The Verden Group

Participating in New Healthcare Exchange Plans

Pearl | February 19, 2014 |

It is early with regard to the healthcare exchange plans and yet practices across the country are already feeling the impact. It’s not just consumers who have experienced problems while attempting to sign up for the exchange plans on the website; providers too are dealing with major headaches as they navigate through the first couple of months of this new system.

Looking for more information about the effects of healthcare reform on your medical practice? Join us May 2 & 3 in Newport Beach, Calif., for Practice Rx, a new conference for physicians and office administrators.

Let me explain. The insurance companies created something called “narrow networks” within their full network of providers. What that means is that only a subset of physicians within any given insurance company’s network “qualified” for participation in the exchange plans. The result is that while some physicians got rolled into these plans, others were excluded, even though they participate in some of the other products with that particular insurance company. For example, a physician could be participating with an HMO and a PPO-type product, but be excluded from the exchange product. This has created a dilemma for many practices. On the one hand, it means no new business coming in from new exchange members. On the other hand, it also means scrambling to hold onto existing patients that have switched to these new, lower-priced health insurance products.

The physicians that were rolled in (or opted in, in many cases) to the new exchange networks are struggling to determine new patients’ eligibility under these plans. Many patients have not yet received insurance cards, and those that have are sometimes finding that their physician was mistakenly listed on the website as a “participating” provider.

In addition, those physicians who are participating with the exchange plans are finding that they are getting paid less for doing more. That is, not only are the rates less in these plans, but many patients who previously did not have health insurance may have gone without care for prolonged periods of time. As a result, they are typically sicker than patients who have been under care over time.

Also, signing up for participation in these plans means accepting a lower payment rate because the insurance companies are offering these as “budget” plans with low premiums. Naturally, the discounts have to come from somewhere and this is in the form of lower payments to physicians who participate with these plans.

So where does that leave things for physicians? Here are four points to consider:

1. Physicians need to know whether they are participating with an exchange plan.

This can usually be readily discovered by looking yourself up on an insurance company’s online directory. But don’t just trust the data that you find there; double-check by calling the insurance company and verify that you are in fact participating with an exchange plan (there have been many errors on these sites so far).

2. Physicians need to determine what their fee schedule is going to be.

Ask the insurance plan to send you a sample for your specialty or send them your highest utilized codes for pricing.

3. Physicians need to communicate very clearly with patients if they are not in the exchange plans.

Hang posters on your waiting-room walls and get communications out to patients to explain that the insurance company (if this is the case) has decided to exclude you from the exchange product. Many patients wrongly assume that their physician is automatically in the network, so do your best to educate them as soon as possible.

4. Physicians need to quantify the damage.

Take note of the number of patients that you may lose due to their choice of plan and appeal to the insurance company to see if there is a way that you can retain them. If you purposefully opted out of the exchange network then it is unlikely that you can hold onto these patients. But if you were excluded from the network, you may be able to appeal ― in doing so the plan might make an exception and add you in.

If you are participating with an exchange product and you find that you are receiving an influx of these patients, my best advice to you is to set up some very good patient education materials and tools around the most frequently seen chronic conditions, in order to help manage what may be a sicker population of patients. Don’t be afraid to look at what the insurance company is offering in terms of chronic-care support. Many have teams of nurses that help to manage the patient’s care and do a relatively good job of feeding that information back to the primary-care physician.

Lastly, remember that it is still early. There are going to be a lot of missteps under this new system, on all sides. So I suggest hanging in there to see how things shake out. Like any new program it will take a while to work out the kinks.

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Join Us in Tahoe, CA – “Pediatrician As Specialist” (CA AAP Chapter 1)


From our friend, Chip Hart, over at Confessions of a Pediatric Practice Management Consultant. I figured this was better written than anything I could put together, so I am shamelessly copying it and posting it here. We hope to see you there!

