Although more hospitals and health systems are employing physicians directly, some healthcare organizations instead are opting for co-management arrangements between hospitals and physician practices.
Driven by changing payment arrangements, including Shared Savings through accountable care organizations and bundled payment models, many organizations are partnering through the alternative co-management model.
The hospital and members of the physician practice typically set up a jointly owned company to manage a service line, according to an article by law firm Akerman Senterfitt, LLP, released last week. The management company and the hospital sign a written agreement about specific job tasks and goals, as well as compensation.
However, the agreement comes with some careful considerations, in which it must follow healthcare statutes and regulations. Keep in mind the following:
- The Stark Law is aimed at preventing a physician from making patient referrals to organizations in which he or she has a financial relationship. However, there is an exception to the rule if the hospital's compensation to the management company is steady and doesn't vary with patient volume or referrals, according to the article.
- The Anti-kickback Statute is aimed at prohibiting payment for referrals for reimbursable services. If the hospital offers the medical staff member an opportunity for ownership interest in the management company, it may violate the Anti-kickback Statute.
- The Civil Monetary Penalties Statute prohibits a hospital from paying a physician to cut services to patients who are entitled under federal benefits. Therefore, be careful that efforts to meet quality benchmarks do not violate the statute.
"Because a co-management agreement involves the payment of compensation to physicians who refer patients to the hospital, the arrangement must be structured properly in order to avoid violation of applicable health care statutes and regulations," notes the article.
To learn more:
- read the article
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