1st Edition

Physician Integration & Alignment IPA, PHO, ACOs, and Beyond

By Maria K. Todd Copyright 2013
    260 Pages 12 B/W Illustrations
    by Productivity Press

    Today, with physician and hospital reimbursement being cut and tied to quality incentives, physicians and health plans are revisiting the concept of integration. Payers are demanding that the industry do more with less without sacrificing quality of care. As a result, physicians again find themselves integrating and aligning with hospitals that have the resources they lack or must develop together.

    Written by an acknowledged expert in the field of physician integration and managed care contracting, Physician Integration & Alignment: IPA, PHO, ACOs, and Beyond examines physician integration and alignment in the current healthcare market. It outlines the common characteristics of integrated groups and various organizational structures, and also explains how you can avoid making the same mistakes of the past. Filled with suggestions and ideas from successfully integrated practices, the book:

    • Identifies industry drivers for the resurgence of integrated models and the need for aligned models
    • Provides a look at the common characteristics of integrated and aligned groups and how the components can work together
    • Discusses antitrust and other regulatory concerns present when considering the right organizational and management structure
    • Offers time- and money-saving checklists, lessons learned, models, and templates—saving you thousands of dollars in consulting fees

    Maria K. Todd provides readers with the vision and practical tools needed to organize their business entities in a manner that will maximize economic clout and provide quality of care for both the hospital and physician group. This much-needed resource includes helpful insights on topics such as declining physician reimbursement, declining margins, physician shortages, physician-hospital competition, rising practice investment requirements, the return to capitation as a payment mechanism, and recent changes in the relationships between physicians and health systems.

    Maria currently is the principle of the largest globally integrated health delivery system in the world with over 6,000 hospitals and 85,000 physicians spanning 95 countries. She has developed more than 200 integrated and aligned IPAs, PHOs, ACOs, MSOs and healthcare clusters in her career.

    INTRODUCTION TO PROVIDER ORGANIZATIONS

    The Goals and Objectives of Physician Alignment and Integration: Form Follows Function

    Independent Practice Associations (IPAs)
    Second-Generation IPAs
         Step 1
         Step 2
         Step 3
         Step 4
    Financing and Managing the IPA
    Picking Your Consultants
    Operations Management for the IPA
         Administrative Staffing for the IPA
         Governance Issues for the IPA
         Start-Up Capital
         Solvency Standards
         The Steering Committee
         The Bylaws Committee
         Membership Committee
         Utilization Management Committee
         Quality Assurance (QA) Committee
         Finance Committee
         Credentialing Committee
         Other Concerns Relevant to Prequalification for Membership
         Access Issues
         Medical Records Review
         Recertification and Recredentialing
         Grievance Policies
         Other Operational Issues

    Physician Hospital Organizations (PHOs)
    PHO Revenue Allocation
    PHO Direct Contracting
    Negotiation and Projection Hindrances
    Differences in Administrative Style among Members
    Managed Care Contracting with Payors
    Governance Issues: Control
    Medicare Anti-Kickback and Practice Acquisitions

    Accountable Care Organizations (ACOs)

    Management Services Organizations (MSOs)
    Three Basic Elements of MSOs

    INTEGRATED HEALTH DELIVERY SYSTEM DEVELOPMENT

    The Steering Committee Gets Busy: Step-by-Step Instructions for What to Do and How to Do It
    Steering Committee Task List
         Background/Understanding of Task
              Develop a Statement of the Committee’s Purpose
         Approach
         Development of the Shared Vision
    Organizational Development of the IPA
    Organizational Development of the MSO Required of the Steering Committee
    Market Focus
    Development of a Business Plan

    Corporate Form: A Myriad of Choices
    Organizing the Steering Committee
         The Multi-Specialty IPA or PHO
         The Single-Specialty IPA or PHO
         The Management Services Organization (MSO)
         General Partnerships
              Disadvantages of General Partnerships
         Limited Partnerships
              Advantages of Limited Partnerships
              Disadvantages of Limited Partnerships
    Corporations
         Advantages of Corporations
         Disadvantages of Corporations
    The Subchapter S Corporation
         Disadvantages of S Corporations
    Double-Taxation Considerations
    The Limited Liability Corporation (LLC)
    Other Concerns of the Steering Committee