“All the cool people – well, cool people plus myself – will be gathering at the Resort of Squaw Creek in Lake Tahoe, CA from April 25 to 27, 2014 for the CA AAP Chapter 1 meeting.  Coolest of all will be Susanne Madden, who is going to discuss PCMH.  I believe I am doing “Your Practice and the Internet:
Things You May not Know” and Susanne and I have a new, shared presentation, “Recalling Patients: Effective Strategies for Managing Patient Care in the Medical Home.”   There is a full spread of clinical topics titles and a special guest appearance by Wendy Sue Swanson, MD (“How 140 Characters Are Changing Pediatrics”).

You can see the tantalizing brochure or head to the chapter site to sign up.  I hope to see you there.”


Medical Practice Super Groups, Are They for You?

PHYSICIANS PRACTICE Pearl | November 20, 2013 |

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Practices today are facing challenges such as lower earnings, more complex regulations, higher costs, obligations to create higher-quality care and produce better outcomes, all while they see other colleagues merge or become acquired by local hospitals or healthcare systems. So at least once a week I get an inquiry from a physician asking, “Should I sell my practice?”

There is no single answer to that question. It depends on many factors, including whether or not the practice is in good financial shape and if it is well managed. I do consider those to be two of the strongest indicators for successfully remaining independent. However, the options shouldn’t be limited to either selling or remaining independent.

Practice-without-walls models

As an alternative, some practices are now coming together to form “practice-without-wall” groups or “super groups.” Some of these are single specialty and band together in order to achieve efficiencies of scale, to reduce costs, and to create collective competitive advantages. Others operate more like independent physician associations (IPAs) due to the fact that they are multi-specialty and may bill under multiple tax identification numbers.

I’m a big proponent of single-specialty super groups because this model allows for practices to come together under one unified business structure that can focus very effectively on building a quality single-specialty organization. That is, single-specialty super groups understand the challenges inherent in their particular specialty, and therefore are best equipped to tackle them and provide the most appropriate solutions.

So what does a super group actually do?

If built well, a super group offers individual practices the opportunity to retain some autonomy while reaping the benefits inherent in being part of a larger organization. The primary purpose of a super group is to centralize services and gain efficiencies of scale. Centralized services include billing, human resources, and accounts payable. Most contract and bill under a single tax identification number, and depending upon the size and quality of the group, will probably be able to negotiate better rates with insurance companies.

By centralizing things like payroll, billing, accounts payable, and claims management, you reduce the overhead that each practice has to lay out independently. But more than that, a larger-scale operation reaps the benefit of lower collective costs for things like malpractice insurance, medical supplies and vaccines, and health information technology, and provides the business resources best qualified to manage them.

What about practice autonomy?

You may be thinking that this sounds a lot like selling to a hospital. So what is the difference? To start, you won’t be just another employee. Super groups consist of shareholders. Certainly there will be collective rules that need to be adhered to, the same as there would be if you sold to a hospital, but most practices that join super groups get to keep their own staff, their patients continue to see the same providers, at the same locations, and arrangements between partners can remain the same depending upon the governance structure chosen.

What will change is usually the technology you use — super groups work best when all practices are on the same EHR, for example — and more and more frequently, the standard of “quality” to which you must perform.

Specifically, in order to achieve better insurance contracts, super groups need to demonstrate quality clinical outcomes and show that their members can achieve certain metrics and clinical targets. Payers are no longer interested in just size — even a small super group has negotiating power, provided it can demonstrate a compelling “value proposition” to the payer. That is, if the super group can provide superior services by managing care more effectively and successfully than its peers, then it can benefit from shared cost savings with a payer.

How to start a practice without walls

Are you friendly with associates in another practice? Do you share similar philosophies and clinical practices? Then it may be time to talk to one another. Seek out others who have formed super groups in other regions or in other specialties and ask them how they did it.

Forming a super group requires setting up a legal structure and working through development of an operating structure that all members can be happy about. With the proper support from lawyers, accountants, and consultants who have put together other super groups, you will be in good hands.

So before you sell, consider joining or starting a super group. It really is a great option!

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The Independent Pediatrician


Our good friends over at PCC (Physicians Computer Company) in Vermont, very ambitiously set about to launch a new journal, aptly titled The Independent Pediatrician. They believe, much like we do at the Verden Group, that the day of the independent physician is not gone, rather, it just needs support from folks like us to help ensure that those brave docs thrive.

You can read the first issue here, free, on Issuu: