Independent PP groups can provide a better value than an AMC

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Mman said:
I'm not assuming anything. The AMCs have far higher rates with insurance companies than private groups do. I suspect their median is $150 per unit. It doesn't matter what percentage of your patients are insured, if you can get a higher rate for those patients it helps as great deal.
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What I am saying is that the draw to these AMCs is the buyout they give you. The actual increase in unit rate is pocketed by the AMC. It does not benefit to the doctors in the groups once the buyout has occurred. The profit motive of the AMCs was not to make their buyout partners rich. It's to give them a bunch of cash and then make it up by increasing the unit rate. That model will not be sustainable if we trend to more and more bundled payments.

Quite frankly, I think multi-specialty groups will be the new thing.

And their median rate is not $150/unit. I can promise you that.
 
Ignatius J said:
What I am saying is that the draw to these AMCs is the buyout they give you. The actual increase in unit rate is pocketed by the AMC. It does not benefit to the doctors in the groups once the buyout has occurred. The profit motive of the AMCs was not to make their buyout partners rich. It's to give them a bunch of cash and then make it up by increasing the unit rate. That model will not be sustainable if we trend to more and more bundled payments.

Quite frankly, I think multi-specialty groups will be the new thing.

And their median rate is not $150/unit. I can promise you that.
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It might be higher. I can promise you that. If it isn't $150, it's not much below. I know regular old private groups getting $120 a unit.
 
Ignatius J said:
So have I. You should go slap the person who gave you inaccurate numbers.
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LOL

Tell me what you think they collect per unit on insured patients. Maybe you live in a part of the country that is poor for collections. Anywhere within 1000 miles of me is $150 ish or more.
 
Mman said:
LOL

Tell me what you think they collect per unit on insured patients. Maybe you live in a part of the country that is poor for collections. Anywhere within 1000 miles of me is $150 ish or more.
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I can tell you just based on available data that the average private unit collected in the West, Midwest, and South is $70-80. Tell me where you practice because it looks like we are going to be putting some AMCs out of business here soon.
 
Ignatius J said:
What I am saying is that the draw to these AMCs is the buyout they give you. The actual increase in unit rate is pocketed by the AMC. It does not benefit to the doctors in the groups once the buyout has occurred. The profit motive of the AMCs was not to make their buyout partners rich. It's to give them a bunch of cash and then make it up by increasing the unit rate. That model will not be sustainable if we trend to more and more bundled payments.

Quite frankly, I think multi-specialty groups will be the new thing.

And their median rate is not $150/unit. I can promise you that.
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I think you're missing what he's saying. Mman is not suggesting that the AMCs' higher reimbursement rates go toward the now employed docs. What he's saying is, you're group gets $60/unit, the hospital is threatening to cut your subsidy. The AMCs are interested in buying your practice, and you know they get $120/unit from the insurance companies with whom you are contracted. You go to the insurance company and tell them, "You can start paying us $90/unit, or we're going to sell to the AMC, and you're going to have to pay them $120/unit." The insurance company doesn't want to increase your rate, but they want to pay the even higher rate to the AMC even less, so maybe they'll acquiesce, and you can maintain your income despite a reduced hospital subsidy, without selling out to the AMC.

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Ignatius J said:
I can tell you just based on available data that the average private unit collected in the West, Midwest, and South is $70-80. Tell me where you practice because it looks like we are going to be putting some AMCs out of business here soon.
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Yes, you are correct. But the AMCs get $125-$140 per unit for many of their contracts. We couldn't compete with them and insurance companies just laughed at us when we demanded $80 per unit.
 
BLADEMDA said:
Yes, you are correct. But the AMCs get $125-$140 per unit for many of their contracts. We couldn't compete with them and insurance companies just laughed at us when we demanded $80 per unit.
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Can you explain why the AMCs can negotiate this rate and don't get laughed at by the same insurance companies?
 
