New strategies for independent practices

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 Is it possible for GI physician practices to stay small and independent? Rock Rockett of Rockett Healthcare, LLC discusses the evolving environment.

How it all got started
Rock was running a company doing accreditation consulting for surgery centers and physician offices. He was asked to speak to representatives at Blue Cross Blue Shield of Illinois regarding safety concerns they had about office-based procedures. What arose from that discussion was Blue Cross Blue Shield of Illinois paying higher rates to gastroenterologists to perform procedures in their offices – as long as they became accredited for patient safety and infection control.  It was a win-win for all involved – better for patients, better for health plans, and better for GI physicians.

How has the GI landscape changed?
The biggest change in recent years is consolidation of practices. Groups consolidate to get better prices for products and services they use and to counter pressure from decreased fees from Medicare and commercial payers for their services. With declining reimbursement rates, practices must focus on additional revenue streams. Rock laments the trend of practice consolidation as larger practices are more challenging to deal with and for patients to navigate through.

Is consolidation inevitable for all doctors’ groups?
It’s not a simple answer according to Rock. He says GI physicians can stay small and independent while being able to be in control of their practices and managing their patients but he qualifies this assertion.  Being small and independent doesn’t work for every GI group as it  depends on the relationships with their hospital and their payers, the market where the practice is, referral network, etc. Doctors must evaluate whether this is a feasible option for them.

How can doctors increase their revenue streams?
This comes from working out arrangements with other professionals – share of pathology lab revenue and anesthesia fees. While larger consolidated practices can take advantage of the multiple revenue sources, smaller independent practices have similar opportunities. Rock helps GI physicians explore the options in their market for generating additional revenue for their practices from anesthesia services, pathology lab services, colon prep products and potentially clinical trials.

Is it worth it – financially speaking?
Rock tells all prospective clients that it is an investment. He performs a pro forma where he looks at costs: designing the office, the build out, equipment, staff, accreditation, and other  costs of disposable items. After looking at the costs, Rock helps them to assess projected revenue from reimbursements.

There is a positive new trend Rock reports. He recently spoke to a Blue Cross Blue Shield executive and learned several BCBS plans are increasing their reimbursement rate by 15-percent for office-based procedures. They found that they are losing leverage with the bigger, consolidated medical groups. Plus, like the doctors, insurance companies face certain limitations depending on the regulations of the state, and they can adjust their reimbursement rates by place of service to encourage more procedures to be performed outside of traditional hospital settings.

Is it difficult to negotiate with insurance companies?
It is and reimbursement is determined on a state by state basis. There is an incentive for payors to negotiate favorable reimbursement rates for GI procedures as they are relatively low cost and higher volume than many other medical procedures. The pandemic has contributed to this as no one really wants to go to the hospital unless they have to and since procedures like colonoscopies don’t need to be done in hospitals, it makes office-based options more viable. The market conditions aren’t always rosy; sometimes there are unfavorable ones as well. That’s one reason professionals like Rock exist as he keeps an eye on the trends and helps his GI physician clients navigate through the market trends.

How do small and independent practice maintain relationships with hospitals?
One example in Chicago Rock gives are physicians who have partnered with the Advocate hospital system and contracted for services but, they are not employees so they can still maintain their own practices. The doctors continue to l refer higher-level cases (where procedures would need to be done in a hospital) to a hospital.

There are definitely many factors to consider before opening  an endoscopy suite in your own small, independent practice. If you are considering this, speaking to an experienced consultant can help you make an informed decision. To learn more about your options, please contact Rock Rockett at (630) 258-2211 - rock@rocketthealthcare.com