Keys to Success: Forming a Mega Group Practice

There has been a steady pressure on physicians to consider merging practices with their peers. The promise of improved managed care contracts and revenues from new ancillary services has always been a strong motivator.

Now, it is clinical integration and the specter of accountable care organizations (ACOs) that has spurred many physicians to spend their nights and weekends in meetings, contemplating a merger with 20, 30, or more doctors in their specialty.

Unfortunately, there are many more failures than successes when it comes to merging practices.

If you are contemplating going down this road, here is a quick reality check:

  • You will need to trust physicians you may have spent your life competing with.
  • Does your group have a physician leader you can all get behind?
  • Infrastructure – software, workflows, and personnel – will make or break you.
  • The group’s infrastructure will be a “make” or “buy” decision.
  • Reporting on both financial results and clinical outcomes is crucial.

Keys to Success
First and foremost, building the group means building trust among the members (your new partners). Remember that when you join a large group, reimbursements will be distributed to all the physicians by a central office. This might be tough to tolerate for doctors who crave independence.

The other big key to success is building an infrastructure that can support current physicians and attract new ones. Job one is setting up centralized billing and collections: All doctors billing under one Tax ID.

What type of software will the group buy? Will you handle billing and collections “in-house”, or will you outsource? Depending on what choices you make, the costs—one-time, recurring, and intangible—can be significant. A good way to measure costs is that the “unit” cost of providing services from a central business office should go down, not up, as you add physicians (units) to the group.

The challenges of coding, payment posting, reconciliation, and reporting increase exponentially with each added doctor and care center. You need to build the infrastructure inexpensively (think cloud-based solutions) because the group’s physician members will be paying for this infrastructure, most likely through a percentage of their collected revenue.

Most importantly, the infrastructure should provide all the tools necessary to track, measure, and manage each step along the physician revenue cycle:

  • Give care centers sophisticated practice management tools they need to manage patients and data
  • Get claims out cleanly and quickly
  • Payments posted quickly, completely, accurately; ongoing comparison to contracted rates
  • Collections efforts are aggressive, efficient, and measurable
  • Allow for robust reporting at multiple levels (office manager, doctors, group CEO will all have different needs)
  • Guard against errors, payer oversights, theft at all levels
  • Allow for ongoing feedback and improvement
  • Hold all parties accountable: Payers, staff, patients, vendors, and yes, doctors.

You and your physician partners want to create a culture of openness, error reduction, and continuous improvement that has quality patient care as its core value.

Complexities
These aspects of managing the group’s billing and collections process will demand the most attention:

Reconciliation: Insurance companies only separate payments by Tax ID, so the group’s new central business office/practice management system must be able to trace the path of all charges back to their origin. Payments will come back intermingled, meaning the EOB will have a payment for a doctor X at care center Y right above the payment for doctor A at care center B. Reconciling these payments quickly and accurately is critical. Who will do the necessary work to reconcile payments?

The importance of “inheritance”: Every charge should carry all information so that when the payment (or denial) comes back, your system knows exactly which doctor at which care center it belongs to. Many have underestimated this complexity.

Standard reporting: All software has reporting functions. It is critical that all members of a group be on the “same page” – reports must be standardized, regularly generated, and reliable. Reporting must also go beyond the standard financial data and include clinical outcomes.

Group and Individual Impact
Group impact: Nothing short of mission-critical. You can do everything else right, but if you can’t get claims out, if you can’t get reimbursements in, if you can’t get the doctors paid appropriately and on time, the venture will fail. Or worse, if you make bad decisions during the formation, the group will never get off the ground and you will waste a lot of time and money. 

Impact on individual docs: Huge. If the member physicians don’t have faith in the group’s leadership and their ability to create and manage an efficient billing and collections infrastructure, they will leave, new doctors won’t join, etc.

How many of these tips were new to you? For more insightful articles on practice management, medical billing, electronic health records, and more, sign up for our email newsletter today!

 

Brian Foster is a Director of Client Solutions at CareCloud with over 20+ years in the healthcare industry. Throughout the 1990s he was the Publisher of a specialized trade paper for healthcare industry professionals. Since 2001, Brian has worked as a senior business development professional, helping medical practices to provide the highest-quality patient care while simultaneously improving revenues. He can be reached at BFoster@carecloud.com or (786) 879-9200.

Free e-book:

Pros and Cons of In-house vs. Outsourced Medical Billing

Download Now!

Start typing and press Enter to search