Ignatius J said:
I can tell you just based on available data that the average private unit collected in the West, Midwest, and South is $70-80. Tell me where you practice because it looks like we are going to be putting some AMCs out of business here soon.
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Average? WTF does average have to do with anything? I'm in the south and we collect $110 a unit with one of our contracts and over $100 with every other one and we are nowhere near what Mednax and NAPA collect. I know several of the groups Mednax bought out were over $120 a unit. If they weren't higher, they'd have just kept the billing platform from whoever they bought out and billed under that tax ID.

Their rates are off the charts of whatever data you see. They don't report it to anybody that publishes the data.
 
BLADEMDA said:
The same reason Home depot pays $2 for a hammer while the local hardware store owner pays $4.00
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Maybe I'm being obtuse here. What is the leverage that AMCs have in negotiating rates? Why is an insurance company having to accept this? Why don't they say: "we paid $90/unit to Lurch Anesthesiologists so take it or leave it Mednax? It seems like money the insurance company is giving up to the AMC and bad business. What specifically do the AMCs hold over the insurance companies?
 
Lurch said:
Maybe I'm being obtuse here. What is the leverage that AMCs have in negotiating rates? Why is an insurance company having to accept this? Why don't they say: "we paid $90/unit to Lurch Anesthesiologists so take it or leave it Mednax? It seems like money the insurance company is giving up to the AMC and bad business. What specifically do the AMCs hold over the insurance companies?
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Good question. The hospital will cancel the AMC contract faster than people/employers will change insurers.
 
Mman said:
Average? WTF does average have to do with anything? I'm in the south and we collect $110 a unit with one of our contracts and over $100 with every other one and we are nowhere near what Mednax and NAPA collect. I know several of the groups Mednax bought out were over $120 a unit. If they weren't higher, they'd have just kept the billing platform from whoever they bought out and billed under that tax ID.

Their rates are off the charts of whatever data you see. They don't report it to anybody that publishes the data.
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You are still wrong on this. As your originally stated, I have enough information I feel available to me to say that your "median value for an AMC unit is $150" is woefully incorrect. Big time.
 
Lurch said:
Maybe I'm being obtuse here. What is the leverage that AMCs have in negotiating rates? Why is an insurance company having to accept this? Why don't they say: "we paid $90/unit to Lurch Anesthesiologists so take it or leave it Mednax? It seems like money the insurance company is giving up to the AMC and bad business. What specifically do the AMCs hold over the insurance companies?
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They do not have much power over insurance companies. They have more power to the private groups by fronting a lot of money and skimming on the back end. The notion that you get a 50% increase in unit value is California dreamin'. They do get more, but not that much more. I can tell you I've seen an AMC outbid at a facility and it didn't require a lot of sacrifice.
 
Ignatius J said:
They do not have much power over insurance companies. They have more power to the private groups by fronting a lot of money and skimming on the back end. The notion that you get a 50% increase in unit value is California dreamin'. They do get more, but not that much more. I can tell you I've seen an AMC outbid at a facility and it didn't require a lot of sacrifice.
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I know for a fact that my AMC collects over $125 per unit. We were lucky to get $75 per unit prior to the take-over by the AMC. Unlike Mman we didn't have much luck in our area of getting anything close to $85 per unit. I can tell you for a fact that the PREMIER hospitals in Florida like Mayo don't get more than $80 per unit; Mman is making a lot of money in his area but that is not the norm in my State.

I can't explain why insurance companies aren't getting smarter about paying private groups 2/3 what the AMCs get in order to avoid those take-overs but right now that isn't the case in the vast majority of my State.

Honestly, selling out to the AMC was the best business decision my group ever made and one I would do over again if I had the opportunity.
 
