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by Antonio Arias, MBA, CHBME

Can a Practice Management Organization Help Your Practice?


Amid the evolving health insurance market, many providers are facing down a choice: indemnity versus managed care.

Of course, doctors aren’t required to pick one or the other. But with managed care plans on the rise now that many consumers are responsible for a greater portion of their individual care costs, most practitioners that want to earn revenue from managed care patients have little choice but to buy in to a physician-hospital organization (PHO) or sell out to a larger group or hospital.

But a third option is out there. By working with an MSO, or management services organization, providers can essentially straddle the line between the independent and dependent options for operating a practice.

An MSO is a business that provides non-clinical services to providers with the aim of helping those providers better manage their business concerns. Beyond that baseline goal, however, the forms and functions of MSOs can vary widely. In a LinkedIn post outlining medical practices’ legal considerations regarding MSOs, attorney and physician Dr. Rishi R. Khatri puts it this way:

“An MSO may simply provide practice management and administrative services to a practice, or it may acquire a practice’s assets and subsequently enter into agreements to provide the practice with space and/or equipment. MSOs may be owned by non-healthcare provider investors, by a hospital, by a group of physicians, a joint venture between a hospital and physicians, or a health plan. They may interact with, be combined with or evolve into an Independent Practice Associations (IPA) or ACO. Some MSOs provide specialized services to other MSOs.”

While that’s a wide span of services, physicians who select the right mix for their practices can see significant benefits. For many, the ability to remain autonomous while still receiving the kind of administrative assistance (and/or managed-care insurance partnerships) available to hospital-employed providers is an attractive scenario. To determine how attractive an MSO relationship may be for your practice, be sure to ask yourself the following questions:

How important are managed care patients to your medical billing performance?

Even in heavily penetrated managed care markets, managed care patients often make up only 20 to 30 percent of medical practices’ patient populations today. Yet as healthcare shifts further toward-managed care-first models, they’ll grow more important in the years to come – so now may be a wise time to find a transitional way to bring them into your practice.

Do you need longer-term solutions than an MSO can provide?

But there’s a downside to that “transitional way” mentioned above. Most healthcare-industry stakeholders don’t believe the MSO model will be around forever; long-term, it will likely be phased out by the rise of Accountable Care Organizations (ACOs) and Patient Centered Medical Homes (PCMHs). If you’re more interested in exploring those approaches than in maintaining your practice’s autonomy, you may be wise to take the bigger leap to an ACO or PCMH model now instead of using an MSO as a short-term solution

How qualified is the MSO support system when it comes to your specialty?

MSOs are most popular among specialists physicians who still want or need to accept indemnity patients to grow their revenue. But being the only practice in your specialty in a given MSO network may create challenges if you have specialized administrative or medical billing needs, as dermatology, acupuncture, and other specialists often do. (Working with an outsourced medical billing company is often a smart way for those practices to improve their overall performance.)

For more information, contact NCG Medical Billing now.

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by Antonio Arias, MBA, CHBME

Want to see how outsourcing medical billing can help your practice? Contact a billing expert at NCG Medical today!

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