    Guidance for the Utilization Management and Quality Improvement Steering Committees
    First Things First
         Utilization Management Program Outline
         Quality Improvement and Assurance Program
         Activities to Study and Frequency of Each Study
              Frequently Asked Questions by the Health Plans (Don’t be caught without an answer!)
         Documentation Quality
         Adverse Outcome Review

    Network Financial Management: The Intersection of Finance, Utilization Management and Capitated Risk Management
    Finance Reports
    Utilization Management Reports
    Additional Monitoring Reports

    Provider Organization Credentialing and Privileging
    Typical Managed-Care Provider Organization Representations and Warranties
    Provider Expectations
    Practitioner Requirements
    Non-Physician and Provider Requirements
    The Credentialing Process
    Delegated Credentialing
    Acknowledgment

    The Credentialing Committee’s Assignment: What to Do and How to Do It
    Due Diligence in Credentialing
         Vicarious Liability
         Master and Servant Liability
         Ostensible Agency
    Structuring a Good Credentialing Policy
    "Provider Application for Credentialing"
         General Information
         Licensing/Certifications/Registration Numbers
         Hospital Privileges
         Professional Liability Coverage (at the time this application is completed)
         Disciplinary Actions
         Professional References
         Office Information

    Antitrust Compliance Task Force: Understanding Antitrust Concerns for Provider Networks
    What Are the Antitrust Laws?
    Terms Used in the Guidelines
    The Federal Guidelines of Antitrust Enforcement Policy in Healthcare
         Statement 4: Providers’ Collective Provision of Non-Fee-Related Information to Purchasers of Healthcare Services
         Statement 5: Providers’ Collective Provision of Fee-Related Information to Purchasers of Healthcare Services
         Statement 6: Provider Participation in Exchanges of Price and Cost Information
         Statement 7: Joint Purchasing Arrangements among Healthcare Providers
         Statement 8: Physician Network Joint Ventures
    Use of the Messenger Model to Negotiate an Agreement with a Payor
         Characteristics of the Arrangement
         Legality of the Arrangement
    Variations on the Messenger Model
    Non-Integrated Network that Presents and Discusses Non-Fee Related Information and Uses the Messenger Model for Financial Arrangements
         Case Scenario
         Legality
         Variation on the Arrangement
         Legality
         Variation on the Arrangement
         Legality
    Qualified Managed Care Plans (QMCPs)
         How the QMCP Concept Came About
         Substantial Financial Risk Must Be Shared
    Agency Analysis of Physician Network Joint Ventures that Fall Outside These Antitrust "Safety Zones"
    Statement 9: Multi-Provider Networks
    Shared Substantial Financial Risk
    No Sharing of Financial Risk
    Rule of Reason Analysis
         Selective Contracting
         Messenger Models
    Useful Addresses and Telephone Numbers

    Business Plan Development
    Model Business Plan
    The Executive Summary
         Company Direction
         Company Overview
         Objectives
         Capital Requirements
         Management Team
         Service Strategy
         Market Analysis
         Customer Profile
         Competition
         Risk
         Marketing Plan
         Marketing Strategy
         Advertising and Promotion
         Public Relations
         Financial Plan
         Conclusion
    Financial Plan
         Assumptions
         Gross Profit Analysis
         Budget—Income Statements
         Balance Sheets
         Cash Flows Statements
         Break-Even Analysis
         Capital Requirements
         Use of Funds
         Exit/Payback Strategy
    Conclusion
    Keeping Your Infant Business Competitive: Non-Disclosure Agreements
    Sample Non-Disclosure Agreement