Lurch said:
Can you explain why the AMCs can negotiate this rate and don't get laughed at by the same insurance companies?
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I'm not sure I buy this either. Why in the world would an insurance company agree to pay the higher rate to an anesthesia company? No one cares who their anesthesiologist is. If the anesthesia group threatens to not take the insurance, who cares. It's not the same as a Cardiology group that is part of Mass General threatening to drop insurance. I think it's more complicated than that and has more to do with corporate back scratching that occurs on a much higher level than we realize.
 
GravelRider said:
I'm not sure I buy this either. Why in the world would an insurance company agree to pay the higher rate to an anesthesia company? No one cares who their anesthesiologist is. If the anesthesia group threatens to not take the insurance, who cares. It's not the same as a Cardiology group that is part of Mass General threatening to drop insurance. I think it's more complicated than that and has more to do with corporate back scratching that occurs on a much higher level than we realize.
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Okay. I don't know the in's and outs of the insurance business but I can tell you Groups all over Florida have sold or are selling out in record numbers. Those AMCs are collecting up to 50% more per unit over the former rates allowing the AMC to make a nice profit. Why in the heck do you think they are so willing to buy groups up? Just to "break-even over 5 years? Please. These guys want to break even in 3-3.5 years and actually make a nice profit at 5 years out. They may be greedy but they aren't stupid.
 
BLADEMDA said:
I know for a fact that my AMC collects over $125 per unit. We were lucky to get $75 per unit prior to the take-over by the AMC. Unlike Mman we didn't have much luck in our area of getting anything close to $85 per unit. I can tell you for a fact that the PREMIER hospitals in Florida like Mayo don't get more than $80 per unit; Mman is making a lot of money in his area but that is not the norm in my State.

I can't explain why insurance companies aren't getting smarter about paying private groups 2/3 what the AMCs get in order to avoid those take-overs but right now that isn't the case in the vast majority of my State.

Honestly, selling out to the AMC was the best business decision my group ever made and one I would do over again if I had the opportunity.
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Not saying I don't believe you, just that we have had very different experiences.
 
BLADEMDA said:
Okay. I don't know the in's and outs of the insurance business but I can tell you Groups all over Florida have sold or are selling out in record numbers. Those AMCs are collecting up to 50% more per unit over the former rates allowing the AMC to make a nice profit. Why in the heck do you think they are so willing to buy groups up? Just to "break-even over 5 years? Please. These guys want to break even in 3-3.5 years and actually make a nice profit at 5 years out. They may be greedy but they aren't stupid.
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I guess I'm saying you underestimate these insurance corporations. They aren't just going to say "OK NAPA, we'll pay 3x as much for anesthesia services just because you are bigger than the small group you took over." That makes zero logical sense. These insurance companies are ALOT bigger and more influential than these AMCs will ever pretend to be. Something is happening on a higher level and may have more to do with corporate nepotism than anything else. No one cares about anesthesia services. Anesthesia is like getting a sweet add-on when you buy a new car. It is inconsequential with the real deals that insurance companies are negotiating.
 
Ignatius J said:
You are still wrong on this. As your originally stated, I have enough information I feel available to me to say that your "median value for an AMC unit is $150" is woefully incorrect. Big time.
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within 100 miles of me the median is > $150.

On the 2015 ASA survey of commercial rates, rates were reported as high as $195 a unit with several in the $150 range. AMCs aren't even part of this data. You think they get less than the high end of the private group ranges?
 
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GravelRider said:
I guess I'm saying you underestimate these insurance corporations. They aren't just going to say "OK NAPA, we'll pay 3x as much for anesthesia services just because you are bigger than the small group you took over." That makes zero logical sense. These insurance companies are ALOT bigger and more influential than these AMCs will ever pretend to be.
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They don't just say it, but they essentially have to. The way you negotiate with an insurance company is you threaten to go out of network if they don't meet your demands. When that happens, every one of their patients gets a big bill from you for your full charge and then they have to personally pay it and later seek reimbursement from their insurance company. It's hard on you since your time to collection goes up and your collection rate may go down, but it's terrible for the insurance company. Their patients revolt and they likely lose business as employers switch to other insurance companies. We went out of network once and they've never batted on eye on our demands since.

