In contracting, private firms can find strength in numbers

There is strength in numbers, but liberal doctors who organize to better negotiate contracts with health plans also need legal and other professional resources to build their negotiation platform.

This tip comes from Mike Grodus, who knows best. He is the administrative director of Professional Medical Corp., a Michigan-based physician organization with approximately 460 physicians that provides contract management, business, and technology services to independent physician practices.

Grodus discussed the evolution of physician organizations—also called independent physician associations, and not to be confused with medical associations such as the AMA or state or specialty societies—and their pros and cons. in a recent episode of the “AMA Podcast Thrives in Private Practice ».

You can subscribe to “AMA Thriving in Private Practice” at Apple podcast or anywhere podcasts are available.

Physician organizations allow physicians in private practice to share commercial resources and bargain as a group—with group bargaining power—for their contracts.

Grodus said doctors in private practice should consider using the medical organization umbrella as an effective method of aligning independent practices “where you can have one or two or three doctors coming together on a larger scale to really use this medical organization as a platform to contract with different health plans to really get into these contractual arrangements that would benefit all physicians.

Physicians wishing to join or start a physician organization may need to seek out other professionals who can meet their business needs, are experienced in working with health plans and insurers, and are able to organize themselves with business structures. traditional, he said.

“It’s like a regular business,” Grodus added. “You have to have goals. You must have a mission statement, your core values. We need to have a different governance.

It takes sound clinical judgment as well as a commitment to collaboration and difficult problem solving to succeed in independent environments that are often fluid, and the AMA offers the resources and support physicians need to start and sustain success in private practice.

For example, the AMA has developed a Private Practice Toolkit on Payer Contracts that covers these elements:

Staff from the medical organization can help educate doctors about the different programs and what they need to do to be successful within them.

“Health plans are looking to see what kind of relationship, what kind of infrastructure a practice or physician organization has before they offer a better contract,” he said.

But one of the main reasons for forming a physician organization is to work directly with health plans to seek better contract terms, both in fee-for-service and emerging value-based agreements.

“So you could go out and talk to the health plans in the area and really say, ‘Oh, if we get these doctors together, are you ready? [to negotiate]? Do you have contracts?

Can a physician organization improve private practice compensation? Probably, Grodus said, while noting that these entities don’t just negotiate pay rates under ordinary fee-for-service arrangements.

Most physician organizations or independent physician associations now negotiate value-based contracts that include performance standards and other measures that affect payments. Many health plans already use value-based contracts with hospital systems and large practice groups.

Learn more with the AMA about how value-based care makes payer contracts even more complex.

Paying physician practices better is not the goal of value-based contracts, and doctors shouldn’t expect instant extra income by forming a physician organization, Grodus said. Incentives vary and there are usually additional requirements to ensure access and provide new technologies, such as telehealth. But such contracts, if properly structured, can offer practices the opportunity to receive additional incentive payments if they better manage their patient outcomes.

“There is nothing guaranteed in the value-based world. Payers now want physicians in the game in terms of population management, good service, good timing, lower cost parameters,” he added. WADA has resources on payment models to help physicians weigh their options.

Learn more about the AMA Private Practice Physicians Sectionwhich aims to preserve the freedom, independence and integrity of private practice.