Published: November 4, 2010
Doctors working solo or in small groups are at a disadvantage in negotiating reimbursement rates with insurers. These same practices have seen flat reimbursement rates while costs have risen due to new expenses such as electronic medical records.
Rather than merge a small practice with other doctors or a health care system, as some already have done, a different business model is catching on.
With an independent practice association, a group of doctors pool resources and collectively bargain with insurers and vendors while remaining independent.
The Manhasset-based Beacon IPA has grown to nearly 200 doctors since it was founded this summer, expanding more quickly than its organizers expected.
“This is a very good alternative where we can come together, provide value and clinical benefit and work to become a strong organization,” said Beacon President Dr. Simon E. Prince, who is also president of North Shore Nephrology in Manhasset and immediate past president of the Medical Staff Society at North Shore University Hospital in Manhasset. “Our model allows everybody to keep their independent practice and do what they want to do to their highest ability. Yet it still allows us a framework to come together in numbers, affect change and have higher-level discussions with payers.”
Jill Hummel, vice president of provider engagement and contracting for Empire BlueCross BlueShield, said although her company doesn’t only look at a practice’s size, larger practices often obtain “enhanced reimbursement” for certain measures.
“I think in some ways we are rewarding the larger groups, not just because they’re large,” she said. “It’s the value they bring to the table.”
That is so because large practices often are able to provide better care through electronic medical records, 24/7 access, prescribing generic prescriptions and other services, Hummel said.
Beacon is one of a still small number of Long Island IPAs, including Valley Stream’s South Shore Health System and Garden City-based Healthcare Partners.
Prince said the process of starting these groups is complex. Although they face state regulations, additional pressures make them more attractive.
“It’s very difficult for a small practice to survive. That’s why there’s so much consolidation,” he said. “That’s the economic reason. There’s utility in other things. We have autonomy, self-governance.”
Esther Horowitz, vice president of provider relations for 600-physician South Shore Health System, said her group obtained several reimbursement rate increases over the past few years while many doctors’ rates fell or were flat.
“We are an advocate for the physicians. We look at not only better reimbursement, but how to maintain their independence,” she said. “We have the clout to negotiate for our doctors for better treatment, rates and opportunities.”
Beacon, which hopes to be funded by receiving a portion of rate hikes it negotiates as well as dues, already is putting together best practices and negotiating on behalf of physicians.
“If I go as an individual practitioner and call an electronic medical record company, the price is prohibitive,” said Dr. Michael Ditkoff, an ear, nose and throat surgeon in Manhasset and Beacon member. “Now with this group, we’re negotiating to get a better rate. They’re getting a higher volume of physicians.”
Ditkoff said the group hopes to negotiate better deals with billing companies and provide better care by analyzing data from various practices.
Prince said even if physicians choose different electronic medical records, the group expects to analyze their information to help them qualify for up to $44,000 in federal money for providers who prove they’re using data to improve medical care.
“There’s a pressure, real or perceived, that if you’re not part of a group, you’re going to be left behind. You’re not going to be able to survive,” Ditkoff said. “I could’ve kept going the way I’m going. But the way things are going, every year it gets harder and harder. Everyone’s joining someone.”
Ditkoff said some physicians are merging their practice into bigger entities. Large multipractice groups such as ProHealth in Lake Success also provide strength in numbers. But he believes an IPA provides freedom and financial benefits.
Prince said Beacon will set basic medical standards for members, while leaving a great deal of latitude to doctors in terms of their practice.
“If you’re not providing quality care and doing what we expect through our guidelines, you’ll be asked to leave,” he said.
While Ditkoff believes small practices play an important role in providing care, he said without strengthening their position, they will remain at a disadvantage in negotiating rates.
“They’re not going to sit down with each practitioner,” Ditkoff said of insurers. “I can barely get them on the phone to talk about a patient let alone my rates.”