You think they will risk going out of network with an AMC that covers a huge number of cases? Zero chance.

It's all about negotiating and the more cases you do per year, the more leverage you have. AMCs have massive leverage.
 
Mman said:
They don't just say it, but they essentially have to. The way you negotiate with an insurance company is you threaten to go out of network if they don't meet your demands. When that happens, every one of their patients gets a big bill from you for your full charge and then they have to personally pay it and later seek reimbursement from their insurance company. It's hard on you since your time to collection goes up and your collection rate may go down, but it's terrible for the insurance company. Their patients revolt and they likely lose business as employers switch to other insurance companies. We went out of network once and they've never batted on eye on our demands since.

You think they will risk going out of network with an AMC that covers a huge number of cases? Zero chance.

It's all about negotiating and the more cases you do per year, the more leverage you have. AMCs have massive leverage.
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So pp groups that are located in the same region should all form networks to negotiate better insurance rates collectively. That way the "going out of network" represents more of a threat to the insurance company.

On the other hand, if insurance companies are so big relative to AMCs as others have said, then they shouldn't be caving to threats of AMCs going out of network anway in response to their lidicrous rate requests. Something isn't adding up.
 
BLADEMDA said:
Honestly, selling out to the AMC was the best business decision my group ever made and one I would do over again if I had the opportunity.
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That's the bottom line and that's the future of anesthesiology! People at the end of the day will do what makes sense to them financially and all the sweet rhetoric about not screwing the non partners and maintaining private groups is just BS.
 
Many PP groups have merged to negotiate better rates, etc. The problems come with the integration of the practices and financial decision making. Two good sized groups joined in my area. They cover many of the suburban hospitals (i.e. The insured) and make a killing. They would likely be a very pricey buy out.


--
Il Destriero
 
Mman said:
They don't just say it, but they essentially have to. The way you negotiate with an insurance company is you threaten to go out of network if they don't meet your demands. When that happens, every one of their patients gets a big bill from you for your full charge and then they have to personally pay it and later seek reimbursement from their insurance company. It's hard on you since your time to collection goes up and your collection rate may go down, but it's terrible for the insurance company. Their patients revolt and they likely lose business as employers switch to other insurance companies. We went out of network once and they've never batted on eye on our demands since.
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Unfortunately patients also complain to the hospital which then in turn passes the complaint along.
 
IlDestriero said:
Many PP groups have merged to negotiate better rates, etc. The problems come with the integration of the practices and financial decision making. Two good sized groups joined in my area. They cover many of the suburban hospitals (i.e. The insured) and make a killing. They would likely be a very pricey buy out.


--
Il Destriero
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There is no difference between "merged private groups" and AMCs from the perspective of new anesthesiologists! They both try to monopolize the local market, make money for their shareholders, and screw the new guys!
 
Planktonmd said:
There is no difference between "merged private groups" and AMCs from the perspective of new anesthesiologists! They both try to monopolize the local market, make money for their shareholders, and screw the new guys!
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Disagree. There are private practices out there that have merged together and have no intent of ever becoming an AMC.
 
Planktonmd said:
The illusion of partnership 😉
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not an illusion if it is true. Listening to the doom and gloomers, I'd have never taken my current job because they had a partnership track and a buy in. Then again, all the great jobs do. You just gotta have the inside info to know if it's a real offer or just a scam.
 
Lurch said:
So pp groups that are located in the same region should all form networks to negotiate better insurance rates collectively. That way the "going out of network" represents more of a threat to the insurance company.
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Yes, but you have to be truly merged into one group. There are laws against separate groups collectively bargaining for a better rate, it's called collusion.
 
