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“In theory, there is no difference between theory and practice. But in practice, there is.”

Yogi Berra

Do accountable care organizations (ACOs) and “bundled payment” programs (the acute care episode [ACE] demonstration and other “bundling” or “episode grouper” concepts) threaten the existence of independent emergency department (ED) groups? “Why devote a chapter to the issues of starting a new practice or adding a new location to the existing practice?”

Perhaps the answer lies in the quote from Yogi Berra and in the fact that independent ED groups and fee for service (FFS) have flourished since the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) permitted physician billing to be separated from hospitals. It is unlikely that even these powerful health reforms will eliminate the need and market for independent ED groups. This is particularly the case in areas where ACOs do not have effective reach, that is, outside of the major cities and suburbs. But even if health reform causes the acquisition of many ED groups, the question remains—what options exist other than becoming a hospital employee? For instance, can a group maintain certain aspects of independence within the “Captive Professional Corporation (PC) Model,” even if the hospital becomes a strategic partner in the practice ownership and management?

Goals and Objectives

This chapter provides the various group structures, for example, 1099 versus W-2, and compares pros and cons. Hybrid models like the “Captive PC model” are also discussed. Finally, strategies and suggestions to address major practice management, governance, legal, and billing issues are presented.

Prepare in Advance

Substantial lead time is required to decide on the terms and conditions of the ED group's agreements with ED physicians (EDPs), nonphysician practitioners (NPPs), hospitals, and payors. Time spent in advance avoids major headaches later. Quick start-ups are often associated with major pitfalls because the significant time pressure to start adds to the already long-list of “must dos.” Groups require careful consideration of FFS billing processes, particular to Medicare, Medicaid, and Blue Shield provider enrollment and credentialing as it may take months from initial application to successful enrollment.

Also, Medicare severely restricts the ability of the ED provider to bill retroactively for rendered services once the Medicare Provider Transaction Access Number (PTAN) is issued. The Medicare retroactive period is generally 30 days from the date that the application was received (or the date the provider began providing services, whichever is later). This very short retroactive period means that providers whose application submission is delayed may not get paid for care previously delivered, that is, Medicare accounts receivable (AR) may be denied if there are delays in the submission of the Medicare Form 855-I (individual application) and Form 855-B (group application).

Obtain Competent Professional Advice

The issues discussed in this chapter are complicated ...

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