Medical Practice Consolidations & Mergers
Are you a physician seeking to consolidate or merge your medical practice with one or more other physicians?
Contact Us. We can help.
Why Consolidate?
There are many reasons physicians have sought to consolidate their independent medical practices into larger group practices. Among the most compelling of these reasons are the expansion of managed care; rising costs and federal and state laws limiting referrals for ancillary services.
Benefits of Consolidating Medical Practices
A well-planned consolidation can produce many benefits for all its participants. A group practice may have greater negotiating leverage with managed care plans, not merely because of its size and geographical presence, but because of its ability to accumulate and use data to establish that it is capable of providing better care at a reduced cost.
Group practices may have increased purchasing power which reduces the per-physician cost as compared to small practices. Pooled resources can be used by the group to invest in sophisticated medical practice management and electronic medical records (EMR) systems, as well as clinical equipment that may enhance reimbursement.
Another attractive feature of group practices is that time-consuming management functions, such as billing and collection, accounts payable, human resources, IT and credentialing may be centralized and performed by specialized staff that many small practices could not otherwise afford, thereby reducing costs and duplication of services, while allowing the physicians to focus on the practice of medicine.
Two Group Practice Models
There are two prevailing models for creating a group practice: the “Care Center” Model and the “Integration under One Roof” Model.
While both models offer physicians the advantages of consolidation, the Care Center Model frequently offers a more practical approach for physicians who seek to retain some of the autonomy to which they have become accustomed. While certain functions are performed at a central business office, physicians practicing under the Care Center Model may maintain their separate office locations (Care Centers) and significant operational control over their support staffs, equipment, medical records, and clinical relationships with their patients. Additionally, unlike the Integration under One Roof Model, the Care Center Model enables the group practice to provide services in multiple, geographically dispersed sites.
The Care Center Model poses certain challenges, one of which is compliance with Federal and State Anti-trust laws, which prohibit price-fixing and group boycotting among competitors. A Care Center group practice must be sufficiently integrated to sustain an Anti-trust challenge. The financial separation of the Care Centers makes this more challenging than in the Integration Under One Roof Model.
Is Consolidation Right for Your Medical Practice?
The decision to consolidate medical practices warrants careful consideration. As such, care should be taken to perform adequate due diligence and to address the various ownership, governance, legal and accounting issues involved.
If your medical practice needs assistance or advice towards the consolidation or merger of your medical practice with that of another physician, contact us. We can help you anywhere in the United States.