South Florida Hospital News
Thursday August 6, 2020
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September 2009 - Volume 6 - Issue 3
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Clinical Integration: Getting a Head Start on a New Era of Medicine

With a significant overhaul to our healthcare system just around the corner, it is quite understandable that physicians and hospitals are holding their collective breaths. Medical professionals cannot help but wonder what the inevitable changes will have on their futures.

At the same time a different type of healthcare reform continues to slowly but inexorably expand its tentacles. It is known as "pay for performance." The concept is to base reimbursement payments for medical care to physicians and hospitals in part upon the achievement of measured standards of success. Many insurers are already contracting providers on a pay for performance methodology. Medicare has developed various pilot projects, currently in process, designed to test whether providing financial incentives for quality performance will improve patient outcomes. Most healthcare experts believe that "pay for performance" is here to stay.

Additionally, health information technology ("HIT") is a driving force in healthcare reform. The expense of purchasing HIT is particularly hard on small practices even taking into account potential incentives offered through the Federal Stimulus Packages. One way for providers to successfully traverse their way through pay for performance plans and to expand their HIT economically is by creating a "clinically integrated system." This is not a new idea, but it has never been done in South Florida. A clinically integrated model is typically a joint venture among physicians and possibly a hospital, collaborating together by using HIT to share patient information and create patient and disease protocols. Such a network, if structured appropriately, can collectively negotiate reimbursement rates with health insurance providers without violating antitrust laws.

Basically, Federal antitrust laws prevent independent physician groups from collectively negotiating reimbursement rates with managed care companies unless there is a valid anti-competitive justification. In the past seven years, three clinically integrated networks in other parts of the country received favorable opinions from the FTC stating that their network can collectively bargain with payors. In each case, the FTC held that the purpose of the network was primarily to improve quality, and the joint negotiation of prices was something that was ancillary but necessary for the effectiveness of the network model.

It is not easy for multi-specialty physicians to collaborate and work together. It takes a major investment of time and effort by all involved. However, there are several successes that show it can be done. Given the likelihood that provider reimbursements will be cut, physicians and hospitals need to seriously consider creating a network which will be in line with the upcoming healthcare reform, will be prepared to provide services under pay for performance arrangements, and will put them in a position to reduce costs and improve quality, without necessarily reducing profits.

Mike Segal is a partner in the Miami office of Broad and Cassel and is chair of the statewide firmís Health Law Practice Group. He can be reached at (305) 373-9400 or msegal@broadandcassel.com. Frederick Segal is a health care associate in the Miami office and can be reached at fsegal@broadandcassel.com.
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