Thriving in Private Practice

Innovative Contracting for Private Practice Physicians, Part I

Aug 4, 2022

Can small private practices stand up to big health insurers and payers with their legal teams and economic resources?

Keeping your practice open

The AMA is fighting to keep private practice a viable option for physicians. We're working to remove unnecessary burdens so physicians can reclaim the time they need to focus on patients.

Perhaps not so well on their own, but with the addition of professional administrative resources, they can manage and compete, according to Mike Grodus. He is chief administrative officer of Professional Medical Corp., a Michigan-based physician organization with about 460 doctors that provides contracting, business and technology management services to independent physician practices.

Grodus elaborated on the advantages of physician organizations—also called independent physician associations, and not to be confused with medical associations such as the AMA or state or specialty societies—in the second of a two-part interview on the “AMA Thriving in Private Practice” podcast.

You can subscribe to “AMA Thriving in Private Practice” on Apple Podcasts or anywhere podcasts are available.

Related Coverage

In contracting, private practices can find strength in numbers

Physician organizations can help private practices negotiate and design contracts that establish the standards of their relationship and how physicians can increase their earnings by meeting those standards, Grodus said.

“If you don't have the right contracts in place and know your market and know your payers and know who you're dealing with and have the ability to negotiate the best deals, you could be in these contracts and still not reap the rewards or really not maximize the opportunities within the different programs,” he said.

Grodus said physician organizations [POs] bring a wide range of nonmedical resources to the bargaining table.

“One of the benefits of forming the PO is that there are full-time professional staff employed by the PO, paid for through the organization and the physicians participating in the organization that are really assuming some of these administrative tasks, the quality-reporting analysis,” he said. “It's not just negotiating the contracts, which is what you're doing, but there's also staff there to provide all this other important support that's needed to be successful in those contracts.”

The physician organization can help remove some of the “pain points” regarding contracts, he added.

It takes astute clinical judgment as well as a commitment to collaboration and solving challenging problems to succeed in independent settings that are often fluid, and the AMA offers the resources and support physicians need to both start and sustain success in private practice.

For example, the AMA has developed a private practice toolkit on payor contracting that covers these elements:

Related Coverage

New contract arrangements, new stress for private practices

Value-based contracts that establish performance and administrative standards and can provide income sharing arrangements with private practice are common, Grodus noted. But they have been evolving since the pandemic’s onset and associated changes in the way practices deliver care.

Telehealth has moved to the forefront, demanding new contract provisions.

While health plans have modified rules regarding telehealth to enable payment, part of a physician organization’s “administrative job is to be the liaison with the health plan,” Grodus said.

A physician organization can make a difference in getting appropriate payment and accommodating physicians to maintain a telehealth practice. But choosing the right physician organization is important to the success of the relationship.

“You have to make sure you—as a physician—are selecting and interviewing the physician organizations to understand” the answers to some key questions, Grodus said, on transparency, payment structure and—ultimately—“How do you treat your physicians?”

Find out more about the AMA Private Practice Physicians Section, which seeks to preserve the freedom, independence and integrity of private practice.

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