Medical Practice and Business Arrangements Notes

Bonding: An insurance contract covering an employee for financial loss. It protects the employer if an employee embezzles money. If an employee embezzles \$2,000,000 and is bonded for \$1,000,000, the employer can recover \$1,000,000.
Capitation: Healthcare providers receive a fixed monthly payment for providing specific services to patients covered by an insurance company, regardless of whether the patient seeks those services.
Co-payment: A fixed expense (e.g., \$25 or higher) the member is responsible for each time they visit the doctor.
Deductible: The amount a patient must pay towards covered services before their insurance begins to pay.
Fee for Service: Providers are paid for each service they perform.
Integrative Medicine: Medical practice that considers the whole person (body, mind, spirit, and lifestyle), using both traditional and alternative therapies (e.g., chiropractic, acupuncture).
Pay for Performance (P4P): A managed care model that incentivizes providers to improve the quality of patient care. Providers are reimbursed based on their progress toward achieving specific goals. For example, if a diabetic patient's blood sugar is 400, and the provider helps them reduce it to 210 within a set timeframe, the provider receives higher reimbursement.

A business owned by a single individual, who receives all profits but also assumes all risks.
Oldest and easiest form of business to start.
Common for providers in complementary and integrative medicine (e.g., chiropractors, acupuncturists).

The owner bears all financial burden.
Potentially long working hours (e.g., 90-hour week).
Must generate enough income to cover employee salaries, building costs, and supplies.

With more than one employee, job advancement and specialization become possible. For example, in a new partnership, the first assistant can be promoted to clinical manager, or assistants can be assigned to administrative or clinical tasks.

A legal entity with the rights to own property, manage affairs, and sue or be sued.
Providers are personally liable for their own acts of medical malpractice but not for those of their colleagues.
Costly to establish and require formal legal documentation.

Medical providers organize to provide medical care, consultation, diagnoses, and treatment, sharing equipment and personnel.

Single Specialty: All providers specialize in the same area (e.g., OBGYNs).
Multispecialty: Providers from various specialties practice together (e.g., orthopedics, pediatrics, dermatology).
Primary Care Groups: Typically include family medicine, internal medicine, gynecology, and pediatrics.
Hospital Managed Medical Groups: Owned by a hospital (e.g. many offices at Piedmont).

Contract with clients to provide comprehensive healthcare and preventative medicine for a fixed premium.
Patients can access services as long as a contract exists between the physician and the insurance company.
HMOs require a primary care provider (gatekeeper) to manage referrals and control costs.

An arrangement where an organization (e.g., insurance company, HMO, doctor/hospital network) acts as an intermediary between the patient and the provider.
Includes PPOs, HMOs, and IPAs.
HMOs were the first to emphasize preventative healthcare (e.g., Pap smears).

Hospitals build ambulatory healthcare settings and rent office space to providers who, in turn, refer patients to the hospital.
Example: Piedmont owning offices in the Evans area, creating seamless referrals and integrated EHR systems.

Owned by providers, hospitals, or separate parties, providing office management services (e.g., secretarial, billing, purchasing, computer services).
MSOs allow providers to focus on patient care while the MSO handles business operations.

Contractual agreements between insurance companies and providers to supply medical care to a pre-established number of clients.

Covers business-related liabilities, distinct from professional liability (malpractice).
Business/Occupational License: Required to open a clinic and must be renewed annually.
Building: Covers injuries on the property.
Automobile: Covers accidents involving employees on business errands.
Fire, Theft, and Burglary: Covers damages and losses from these events.