The trend against physician-owned medical practices
It wasn’t that many years ago that each doctor ran a medical practice as they felt best served the needs of providing care in their communities and local hospitals. Thanks to recent changes in reimbursement rules and the increase in compliance tracking and other paperwork, small independent practices, with their smaller staffs, are in danger of becoming as extinct as the dodo.
The new reality is that hospitals are increasingly buying up practices, and often converting them to ‘outpatient’ departments. Of particular concern are those of primary-care physicians, who often see the lowest reimbursement rates often due to the difficulty that independents have keeping up with the plethora of new healthcare insurance and billing rules as well as the need to cut more costs in today’s tighter economy. One trade group has reported that the number of independent providers has declined to 36 percent in 2013, down from 57 percent in 2000.
A few advantages to hospital-owned practice management are letting the hospital deal with the expense of electronic health records and other technologies, as well as regular paychecks. Disadvantages include loss of control over work hours and patient care as well as possibly finding yourself suddenly divested of your practice if the hospital changes policies.
The best of both worlds?
An increasing number of providers choose to consolidate practices and negotiating power by joining an Independent Practice Association (IPA).
IPA – An Independent Practice organization is part of a larger trade group: the IPA Association of America, which claims to represent over 300,000 physician IPA members. Member physicians keep their independence in running their practices, but as part of a larger organization, are able to contract for negotiating more favorable reimbursement rates by insurers as well as in group service contracts.
- Membership in an IPA can offer better negotiation among insurers for higher rates of reimbursements as members receiving more attention from insurers, according to one Connecticut doctor. An IPA or similar organization can also provide access to better software and information technology support as well as negotiate better rates from technology vendors and providers of ancillary services.
- IPAs must be able to assume some financial risk to avoid violating federal anti-trust regulations as well as meet other guidelines. This could result in the IPA members reducing the general reimbursement rates for performing services as well as reducing other costs while improving the quality of patient care.
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On the other hand, some observers believe that the demand for cost-containment and better transparency and quality will force a return to independent providers offering quality care at the best price.
Independent practices that aren’t interested in IPAs will need to analyze and take control of revue sources and expenses. Some recommendations include:
- Asking for co-pays at the time of services
- Improve billing office accountability for timely billing and posting
- Check insurance and referral authorizations
- Look for ways to improve billing and collections, including fee schedules
Because new physicians are more reluctant to put in the long hours often demanded in an independent practice as well as deal with the new reporting regulations, they may find joining a hospital-run practice more attractive. Independents seeking to add physicians could try offering more competitive, personalized benefits than are usually available from bigger facilities, such as relocation expense allowances, signing bonuses or access to practice ownership.
If you find that managing the business end of your practice is taking up an increasing amount of time and paperwork, consider working with an experienced medical billing and services management company. M-Scribe Technologies, LLC, has been helping practices of all sizes and specialties with billing and compliance regulations since 2002. Talk to an experienced consultant about the many options and services available to increase your reimbursement rates while you do what you do best: care for your patients.