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Health Care Risk Sharing, Integration & Accountable Care – Part 7

RISK SHARING, INTEGRATION AND ACCOUNTABLE CARE: MECHANISMS FOR PROVIDER RISK SHARING AND INTEGRATION

Forms of Multi-provider Models Using Centralized Organizations: Standardized multi-provider models through which a central organization serves as agent for individual providers to facilitate collective negotiation can permit the individual provider the benefit of collective negotiation without the burden of establishing, or joining, a complete network.  Centralized organizations are generally defined through their ability to bind their participants.  These models may take a form similar to the models of contracting and integration described above, but are further segregated upon their ability to bind participants.  The ability to bind will generally be driven by the government’s approach regarding whether the collective is unduly restrictive.

  • Marketing Model: Through the marketing model, the network serves as a centralized source for the marketing of provider services to payers. The network has no authority to bind physician-participants.  A payer is required to negotiate directly with providers if interest in contracting;
  • Non-binding Centralized Negotiation Collective: Through the non-binding centralized negotiation collective model, the network obtains payer-information and relays same to individual providers. The network has no authority to bind physician-participants.  A payer is required to negotiate directly with providers if interest in contracting. The non-binding nature of the collective generally stems from price fixing and anti-trust concerns;
  • Binding Centralized Negotiation Collective: Through the binding centralized negotiation collective, the network is given limited authority to bind physician-members.  Generally, a master agreement is negotiation on behalf of these providers.  The agreement generally concerns reimbursement criteria, and which providers, or classes of providers are included in the agreement;
  • Network Model: The network model is the zenith of network binding authority. Through the network model, each provider is an affiliate that is free to conduct its own business within a defined market with the provider seeking targeted regional contracted through which all providers adhere to in standardized fashion.

Whether through contract, or joint venture, these models typically can be identified through the following characteristics: (1) a joint venture or collectivized contracting arrangement; (2) the involvement or competitor providers, (3) the pooling of resources to support the venture; (3) risk-spreading among provider-members.   Multi-provider contracting models must be crafted to comply with state and federal antitrust law.  Accordingly, arrangements with these substantive characteristics, in whatever form, should be cognizant of antitrust laws.

This article is part of a series of articles on risk sharing, integration and accountable care.