HFMA

Both health systems and medical groups should assess and understand the local physician market to determine their best options. Ten questions for assessing a local physician market are:  What is the physician supply/demand balance in the market by specialty? What types of care are delivered within the market, and what is referred out of the market? Where do cases that leave the market go, and why? What are the referral patterns within the market? For example, do referrals go freely across system lines, or is “leakage” being reduced?  Are referrals influenced by narrow networks, clinically integrated networks, or some groups (for contractual reasons or other factors) not accepting some payer categories? Are some groups deemed to be of higher quality than others? What is the growth or decline in the patient population? How are patient demographics changing? How are physician groups likely to respond to the changes? Are physicians in some groups doing significantly better or worse financially than the market as a whole? How easy is it to recruit physicians to this market? Where does the market stand now in terms of these indicators:         •Medicare cost per member per month?         •Commercial costs per member per month?         •Physician group revenues per RVU, per specialty compared to national benchmarks?      

Most health systems’ key initiatives depend on the involvement of its physician groups (both employed and independent). This tool illustrates the steps in the journey toward population health management and health system sustainability can be made without direct physician involvement.

A successful physician strategy is built upon an understanding of: Perspectives of the health system seeking to develop or refine its physician strategy Perspectives of the medical group and physician practices (both employed and independent) with which the health system seeks to engage Relevant market conditions As a starting point, it is important to understand the perspectives of both health systems and medical groups (employed and independent). Both perspectives are important, and although they share certain common goals, they are not the same. Tool: Examples of Common and Organization-Specific Goals

Issues addressed in this case study include: Moving a physician group from fee-for-service towards a value-based focus Addressing physician compensation changes in a medical group Forming a multi-organizational clinically integrated network (CIN) Sharing finances in a CIN Governing and managing a CIN

Issues addressed in this case study include:  Physician governance within a health system Integrating physician practice and other components of the management team Experiments in identifying population segments and tailoring approaching and resources to these segments Managing the cost/benefit ratio as

This document highlights important updates to the 2015 payment rates to hospitals under the FY15 Inpatient Prospective Payment System final rule.

This document summarizes the revised policies pertaining to payment policies under the Medicare physician fee schedule for calendar year 2015 (CY15). 

HFMA comments the 2015 Medicare and Medicaid Programs: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Physician-Owned Hospitals: Data Sources for Expansion Exception; Physician Certification of Inpatient Hospital Services; Medicare Advantage Organizations and Part D Sponsors: Appeals Process for Overpayments Associated With Submitted Data; Proposed Rule (hereafter referred to as the 2015 OPPS Proposed Rule) published in the July 14, 2014, Federal Register. 

This document provides an overview of the CY15 proposed changes to payment rates under the outpatient prospective payment system (OPPS).

Moving Forward The steps toward finalizing an acquisition or affiliation will differ depending on the degree of integration involved. A basic road map for moving forward is provided below. Initial Actions Engage legal counsel. Regardless of the degree of integration you seek, all acquisition and affiliation approaches can raise legal issues involving antitrust, fraud and abuse, and other state and federal laws and regulations. Approach/engage your potential partners. If your organization seeks to be acquired by another organization in a competitive process, it may engage an advisory firm that will seek detailed proposals from potential acquiring organizations. Less fully integrated affiliation models may be initiated through conversations between leaders of the potential partner organizations, often with the assistance of an advisory firm. Consider the need for a confidentiality agreement in early discussions with potential partners. Commit to going forward. If a merger is involved, the parties will likely sign a letter of intent or memorandum of understanding on the proposed merger. Depending on the size and market impacts of the acquisition or affiliation, a Hart-Scott-Rodino premerger notification filing with the Federal Trade Commission and Department of Justice may be required. The deal will not be able to close until the federally prescribed waiting period has expired or the government grants early termination of the waiting period. State/local laws and regulations may also apply. Due Diligence The degree of due diligence required will vary by approach. A merger will require the greatest extent of access to books and records to confirm the financial viability/desirability of the acquisition. “Cultural” due diligence is also important. If there are significant potential cultural incompatibilities between organizations, their chances of working effectively together, whether as a merged entity or as collaborative partners, can be significantly diminished. Internal Communications Rumors and gossip that can spread among staff in any acquisition or affiliation strategy can easily delay progress or derail the activity altogether. Once your organization has committed to moving forward, it is critical to inform staff on possible impacts of the acquisition or affiliation activity. The two PowerPoint templates below outline key discussion points in fully integrated and less than fully integrated acquisition and affiliation models.   Tool: Communicating with Staff: Full Integration Tool: Communicating with Staff: Less than Full Integration Business Planning While due diligence proceeds, the management teams of the partner organizations should develop: Vision statement Organizational structure Capitalization plan Governance model (powers, roles and responsibilities, reserved powers, voting rights, etc.) Management structure (including, in the case of a merger, the transition team) Early initiatives and priorities Financial projections (including scenarios related to the rate of movement towards value-based payments) Final Agreement The partners should now be ready to negotiate their final acquisition or affiliation agreement. Use the following scenarios to see how different organizations might work through the steps toward an acquisition or affiliation. A stand-alone hospital determines its acquisition and affiliation approach An academic medical center aims for long-term sustainability A multi-hospital pursues a regional strategy and system-wide economies of scale