Want Your Oncology Practice to Stay Independent? Join a Supergroup

March 20, 2014

In order to remain independent, community oncologists must align themselves with a critical mass of providers in their local or regional markets and be prepared to accept more financial risk for the quality and cost of care they provide.

In order to remain independent, community oncologists must align themselves with a critical mass of providers in their local or regional markets and be prepared to accept more financial risk for the quality and cost of care they provide, according to a perspective in the current issue of Journal of Oncology Practice.

“There is no one-size-fits-all solution to preserving independent private practice for oncologists. Any successful strategy must respond to the unique stakeholders and competitive dynamics in the locality,” wrote Michael L. Blau, Esq., partner and chair of the health care venture practice at Foley & Lardner LLP in Boston. “That said, it is possible to discern some success factors that may help guide oncology groups in considering their strategic alternatives.”

One way to achieve critical mass in a market is by forming an oncology supergroup, which combines independent physicians and groups into a single group practice, said Blau. In order to remain vital to payers, the supergroup should include medical, radiation, specialty, and surgical oncologists and provide easy access to care in key locations across the region or state.

Besides boosting their market position and bargaining power with payers and vendors, supergroups allow smaller practices to reap the benefits of centralized services, such as information technology platforms; gain access to a wider variety of specialized programs and services; and collaborate with peers on quality improvement initiatives.

Supergroups also have legal advantages, including the ability to jointly price or collectively bargain with payers and vendors without running afoul of antitrust laws, said Blau. The structure also allows physicians to legally make referrals to each other and share ancillary revenue without violating anti-kickback statutes or the Stark Law.

Creating a supergroup can be difficult due to different cultures and lack of trust among the various entities, said Blau. In those cases, some practices may consider joining a single-specialty oncology network with shared financial risk (individual physician payments are tied to overall group performance) and clinical integration (all physicians follow best practices and coordinate care to achieve value).

Other options for retaining independence include:

Oncology medical homes. Most medical home practices are primary care providers but oncology practices can qualify if they provide whole-patient primary care services for at least 75% of their patients.

Oncology ACOs. Rather than participate in Medicare ACOs, which are predominantly made up of primary care practices, oncologists can form their own oncology-only commercial ACO. The ACO would include a health system partner who assists with transitions of care, and a commercial insurer who would offer incentive payments for ACO practices to reduce costs and improve quality.

Multispecialty groups. Oncologists can operate as a separate division within a larger multispecialty group.

CMS innovation grants. These grants support creative arrangements for value-based care, such as oncology medical homes and ACOs, and financially or clinically integrated networks.