    Guidance for the IT Committee

    BUSINESS DEVELOPMENT: CONTRACTING AND MARKETING

    Contracting with Payer Organizations

    Contracting for Capitation and Bundled ServiceArrangements
    Capitation
    Capitation Demographics Analysis
    Services
    Dealing with Unpredictable and Unmanageable Risk Reinsurance
    Dividing the "Pie"
    Fee Schedules
    Case Rates
         The Moral of the Story

    Understanding Capitation Performance Guarantees

    Considerations for Reinsurance Purchases for the Integrated
    Health Delivery System
    Covering the Remainder
    Policy Key Features
         What to Consider when Buying Capitated Stop Loss/Reinsurance from a Private Insurer
         What to Consider when Buying Coverage from an Insurance Company
    Dealing with Managing General Underwriters (MGUs)
         What to Consider when Purchasing from a Managing General Underwriter

    Opportunities in Delegated Utilization Management and Claims Management for the MSO
    Claims Payment Responsibilities (Delegated ClaimsPayment)
    Utilization Management (Delegation of UtilizationManagement)

    Beyond Traditional HMO and PPO Contracts: Direct Contracting with Employer-Sponsored Health Benefit ERISA Plans
    More ERISA Plans than NCQA-Accredited HMOs and PPOs
         Demystifying Covered and Non-Covered Services
    Wrap SPD Document Requirements

    Appendices:
    Volunteer Committee Survey Form
    Sample LLC Document Set
    How to Hire the Right Consultants

    Biography

    Maria K. Todd has been involved in the healthcare industry for most of her working life. She has maintained an independent consulting practice since 1986 and has offered guidance to thousands of clients worldwide in the domains of managed care, healthcare revenue cycle, hospital and medical group administration, physician employment contracting, organizational development, medical tourism, healthcare benefits management, and value-based purchasing.

    With her multifocal background and education as a healthcare business administrator, health law paralegal, surgical nurse, HMO provider relations coordinator and certified mediator, and a licensed insurance producer, she has expertise in niche areas such as full-risk capitation, managed-care contracting, and negotiating on behalf of payers, providers, and employers. She brings a wealth of specialized knowledge to the development, implementation, and operation of IPAs, PHOs, MSOs, and other integrated health delivery systems. She draws upon this extensive experience to bring value to physician groups, boards of directors, and ministries of health in more than thirty countries as a teacher, author, speaker, and consultant.

    In 2009, she filed for and, after four denials and appeals, successfully prevailed in registering a trademark for a new term of art in the industry for the Globally Integrated Health Delivery System®. The U.S. Patent and Trademark Office accepted her application in August 2010, granting trademark registration to define the term to describe a game-changing organizational structure and function that converges integrated health delivery, key principles of managed care, patient access, care continuity, electronic health information technology for global electronic exchange of health information to improve quality of healthcare, and health travel/medical tourism. The model is now in operation as Mercury Healthcare International, and is positioned to accommodate the healthcare needs of a flatter, more mobile, global society. Todd’s previous consulting projects have resulted in the launch and implementation of more than 150 successful IPAs, PHOs, and MSOs in medical, surgical, behavioral health, complementary and alternative medicine, and ancillary service providers. She has provided expert testimony and supported forensic economists in litigation on failed IPAs, PHOs, and MSOs projects; provided support to private equity investors and market analysts; collaborated with other business consultants and attorneys to help develop private placement memoranda for IPAs, PHOs, and MSOs; provided expert testimony for antitrust litigation brought by "locked-out" IPA and PHO providers; and mediated disputes between payers and provider organizations, and between hospitals and physicians developing PHOs. A frequent speaker in the United States and abroad, and a former member of the McGraw-Hill Healthcare Education Group’s seminar leaders, Todd speaks before numerous state, national, and local organizations; government agencies; hospitals; and provider groups. She is available for in-house training sessions on a variety of topics related to managed healthcare, capitation, provider and network contracting, and integrated delivery system development and management. You may reach her at her office in Denver, Colorado, at (800) 727-4160, or via email at [email protected].