Physician Networking and Joint Contracting

Why is joint contracting important?
For physicians to create and successfully participate in the kinds of innovative health care delivery models that are essential to controlling costs and improving health care, they must be able to collaborate. The ability of physicians to jointly contract with health insurers and other payers is often the key to ensuring the achievement of their mutual quality and cost goals. Joint contracting—i.e., allowing collaborating physicians to negotiate with payers as a single unit—is essential because it ensures each physician’s commitment to, and accountability for, the collaboration’s cost and quality improvement goals, and it ensures that the payer is committed to the delivery system as a whole.

What is the problem?
The American Medical Association (AMA) believes that the Federal Trade Commission’s (FTC) and the Department of Justice’s (DOJ) interpretation of prevailing antitrust laws is too restrictive with respect to physician collaboration. Under the agencies’ antitrust enforcement policies—embodied in the, “Statements of enforcement policy in health care,” developed jointly by the FTC and the DOJ during the 1990s—collaborating physicians cannot lawfully engage in collective price negotiations unless the physicians are financially or clinically integrated. The AMA believes that this approach is too restrictive for at least two reasons.

First, by focusing on financial and clinical integration, the agencies impose restrictions on physician collaboration which are more exacting that those actually required by antitrust law, or those required for collaborations outside the health care industry.

Second, although financial integration (e.g., capitated payment arrangements) was popular in the 1990s, today clinical integration is attracting more attention. Unfortunately, the FTC’s interpretation of clinical integration is so demanding, and thus costly, that most physician practices are effectively prohibited from forming clinically integrated groups which can jointly contract with private payers and participate in care improvement and coordination efforts.

What is the AMA doing?
The AMA continually advocates that the FTC and DOJ adopt a more flexible application of antitrust laws to physician collaboratives, including but not limited to accountable care organizations (ACO) and accompanying joint contracting activities. The AMA undertakes this advocacy through private meetings with these agencies or in public forums convened by the agencies. The AMA also testifies frequently before Congress regarding the need for a more flexible application of antitrust laws, if the types of innovative payment and delivery models envisioned by the Patient Protection and Affordable Care Act are to become a reality.

In addition, the AMA has created the booklet, “Competing in the Marketplace: How physicians can improve quality and increase their value in the health care market through medical practice integration, second edition,” to provide guidance on integration issues. This document outlines various strategies for physician practice integration—including physician practice mergers, financial integration and clinical integration. This resource can help physician practices stay competitive while complying with antitrust laws as they are currently interpreted by the FTC and DOJ.

The AMA has also created an educational resource, “ACOs and other options: A ‘How-To’ manual for physicians navigating a post-health reform world.” This resource is specifically designed to help physician practices maximize their likelihood of success, while minimizing the risk of failure, regardless of how they choose to navigate the new post-health reform world. Comprising chapters written by expert physician practice consultants, this resource takes the learnings of the past and translates them into valuable knowledge for the future. Topics include an overview of accountable care organizations and issues to consider such as governance, integrative partnerships with hospitals or health insurers, and managing antitrust risks within the context of integration. The resource also discusses opportunities for consumer operated and oriented plans (CO-OPs), and provides guidance on earning incentive payments for electronic health records. Visit www.ama-assn.org/go/aco to access this resource today.