Many of the reasons why physician practice acquisitions come apart after the deals are finalized fall under the category of “operational incompatibility.” Too often, the team that negotiates the deal is not the same team that is charged with operationalizing the deal. As a result, potential administrative and management problems — from physician appointment schedules […]
Compensation is often a make-or-break deal point in a hospital’s acquisition of a physician practice. Prospective physician employees will naturally compare what they will earn post-acquisition to what they currently earn as practice owners, partners, or employees. From the hospital employer’s perspective, discussions around physician compensation provide important opportunities to win physicians over and to […]
It’s tempting to short-change the due diligence process when acquiring a physician practice. In the heat of a deal, hospital leaders are understandably most interested in determining fair market value (FMV) so they can make the buy decision and set the purchase price. The due diligence process can turn up insights about a physician practice […]
Open PDF file > It’s healthcare’s version of dating: sizing up another organization for a potential partnership or merger. Seventy-one percent of healthcare leaders expect their organization’s merger, acquisition, or partnership activity to increase over the next three years. With continued changes to healthcare’s competitive landscape, hospital mergers and acquisitions (M&As) reached a record high […]
Next Generation ACOs (NGACO) have been associated with model-wide reductions in spending without declines in quality, according to a new report from CMS. Based on their first performance year (2016), the participating NGACOS reduced Medicare spending by approximately $100 million. The savings appeared to be associated with reductions in hospital and skilled nursing facility […]
According to a recent report on the 2016 Medicare Shared Savings Program (MSSP) results, Track 1 ACOs that earned shared savings still incurred a $31 per member per month (PMPM) loss on average, equating to $5.2 million in losses for an average organization. For Track 1 ACOs earning shared savings, the average $27 PMPM savings payment […]
CMS has proposed an overhaul of the Accountable Care Organization (ACO) program, to take effect July 2019. The Medicare ACO program, called the Medicare Shared Savings Program (MSSP) would have a new name, Pathways to Success. It would require the 561 existing ACOs to switch to one of two tracks and would mandate that they […]
Hospital merger & acquisition (M&A) activity in the second quarter of 2018 decreased by nearly 50 percent from the first quarter according to a M&A tracking company. Analyses by other companies that track M&A activity reported a similar decrease. However, physician practice acquisition remained steady in the second quarter. Irrespective of these numbers, […]
CMS recently released its proposed rule for changes to the Outpatient Prospective Payment System (OPPS) for FY19. In addition to a proposed 1.25 percent increase in hospital OPPS rates for FY19, CMS wants to reduce payment for hospital outpatient clinic visits at off-campus provider-based departments to 40 percent of the OPPS rate. The “site-neutral” […]
The head of CMS outlined the agency’s policy shift to competition and choice in a recent interview. Seema Verma noted, “Coming incentives will encourage Medicare beneficiaries to shop among providers, with those that have the lowest prices and deliver better-coordinated care gaining a competitive advantage.” (“Public Poll, Verma Reject Single-Payer,” HFMA Compass, July 27, 2018) […]