This Entity “Winds Down”
Sells Assets
Moves Staff
Moves Physicians
Physician Enterprise
Employed Physicians and Staff
Foundation
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ALIGNMENTSTRATEGIES
• PSA Models (Pseudo Employment)– MSA / Reverse MSO
PhysicianGroup
Entity / PC
HOSPITAL
This Entity Continues Only
as MSO
LEASES Assets PhysicianEnterpriseLEASES Staff
Moves Physicians
Employed Physicians
MSAManagement
Services Agreement
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ALIGNMENTSTRATEGIES
• PSA Models (Pseudo Employment)– PSA Model
PhysicianGroup
Entity / PC
HOSPITAL
Sells Assets
PhysicianEnterprise
Moves Staff
LEASES Physicians
Employed Staff
This Entity Continues Only
as PSO
PSAProfessional
Services Agreement
Foundation
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ALIGNMENTSTRATEGIES
• PSA Models (Pseudo Employment)– Combined PSA / MSA
PhysicianGroup
Entity / PC
HOSPITAL
This Entity Continues as MSO / PSO
LEASES Assets
PhysicianEnterprise
LEASES Staff
MSAManagement
Services Agreement
LEASES Physicians
PSAProfessional
Services Agreement
Foundation
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ALIGNMENTSTRATEGIES
• Employment Model
PhysicianGroup
Entity / PC
HOSPITAL
This Entity “Winds Down”
Sells Assets
Moves Staff
Moves Physicians Physician Enterprise
Employed Physicians and Staff
Foundation
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CONCLUSION
“Insanity is Doing the Same Thing
You Have Always Done and Expecting a Different Outcome.”
Albert Einstein
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CONCLUSION
“The Problem that Exists in the World Today Cannot be Solved by the Same Level of Thinking
Used that Created Them.”Albert Einstein