Mike McCaslin, CPA, Somerset - California Orthopaedic Association
Mike McCaslin, CPA, Somerset - California Orthopaedic Association
Mike McCaslin, CPA, Somerset - California Orthopaedic Association
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CALIFORNIA<br />
ORTHOPAEDIC ASSOCIATION<br />
APRIL 16, 2010<br />
+ Passionate<br />
about your<br />
Success<br />
Assets & Liabilities of Structure &<br />
Function of Individual Practice Models<br />
Presented by:<br />
Michael J. <strong>McCaslin</strong>, <strong>CPA</strong><br />
Health Care Team
Currently Available<br />
Private Practice Models<br />
Assets & Liabilities of<br />
Structure & Function of<br />
Individual Practice Models<br />
www.somersetcpas.com
•Solo Group<br />
• Small Group<br />
• Mid-Size Group<br />
• Large Group<br />
• Multi-Specialty Group<br />
• Quasi Employment Model<br />
www.somersetcpas.com
CONTINUUM OF<br />
PRACTICE MODELS<br />
•IPA<br />
•MSO<br />
• Ancillary Services<br />
Joint Venture<br />
• Umbrella Model<br />
(Full Integration with Divisions)<br />
• Fully Integrated Model<br />
(No Divisions)<br />
www.somersetcpas.com
INTEGRATION STRUCTURE<br />
IPA Model<br />
Group<br />
A<br />
Group<br />
B<br />
Group<br />
C<br />
Group<br />
F<br />
Independent<br />
Practice<br />
<strong>Association</strong><br />
(Contracting Entity)<br />
Group<br />
E<br />
Group<br />
D
INTEGRATION STRUCTURE<br />
MSO Model<br />
Group<br />
A<br />
Group<br />
B<br />
Management Services Org<br />
Group<br />
C<br />
Executive<br />
Director<br />
Group<br />
F<br />
IT CFO HR<br />
• Billing<br />
• Collecting<br />
• Contracting<br />
• Fee Schedules<br />
• Coding<br />
• Accounting<br />
• Legal<br />
• Benefits<br />
•Insurance<br />
• Advertising<br />
Group<br />
D
INTEGRATION STRUCTURE<br />
Partially Integrated Model<br />
ASC<br />
A<br />
Old PC<br />
B<br />
Old PC<br />
A<br />
Group<br />
A<br />
Group<br />
B<br />
Group<br />
C<br />
Old PC<br />
C<br />
Old PC<br />
F<br />
Management<br />
Services<br />
Organization / CBO<br />
Old PC<br />
D<br />
Group<br />
F<br />
Group<br />
D<br />
Real<br />
Estate<br />
LLC D
INTEGRATION STRUCTURE<br />
Fully Integrated Model<br />
Old PC<br />
B<br />
Old PC<br />
A<br />
Assets<br />
ASC<br />
A<br />
Assets<br />
Assets<br />
Old PC<br />
C<br />
Old PC<br />
F<br />
Assets<br />
All Revenue<br />
All Expenses<br />
One Division = Entity<br />
Assets<br />
Old PC<br />
D<br />
Real<br />
Estate<br />
LLC D
MSO MODEL<br />
EMPLOYMENT ISSUES<br />
• Non Clinical Employees Could be<br />
Employed by MSO<br />
• Clinical – (<strong>Orthopaedic</strong> Physicians,<br />
Chiropractors, Podiatrists, PAs, NPs,<br />
Acupuncturist, RPTs, etc.) Need to be<br />
Employed by Medical Entity<br />
www.somersetcpas.com
MSO OWNERSHIP<br />
& ECONOMICS<br />
• Owned by Medical Practice Entities<br />
• Owned Individually by Physicians<br />
• Zero Sum net Economics<br />
www.somersetcpas.com
GOALS RELATIVE<br />
TO THE MSO MODEL<br />
www.somersetcpas.com
PRE-INTEGRATION PROCESS<br />
• Definition of Goals and Objectives<br />
– Administrative/Economic Issues<br />
• Acquire greater management expertise<br />
and/or consolidate management expertise<br />
• Consolidate resources to provide more<br />
marketing muscle<br />
• Increase efficient use of facilities, staff,<br />
equipment, etc.<br />
• Long-term, reduce overhead (A BIG MAYBE)<br />
• Single community identity<br />
www.somersetcpas.com
PRE-INTEGRATION PROCESS<br />
• Definition of Goals and Objectives<br />
– Administrative/Economic Issues (Cont’d)<br />
• Corporate office as the service center for<br />
outlying practices<br />
