Professional Service Agreements - Anyone set one up?

[CaliDr]

Hey all,

As some of you have read, I'm branching out into opening a private practice (yes, I know...it's even scarier to do now given healthcare changes)...

Well, I've managed to pique the interest of one of the main local hospital(s) and have a meeting scheduled in the next few weeks with their board/VPs. We proposed a PSA (Global Payment) and while we are doing our research, we are still learning about PSAs as we read how to set one up (and I assume they are too).

Have any of you done something like this before - to remain independent as a practice entity while setting up a PSA partnership with a hospital? I believe the term is "employment-lite". Our ultimate goal was to bring in ancillary services to the practice, but it appears a PSA might limit this. I would really love to hear if anyone has set something like this up...not exactly something you can google to get concrete answers. I know most on here are either private practice or W2's...but figured I'd ask.

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[drusso]

Hey all,

As some of you have read, I'm branching out into opening a private practice (yes, I know...it's even scarier to do now given healthcare changes)...

Well, I've managed to pique the interest of one of the main local hospital(s) and have a meeting scheduled in the next few weeks with their board/VPs. We proposed a PSA (Global Payment) and while we are doing our research, we are still learning about PSAs as we read how to set one up (and I assume they are too).

Have any of you done something like this before - to remain independent as a practice entity while setting up a PSA partnership with a hospital? I believe the term is "employment-lite". Our ultimate goal was to bring in ancillary services to the practice, but it appears a PSA might limit this. I would really love to hear if anyone has set something like this up...not exactly something you can google to get concrete answers. I know most on here are either private practice or W2's...but figured I'd ask.

Carefully vet any contract with attorneys regarding Stark and anti-Kick-back issues. Your compensation can in no way be tied to volume--directly or indirectly. The hospital or network will pooh-pooh these issues, say that its an overblown concern, offer false reassurance the State AG or Feds are no looking, etc---but they are not on your end of the deal no matter what they say. Get an experienced contract attorney with industry-specific experience in Stark and anti-Kick-back analyses to review the deal. It's really a better deal for the hospital or network to employ you in terms of control of your work and capturing your revenue...never forget this. You are damn right that a PSA will limit your ability to onboard ancillaries: That's the whole point. Why do you think the hospital is talking to you in the first place...

 

[SSdoc33]

so, they give you a global payment per patient, and you keep whatever you dont spend on their care? i anticipate the H&P going like this:

patient: I have severe back pain and leg pain
doc: nope, you are fine. Bill and level 2, buh-bye

OR

patient: my back hurts
doc: ok, here's your pills

 

[CaliDr]

@drusso/ @SSdoc33 Thanks for the feedback. Stark and Anti Kick are my primary concern considering how difficult it is to navigate. You are dead on. Our legal is on board and that is the single most important piece of this proposal...aside from RVU rates. While I agree capturing revenue is great for the hospital, I will not be employed by the hospital...not in a W2 sense - our setup is that we will do the billing, they are Acct receivables, and then based on the agreed upon RVU/Overhead rates, they will reimburse. The idea/goal is that they would cover all of my overhead (lease, supplies, etc.) based on agreed upon monthly amount + reimburse for physician services via RVU agreed upon rate. So two separate payments would come monthly from the hospital. To have close to $0 overhead, even for a temporary one year agreement, is alone a huge plus in our financials as we get up and running. Since we will not be W2 employees, we also do not have a non-compete issue. Again, this is all if we go forward. Ancillaries were our original long-term goal, but if we can't get the patient load up quickly in the first 2 years, justifying expense to get them up and running (PT, UDS, etc.) will be difficult. And they are talking to us because they don't have any pain coverage other than one private pain doc - that does not work full-time and has a less than desirable reputation. Plus, I have experience in running a wellness clinic with all specialties and I think they want to start one as well.

I have no doubt there are upsides and downsides to the PSA, but given the necessary runway needed to get a pp off the ground + the recent reimbursement rate changes for in-office, it is definitely something we have calculated as potentially good in the long-term (better patient pool, partner network of providers from day 1, additional options for directorship/consulting, beneficial to community, overhead paid). If this was a 2+ year old practice, this would be a much different conversation.

SS, ha. I don't doubt that happens somewhere. Payment is made through RVU rates that are established based on "market rate" - and would be agreed upon in advance. I'm currently in a similar arrangement working with a large medical group. One of the biggest concerns...that I can tell right now...is that in this PSA setup we would function as an extension of the hospital ---> higher overall charges given billing entity to patient --> patient dissatisfaction in rate. But isn't that what Obamacare was meant to do?! F. We planned to do a lot in office given our large office space, but with reimbursements...back to the calculator. Thanks again for the feedback. Jumping into PP now is not as exciting as it was when we were planning this two years ago.