Dickinson Wright attorneys guide physicians in changing world of health care provision



by Cynthia Price
Legal News

Dickinson Wright presenters emphasize that although there have been major shifts and transitions in the ways physicians work, more change is inevitable.

At a seminar last Friday called “Physician Strategies and Success Tools,” five Dickinson Wright attorneys gave physicians attending a view into the options available to them as the Affordable Care Act (ACA) and other legislation change the healthcare world.

Brian Fleetham of the firm’s Grand Rapids office said that in the past, approximately two-thirds of physicians were in the kind of traditional private practice generally associated with medical care. But as of now, about two-thirds are employed by health systems.

Fleetham specializes in health law as well as general business and corporate law at Dickinson’s Grand Rapids office. He was named “Lawyer of the Year" for Grand Rapids Health Care Law in 2012 by Best Lawyers in America.

He told the audience of approximately 20 people at the Prince Conference Center that greater costs, such as those associated with Electronic Medical Rec-
ords, and the increasing complexity of all aspects of getting paid have driven the move away from small private practices.

Working directly for a hospital; negotiating a Professional Services Agreement, in which a hospital purchases particular services; and entering into a Co-Management Agreement, where the health care center contracts with a private practice to manage a service line, are all options for physicians. Each requires a different type of scrutiny, with attention paid to the metrics by which performance will be evaluated in the agreement models.

Mark Wilson, who focuses on medical group practice formation and operation, and was named his region’s Lawyer of the Year, Healthcare Law, for 2013 and 2016, and Rose Willis, a Rising Star designee who focuses on regulatory, transactional and corporate law for her health care industry clients, both practice in Dickinson Wright’s Troy office.

The two discussed different integration strategies available to physicians and the challenges facing each

After talking about the massive consolidation in health systems and hospitals, Wilson explained that he developed the idea of the Large Independent PC Super Group (LIPCSG) based on looking at the model of General Motors. “You really can’t buy a GM nameplate on a car — you can buy a Cadillac, you can buy a Chevrolet or a Buick, but even though they’re competitors in some ways, the divisions figured out a way that they can all be under the corporation and work across an entire platform,” he said. The LIP

CSG operates on a similar concept. Smaller physician practices maintain their own divisions but there is a unified business at the top level of management.

Willis discussed other physician group strategies, including Equity Joint Ventures, Contracted Joint Ventures, and dove in-depth into Accountable Care Organizations, which stem from and are governed by the ACA.

As the presenters acknowledged, a clear risk with integrated practices is running afoul of the Stark Law, part of the Social Security Act, which prohibits physicians from referring Medicare patients for certain health services (lab work, for example) to an entity with which the physician or an immediate family member has a financial relationship — with some notable exceptions, which have been interpreted liberally by health care providers.

Willis quoted a Wall Street Journal article which said that retired Rep.?Pete Stark, for whom the 1989 Stark Law (since revised) was named, claimed that today, he would not vote for his own bill. But according to WSJ, Stark added that he knows one group is grateful for the law. “I have every lawyer in town bowing gratitude to me for all the work they get out of that law,” he said. The audience laughed.

An alternative, said Billie Lightvoet Ward and Kevin Bernys is that some physicians are going “back to the future” and practicing an updated version of traditional medicine.

Fleetham had referred to TV’s Dr. Welby; Willis talked about Grey’s Anatomy; and Ward used Doc Baker from Little House on the Prairie as a model for the kind of medical practice called, variously, “Concierge Medicine,” “Retainer Medicine,” or “VIP?Medicine.”

In this model, private-practice physicians charge an annual or monthly retainer fee for special services and/or for greater access to the doctor — one extreme example Ward mentioned was closing down the entire office so a patient can be seen privately — or individual fees for particular luxury services. She cautioned that a practice has to be structured carefully to avoid regulatory pitfalls.

Ward, who specializes in health care compliance, corporate law and commercial transactions and has also been named a Rising Star, works out of both the Grand Rapids and the Kalamazoo offices of Dickinson Wright.

“The choice is dependent on factors such as an analysis of your patient population, both current and anticipated, your goal of how big you want your practice to be,” Ward said. “Are your patients going to be willing to pay the fees, is there enough interest in concierge medicine in your community or in your market?”

Often a doctor interested in concierge medicine will opt out of Medicare entirely, said Bernys, who also works out of Troy and provides both counsel to health care providers and suppliers, and outside general counsel to small and medium size businesses, including advising them on structure.

As of now the 2002 response to something called the Waxman Letter, which questioned concierge fees in terms of mandates not to charge Medicare patients more than the allowed rate for covered services, is considered to prevail in legal considerations. It states,?“insofar as the retainer fee under such an agreement is truly for noncovered services, such fees would not appear to be in violation of Medicare law.”

Bernys stressed that Federal rules in this area are continuing to evolve.


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