ACO, Medicare HMO Plans and Investment Future

Posted by Team PracticeForces on Nov 12 2014

Kunal Jain leads the TIE panel in talks over private practice future.

PracticeForces CEO, Kunal Jain, moderated a healthcare panel for hundreds of independent physicians and small practices in the Tampa Bay area.

During the panel, Jain discussed with the top area doctors on topics such as ObamaCare, Medicare HMOs, HIPAA compliance and the role of private practice.

Dr. Mario Perez, MD, Internal Medicine:

For small groups that are looking to get investors involved that are nonmedical: what is your recommendation, in terms of their involvement into the startup, as opposed to loans versus stock options? What kind of involvement would you recommend for a group that is looking for an investor?

Dr. Chandresh Saraiya, MD, Co-Founder of Florida Medical Clinic:

The question is for a small group of practice; in a practice with 10-15 physicians, looking for non-physician investors, what do you need the capital for? Does growth mean hiring more doctors, or plans for technology that is going to produce income? What do you have?

Dr. Mario Perez:

It is a combination of:

  • Growth
  • Equipment
  • New locations
  • Practice growth
  • Expansions in terms of penetration or insurance

Dr. Chandresh Saraiya:

I would say to use a number of factors to decide, first of all, what your vision is, what you are going to do with the money, where it is going and if it aligns with what is going on in the market place. Are you positioned well for it?

Based on that you can decide to see what make sense for you, and if you feel strong enough that you can pay them back, then I would just take the loan. If you are shaky, feel like there is a high risk or that you may lose your shirt, you can trade your equity to try and get their partnership, and try and get them involved in doing that.

Second questions about ACO form the Audience:

I do not know whether anyone knows the answer on accountable care organizations (ACOs); everyone got on the bandwagon and the money did not come. What do you see in the future for that?

Do you see money coming, or is it just pilot projects? For small practices, is it worthwhile to look into that to band together, or make an ACO? Or does no one know? Where is the future for accountable care organizations?

Dr. Chandresh Saraiya:

What is going on with accountable care organizations? So, the simple way I can explain this to you (and this is how I explain to our group), is that the entire physician community is now being forced to change from a “Fee for Service” System to a value-based system as of 2015. What is happening is that, every year, even solo practitioners have to report quality data to CMS. CMS will produce results from this, and give you what is called a “value based modifier” in September. 

For those who are in groups of 100 doctors or more, this begins in 2015; for those who are in groups of 10 or more, it begins in 2016; for those who are solo practitioners or in groups of up to nine, it begins in 2017.

So, every year you report to CMS the data. CMS looks at it, and gives you a score, which will be a modifier for your reimbursement in the following year. It would be an upward or downward adjustment up to 4%, depending on whether you are a high cost and low quality provider, or a high quality, low cost provider. It is like a grid in that regard.

This is basically what is happening: everybody is in that train. Your answer about the ACO is, since everybody is going to be in the train to be an ACO, your hand must be raised to take the front seat.

Sidd Pagidipati, Co-Founder of Physician Partners:

So, I am a little biased, and I do believe that ACOs are essentially Medicare HMOs, and are the final step of what ACO will be in 5-10 years. I think you should get involved with ACO, but if you do not have a Medicare Managed Care practice, you should definitely be involved; this way, you get all the benefits of an ACO. This is especially true if you believe you are a high quality, low cost provider, and you earn the share in the savings they want. 

You do not have to wait a year or 18 months to get your reports, and take a piece of savings. While there is definitely an ACO and value-based system future, you can participate with Medicare HMOs right now.

Dr. Chandresh Saraiya:

Only one thing I will add is that, if you are a primary-care based practice, then aside from an ACO, you may also have an option known as comprehensive primary-care practice. This may be a lower risk compared to the ACO, and lower complexity in terms of the setup. We do not have enough time to talk about it today, but just like I mentioned, that is an option.

Dr. Rajan Naik, MD, JSA Healthcare:

ACOs are nothing but HMOs in disguise, like mini Medicare HMO plans. If I am a solo provider taking some Medicare HMOs, I will join an ACO. The way up in next 10 years, as Chandresh said very correctly, you will not be paid for 99214 those days will be gone. FIFO Service Business is dying; please join ACO and try to be proactive, as the name of the seminar is PracticeCheese.


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Topics: accountable care organization, Medicare HMO, ACO

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