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Planktonmd said:
There is no difference between "merged private groups" and AMCs from the perspective of new anesthesiologists! They both try to monopolize the local market, make money for their shareholders, and screw the new guys!
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I was a new guy not to long ago and joined a PP group and did not feel screwed at all. Was making significantly more my first full year out than any of these AMC offers I am seeing. The partners did make more than me but I felt I was being paid fairly for the work I was doing and looking back know that I am a partner my perspective has not changed.

I do agree with you that PP groups that act like AMCs are no different than AMC. But in my experience those PP groups are the minority.
 
Mman said:
Yes, but you have to be truly merged into one group. There are laws against separate groups collectively bargaining for a better rate, it's called collusion.
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not sure of the exact legalities, but my group is part of a larger conglomerate of seven local private groups who band together to get better rates on benefits (insurance, retirement, etc). together we own a billing company and get better billing rates than the other groups in town. We are all separate corporations and make our own clinical, business and management decisions. All of these groups have true, honest, transparent partnership tracks.
 
B-Bone said:
not sure of the exact legalities, but my group is part of a larger conglomerate of seven local private groups who band together to get better rates on benefits (insurance, retirement, etc). together we own a billing company and get better billing rates than the other groups in town. We are all separate corporations and make our own clinical, business and management decisions. All of these groups have true, honest, transparent partnership tracks.
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I'm assuming legally you are a single entity. Independent groups are forbidden from collectively bargaining from higher reimbursement.
 
I agree with what was said above. See my other thread in regards to the private group bought out by Sheridan. Their blended unit value with sheridan now is crazy high. It was over 100 before the takeover. This is in the NE. Blade I tried to find a good gig in florida, but the offer I got from a priv group wasn't worth it and most groups were AMCs. There is this one group in Brevard county that has merged and has created a multispeciality practice to try to hold their position against the AMCs. See the link below. It seemed like a good setup/group unfortunately I didn't get the position. More groups should do what they did. I thought it was rather unique after finding out the details.
http://www.bpadocs.com/
 
Stank811 said:
I was a new guy not to long ago and joined a PP group and did not feel screwed at all. Was making significantly more my first full year out than any of these AMC offers I am seeing. The partners did make more than me but I felt I was being paid fairly for the work I was doing and looking back know that I am a partner my perspective has not changed.

I do agree with you that PP groups that act like AMCs are no different than AMC. But in my experience those PP groups are the minority.
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Your situation is unfortunately the exception not the rule and is greatly dependent on the geographic location, meaning the more desirable the location the more likely your senior "colleagues" are going to screw you.
But I am glad it worked out for you and hope you will still have this positive outlook 5 years from now!
 
B-Bone said:
not sure of the exact legalities, but my group is part of a larger conglomerate of seven local private groups who band together to get better rates on benefits (insurance, retirement, etc). together we own a billing company and get better billing rates than the other groups in town. We are all separate corporations and make our own clinical, business and management decisions. All of these groups have true, honest, transparent partnership tracks.
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The mega group you are now employed by " tricked to think you are a full partner in" is nothing but an AMC!
 
Planktonmd said:
The mega group you are now employed by " tricked to think you are a full partner in" is nothing but an AMC!
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No, it sounds like several smaller private groups merged to be one bigger private group for the sake of improved billing efficiency and collections with everybody still their own boss at their location.
 
Planktonmd said:
What's the difference???
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The difference is fake PP AMCs can string you along with a
Mman said:
No, it sounds like several smaller private groups merged to be one bigger private group for the sake of improved billing efficiency and collections with everybody still their own boss at their location.
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Just a matter of time before they hire non-partnership track/fake partnership track employees (if they haven't already), then they're just another AMC.
 
BLADEMDA said:
Small Private group vs Large AMC- which one will the Insurance companies be afraid of? size matters when negotiating rates!

big%20vs.%20small%20dog.jpg.838x0_q67.jpg
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haha yeah but I bet there's a whole lotta fight in that scrappy little guy

my mom always told me that it's not the size of the dog in the fight...🙂
 
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