For docs looking to form an IPA, navigating antitrust issues can be tricky
Current trends aside, not all physicians want to be employed, but many are finding the challenges of maintaining an independent practice more trouble than they are worth. One option available to these doctors is to hook up with like-minded souls in an independent physician association, but antitrust issues may discourage even the bravest go-it-aloner.
“There are a lot of dark halls where you hope no one jumps out and grabs you,” says Dr. Russell Libby, president of the Virginia Pediatric Group and chief of the general medicine section at the Inova Fairfax Hospital for Children.
Libby and his partners recently incorporated the bylaws for the clinically integrated Health Connect IPA and are in the process of developing a timeline and business plan as well as looking at how to integrate the information technology systems of some 250 doctors who will be part of the new organization. Needless to say, the doctors have called their lawyers.
“Some think that, when your motivations are pure, you won’t run afoul of the antitrust laws,” Libby says. “But we will use legal counsel every step of the way— I can assure you of that.”
While some have viewed the doctors’ efforts as a rebuke of the Inova system, Libby says it’s anything but that because health systems cannot afford to hire all the physicians they need to build a network. Plus, he says, it’s not easy for systems to build relationships with—let alone build medical office buildings for—doctors with whom the system has no prior history.
“This won’t be anything but a blessing to them,” Libby says of the new IPA.
Dr. Eric Nielsen, a vice president with the Camden Group consultancy, agrees. “It seems to be a good model,” he says. “Because hospitals can’t employ them all, and they don’t all want to be employed.”
Libby says there are two types of physician independence: Full autonomy or being part of a nonemployed group that consists of independent practices where you can have your own hierarchy, create your own work environment, and “design and determine how you get paid.”
“If you are used to full autonomy, you’re not going to do well in that type of practice,” he says. “You might as well continue your solo concierge practice and hope to find people who will like you.”
According to Jeff Miles, who chairs the antitrust and competition group and is principal with the health law group at the Baltimorebased law firm Ober Kaler, doctors have four models to choose from with IPAs: They can form a risk-sharing financially integrated group; a data-sharing-for-quality-improvement-purposes clinically integrated group; they can employ the “messenger,” non-negotiating model; or they can do none of the above— which he doesn’t recommend.
“You can break the law and take your chances—which some have done,” Miles says. “Some have gotten away with it, and some haven’t.”
With the messenger model, Miles explains how it involves asking a health plan to make an offer and then taking that offer to each member of the IPA to individually accept or reject.
On May 10, the Federal Trade Commission settled a case involving the BSA Provider Network, an Amarillo, Texas-based IPA affiliated with Baptist St. Anthony’s Health System. The FTC accused BSA of operating a “reverse mes- senger model,” in which the network reportedly surveyed its members, developed a fee schedule and then offered it to payers. In the settlement, BSA admitted to no wrongdoing but agreed to not conduct joint negotiating in the future. BSA did not respond to a request for comment.
“The negotiation triggers the problem,” Miles says, because according to the FTC, “when you’re negotiating prices as a group with a managed-care plan, the negotiations constitute a form of horizontal price-fixing.”
Ridgway, Colo.-based healthcare attorney Leah Gates is counsel for the famed Mesa County Physicians IPA, one of the oldest such organizations in the country, and she says the composition of every IPA is a little bit different—much to the dismay of those seeking the “silver bullet or magic pill” to make them successful.
“Avoid ‘clinical integration in a box’—I’ve had some offices call me and say: ‘What is it, in five words or less, that you do?’ ” she says. “One thing they don’t want to do is have lawyers draft papers that look good to the FTC but are not something the physicians want to practice under.”
Before joining the Camden Group, Nielsen was chief medical officer of the Greater Rochester (N.Y.) IPA and helped guide it into clinical integration. Now he advises others on how to do it.
“GRIPA is still looked at as a model because it was well recognized by the FTC,” he explains. “Now I’m helping other organizations to build programs and, to me, it’s a really good opportunity to do what I did with GRIPA over and over.”
Nielsen adds, however, that GRIPA could use a name change. Because of its partnerships with Rochester General Hospital and NewarkWayne Community Hospital, Newark, N.Y., it is more of a physician-hospital organization, or PHO, than an IPA.
Miles says PHOs—where physicians and hospitals contract together with one or more payers—are coming back in fashion. “I think there is going to be a resurgence in PHOs,” Miles predicts. “They sort of went into vogue and then went to hell.”
Dr. Russell Libby, president of the Virginia Pediatric Group, Fairfax, and his partners are forming the Health Connect IPA.