Journal of Healthcare Management - May/June 2014 - (Page 204)

J o u r n al of H ealt H care M anage Ment 59:3 M ay /J une 2014 management company owned by both the hospital and the physician group. A decision must be made as to whether a management board, composed of both hospital and physician group representatives, will be established. If so, the board's duties, areas of authority (budgets, business and strategic plans, marketing, staffing, equipment and supplies selection, managed care contracting, licensure/accreditation, quality review), and matters requiring supermajority board approval need to be determined. Scope of services. It is important to define early on what clinical services are covered by the agreement, including inpatient, outpatient, ancillary, and multisite services. Term. The hospital and physician group need to establish whether the clinical alignment and integration strategy will be a long-term arrangement with limited exit rights (for cause) or a trial arrangement that might include termination rights, either without cause or following an initial trial term. If the hospital has outstanding tax-exempt bond financing of its physical plant or equipment under the independent physician group management, the term of any management agreement with the physician group could be limited, based on Internal Revenue Service Management Contract standards (IRS, 1997). Dispute resolution process. The parties must decide on an internal dispute resolution process and whether arbitration/mediation or litigation follows a failure of the internal process to resolve the dispute. Exclusivity. The hospital and physician group need to determine if the physician group will be the exclusive provider of the applicable medical director, professional, and service line management services or if other physicians or physician groups on the medical staff might be allowed to provide some of these services as well. Noncompete terms. The hospital must decide if the aligned physician group may provide similar medical director or service line management services at other hospitals or medical facilities and, if so, outline the geographic scope and terms of compliance (duration of the clinical alignment and integration agreement or 1-2 years posttermination). Compensation. There are typically two levels of compensation under a clinical alignment and integration agreement. The first level is a fixed annual fee that is based on the fair market value of the time and effort of the participating physicians to manage and oversee the service line. Services represented in this first level might include medical director services, budget services, strategic planning, community relations and education, development of clinical protocols, ongoing assessment of work-flow processes, physician staffing, patient scheduling, staff supervision, case management activities, medical staff- related activities, and committee participation. The second level of compensation is typically a bonus or an incentive fee for shared savings or quality performance, that is, predetermined payment amounts contingent on the achievement of specified, mutually agreed-on, and objectively measurable service line 204

Table of Contents for the Digital Edition of Journal of Healthcare Management - May/June 2014

Journal of Healthcare Management - May/June 2014
Contents
Interview With Christopher D. Van Gorder, FACHE, President and CEO of Scripps Health
Successful Strategic Planning for a Reformed Delivery System
You, Inc.
Assessing the Feasibility of a Virtual Tumor Board Program: A Case Study
Physician Clinical Alignment and Integration: A Community–Academic Hospital Approach
Employer-Based Coverage and Medical Travel Options: Lessons for Healthcare Managers
Composite Model for Profiling Physicians Across Domains of Care

Journal of Healthcare Management - May/June 2014