Considering a clinical co-management arrangement?

Want to align more closely with a hospital--without selling your practice or becoming an employee? If so, creating a clinical co-management agreement may be an attractive option, according to a recent article in American Medical News.

Clinical co-management agreements typically involve a group of physicians forming a limited liability company (LLC) that contracts with a hospital to provide specified services (e.g., running a service line) and meet predetermined quality-improvement goals. The physicians can come from various practices or be hospital employees, and must decide among themselves how to distribute payments from the hospital.

The physicians are responsible for paying the startup costs of the LLC, and may either own the entity or be part of a joint venture with the hospital. Thus, the amount of extra income participating physicians stand to earn varies depending on the circumstances. Keep in mind, though, that many of the improvements a co-management group is charged to make--such as improved patient satisfaction or surgery start times--may ultimately improve revenue.

Often trumping profit, a key benefit of co-management arrangements is that they offer physicians more control over the hospital side of their practices. "Physicians can implement protocols that benefit their patients," said lawyer Krist Werling, a partner in the Chicago office of McGuireWoods.

In addition to having solid physician buy-in to enter the agreement, it's critical to obtain legal counsel to make sure the company doesn't violate any Stark or anti-kickback rules by illegally inducing referrals to the hospital.

"This is not something a hospital or physicians would use to increase business or increase volumes," said Robert Cohen, a lawyer and a senior partner with Kutak Rock in Omaha, Neb. "This should be looked at as a way to engage physicians, their expertise and time to improve the quality and operational effectiveness of the hospital."

To learn more:
- read the article in American Medical News