4 Popular Professional Service Agreement Options in Orthopedics and Spine

Spine

At the 12th Annual Spine, Orthopedic and Paine Management-Driven ASC Conference in Chicago on June 12, Max Reiboldt, president and CEO of the Coker Group, a national healthcare advisory firm, discussed professional service agreements concerning orthopedics and spine.

PSAs can encompass many different arrangements involving alignment with hospitals and/or health systems, Mr. Reiboldt said. "There are a lot of orthopedic and neurosurgery practices that are looking to some form of integration," he said.

 

PSA offerings generally fall into the following four main categories, according to Mr. Reiboldt.

 

1. Traditional PSA. Under a traditional model (which is the most common), the hospital or health system contracts with the physician practice for professional services, and the hospital employs the practice's staff and assumes responsibility for the practices' management and operations. The hospital also pays the practice's real estate lease, purchase or leases ancillary services, and contracts directly with payers for professional and technical fees.

 

2. Global PSA. Under a global payment model, the practice retains all management responsibilities (aside from contracting with payers) while the hospital contracts with the practice for global payment. "The group is absolved of the responsibility of owning the revenue stream," Mr. Reiboldt said.

 

3. Practice management arrangement. A practice management arrangement involves physicians being employed by the hospital, while administrative management and staff are not. The practice entity is retained in this case, Mr. Reiboldt said. He also said this model is beneficial if the practice "wants infrastructure in place in case things go awry, and they want to go private again. You do have the ability, if it isn't working, to go back into private practice."

 

4. Hybrid model. In a hybrid model, the hospital employs or contracts with physicians while the practice entity is spun off into a jointly owned management services organization.

 

More Articles on Orthopedics and Spine Integration:
The New Healthcare Paradigm: Where Do Entrepreneurial "Superstar" Physicians Fit In?
Large Orthopedic & Spine Groups Across the US Form PHO
Central Maine Orthopaedics, OA Orthopaedics Explore Merger With Spectrum Medical Group

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