• Provide physician ownership in the medical<br />
practice, but in a larger entity more capable<br />
of competing with hospital developed<br />
physician organizations<br />
www.somersetcpas.com
PRE-INTEGRATION PROCESS<br />
www.somersetcpas.com<br />
• Definition of Goals and Objectives<br />
– Centralization of Services Issues<br />
• Billing and collection services - Single<br />
Practice Management System or use of a<br />
billing portal<br />
• Fee schedule<br />
• Cash management - Single depository<br />
account and use of lockbox?<br />
• Medical records (Document Imaging/EMR<br />
• Medical technology (Digital X-ray)<br />
PAC System)
PRE-INTEGRATION PROCESS<br />
• Definition of Goals and Objectives<br />
– Centralization of Services Issues (Cont’d)<br />
• Group purchasing<br />
• Strategic planning for organization as a<br />
whole<br />
• Accounting, legal, and consulting services<br />
• Employment of additional physicians<br />
• Human resource/personnel service relations<br />
www.somersetcpas.com
PRE-INTEGRATION PROCESS<br />
• Definition of Goals and Objectives<br />
– Centralization of Services Issues (Cont’d)<br />
• Purchase and administration of<br />
employee benefits<br />
• Marketing and public relations<br />
• Financial reporting<br />
• Compliance services (Medicare, HIPAA,<br />
etc.)<br />
• Banking/financing relationships<br />
• General corporate and malpractice<br />
liability insurance<br />
• Facilities management and maintenance<br />
www.somersetcpas.com
ANCILLARY SERVICES<br />
•MRI, PT<br />
JOINT VENTURE<br />
• Practices Need to be in Same Building<br />
where Ancillaries are Operated<br />
• Groups of 5 or more Physicians Need<br />
to Have an Office for Seeing Patients<br />
in the Building<br />
• Solo Practitioner Needs to Move Entire<br />
Practice to Building<br />
www.somersetcpas.com
ANCILLARY SERVICES<br />
JOINT VENTURE<br />
• Practices Bill for Technical Fees<br />
• Contract with Radiologist for Read<br />
(Avoid Anti-Mark-up Provisions)<br />
• Expenses Housed in Separate LLC &<br />
Practices Pay LLC for their Share of<br />
Expenses (Depreciation, Interest,<br />
Maintenance Fees, Staff, etc.) –<br />
• Ancillaries Could be Housed in MSO<br />
www.somersetcpas.com
ANCILLARY SERVICES<br />
JOINT VENTURE<br />
STARK RISK – FUTURE CHANGES<br />
www.somersetcpas.com
1206(D) OUTPATIENT<br />
DEPARTMENT MODEL<br />
• Hospital or System Acquires all Fixed Assets &<br />
Non-physician Employees of <strong>Orthopaedic</strong> Group<br />
• Physicians as Group Operates as Outpatient<br />
Department of Hospital<br />
• Group Bills & Collects Professional Fees<br />
• Hospital Bills & Collects Ancillaries<br />
• Group has Little Overhead so Makes More on its<br />
Professional Fees<br />
• Physicians have More Autonomy than<br />
1206(1) Foundation Model<br />
• Need to have Compensation at Fair Market Value<br />
www.somersetcpas.com
Hospital<br />
PSA<br />
EMPLOYMENT<br />
AGREEMENTS<br />
Physician/<br />
Medical<br />
Practice<br />
Extenders
www.somersetcpas.com<br />
Hospital and Physician Goals<br />
Relative to Serving the Community<br />
are Key to this Model.
CONCLUSION<br />
Choosing the Right Model Requires<br />
Analysis, Understanding Your Market,<br />
Investment in Appropriate Professionals and<br />
then a Decision.<br />
www.somersetcpas.com
Michael J. <strong>McCaslin</strong>, <strong>CPA</strong><br />
Health Care Team<br />
<strong>Somerset</strong> <strong>CPA</strong>s, P.C.<br />
3925 River Crossing Parkway<br />
Indianapolis, IN 46240<br />
mmccaslin@somersetcpas.com<br />
www.somersetcpas.com
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