Passionate about your Success - COA · April 19, 2012 Presented by: Michael J. McCaslin, CPA Health Care Team ... Hospital Outpatient Services. Bundled Payment Pilot Type of Services

+ Passionateabout yourSuccess

California Orthopaedic Association Annual MeetingApril 19, 2012

Presented by:

Michael J. McCaslin, CPAHealth Care Team

Private Practice Perspective & Delivery Model Impacts

PRIVATE PRACTICE PERSPECTIVE &

DELIVERY MODEL IMPACTS

What Environment Are We In? &

What is Different Today?

The Health Care Environment

1990s 2010+PHOs ACOsCapitationShared SavingsGPWW Umbrella/Divisional MergerIntegrated Delivery Integrated Health Care

System SystemPCP Gatekeeper PCP Medical HomeBundled Payments Bundled Payments Volume ValuePPMC ????

Competitive Positions

Insurance Companies have Anti-Trust Protection (at least to date for most part)Hospitals Use –

Tax Exempt Financing Same Service Payment Differentials (HOPD/APC)AHA Protects All Plus Hides Behind “Tax Exemption” to Generate Profits Without Tax Consequences (Income taxes, Property taxes, Real Estate taxes & Sales taxes)

Competitive Positions

Physicians Constrained by More Federal Regulation Known to Mankind Over Limitation of Practicing in “Group Practice” & Ownership of Hospitals, GPOs, PODs, etc.

One of Most Significant Barriers to Successful Strategies – Stark and Anti-Kickback Statute

What are the Buzz Words or Phrases?

Disease Management /Chronic Care ManagementCare Coordination (Fewer Hospital Admissions, Fewer Re-admissions)Value Based PaymentsMedical HomesManagement of Targeted PopulationsEvidence Based Medicine

What are the Buzz Words or Phrases?

Targeted Cost SavingsDischarge PlanningInteroperable EHRImproving Health of PopulationsReducing per Capita CostBundled Payments

What are the Private Practice Options?

Competitive Positions

Physician to Physician Only Strategies: SoloSmall GroupMerger with Other Physicians/Group –“All In”Umbrella/Divisional Merger – “Kind of In”

INTEGRATION STRUCTURE

ManagementServices

Organization / CBO

Partially Integrated Model

GroupA

GroupD

GroupE

GroupC

GroupB

Old PCA

Old PCE

Old PCB

Old PCC

Old PCD

ASCA

RealEstateLLC D

All RevenueAll Expenses

One Division = Entity

Fully Integrated Model

Old PCA

Old PCE

Old PCB

Old PCC

Old PCD

ASCA

RealEstateLLC D

Assets

Assets

Assets

Assets

Assets

INTEGRATION STRUCTURE

Physician Hospital Alignment Strategies

Medical DirectorshipsService Line Co-ManagementGain SharingBundled PaymentsPseudo EmploymentClinical Integration ACOs (Accountable Care Organizations)Employment

MANAGEMENT STRUCTURE

PhysicianGroup(Or LLC)

“Manager”

HOSPITAL

ContractedManagement

Services

Fixed & IncentiveCompensation

Single Group and Hospital“Management Services Agreement” Structure or “MSA”

MANAGEMENT STRUCTURE

ManagementCompany

LLC“Manager”

HOSPITAL

ContractedManagement

Services

Fixed & IncentiveCompensation

Groups

Multiple Groups and Hospital“Management Services Agreement” Structures or “MSA”

Ownership

MANAGEMENT STRUCTURE

ManagementCompany

LLC“Manager”

HOSPITAL

ContractedManagement

Services

Fixed & IncentiveCompensation

Groups

Multiple Groups and Hospital

OwnershipOwnership

“Co-Management” Structure

MANAGEMENT STRUCTURE

ManagementCompany

(LLC)“Manager”

HOSPITALPhysicianOwners

OrthopedicService Line

Steering Committee

Senior LeadershipCEO / COOCMO / CNO Service Line Manager

Facilitator / Director

Clinical MedicalDirectors (“CMD”)

ContractedManagement

Services

Fixed & IncentiveCompensation

Sub-Committees

HospitalRepresentatives

PhysicianRepresentatives

Alignment Strategies

Bundled Payment / Pricing Initiative

Bundled Payment Pilot

Type of Services Included in Bundle: Physicians’ ServicesInpatient hospital Services (Episode anchor)Inpatient Hospital Readmission ServicesLong-term Care Hospital Services (LTCH)Skilled Nursing Facility Services (SNF)Home Health Agency Services (HHA)Hospital Outpatient Services

Bundled Payment Pilot

Type of Services Included in Bundle: (Cont’d)Independent Outpatient Therapy ServicesClinical Laboratory ServicesDurable Medical EquipmentPart B Drugs

Payment from CMS to Providers:Traditional FFS (Ultimate Reconciliation with Predetermined Target Price)

ALIGNMENTSTRATEGIES

• Employment Model

PhysicianGroup

Entity / PC

HOSPITAL

This Entity “Winds Down”

Sells Assets

Moves Staff

Moves Physicians

Physician Enterprise

Employed Physicians and Staff

Foundation

ALIGNMENTSTRATEGIES

• PSA Models (Pseudo Employment)– MSA / Reverse MSO

PhysicianGroup

Entity / PC

HOSPITAL

This Entity Continues Only

as MSO

LEASES Assets PhysicianEnterpriseLEASES Staff

Moves Physicians

Employed Physicians

MSAManagement

Services Agreement

ALIGNMENTSTRATEGIES

• PSA Models (Pseudo Employment)– PSA Model

PhysicianGroup

Entity / PC

HOSPITAL

Sells Assets

PhysicianEnterprise

Moves Staff

LEASES Physicians

Employed Staff

This Entity Continues Only

as PSO

PSAProfessional

Services Agreement

Foundation

ALIGNMENTSTRATEGIES

• PSA Models (Pseudo Employment)– Combined PSA / MSA

PhysicianGroup

Entity / PC

HOSPITAL

This Entity Continues as MSO / PSO

LEASES Assets

PhysicianEnterprise

LEASES Staff

MSAManagement

Services Agreement

LEASES Physicians

PSAProfessional

Services Agreement

Foundation

ALIGNMENTSTRATEGIES

• Employment Model

PhysicianGroup

Entity / PC

HOSPITAL

This Entity “Winds Down”

Sells Assets

Moves Staff

Moves Physicians Physician Enterprise

Employed Physicians and Staff

Foundation

CONCLUSION

“Insanity is Doing the Same Thing

You Have Always Done and Expecting a Different Outcome.”

Albert Einstein

CONCLUSION

“The Problem that Exists in the World Today Cannot be Solved by the Same Level of Thinking

Used that Created Them.”Albert Einstein