Assess benefits in hiring management firm

Practice Pointers. By Karen S. Schechter, AMNews contributor. July 7, 2008.

PRACTICE POINTERS

Answers to questions about the business side of your practice

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Question: I am a partner in a four-physician cardiology practice. We are considering a management services firm. What does it do? How much should we pay? What does it do that we can't do in-house? How do you run a cost-benefit analysis to know if hiring a management services company is the most viable option?

Answer: Management service organizations come in various models, including physician practice management companies, privately owned MSOs, hospital-owned, physician-owned, or some variation of these. The Medical Group Management Assn. defines an MSO as "an entity organized to provide various forms of practice management and administrative support services to health care providers. These services may include centralized billing and collections services, management information services and other components of the managed care infrastructure. MSOs do not actually deliver health care services."

Determining if an MSO is an appropriate option for your practice, which model will work best and what company is the best fit requires careful analysis and self-reflection.

Some MSOs handle only the managed care portion of practices. They negotiate contracts for participating independent physicians, and often administer and perform utilization management and quality assurance activities to monitor those contracts. These organizations often work with regional or local independent physician associations. Typically, there is an annual fee associated with belonging to this type of MSO.