Joseph Rugg's Health Law Blog

My partner, Marshall Burack, authored an Akerman Practice Update for our Healthcare Practice Group on physician-hospital co-management arrangements.

I have previously written that co-management arrangements are one important alternative for physicians to consider as they explore workable and financially viable opportunities in this new era of healthcare delivery.    So, I think you will find Marshall’s Practice Update to be very timely.   This is something that we are currently assisting physician and hospital clients on.

If you do not have time to read the entire article, here is a quick summary from Marshall’s concluding paragraphs:

A physician-hospital co-management arrangement permits a hospital to provide financial incentives for physician members of the medical staff to assist the hospital in improving the quality and reducing the cost of providing patient care. A co-management arrangement can be an attractive alternative to direct hospital employment of physicians, both for hospitals which do not want to assume the financial and administrative burden of owning and operating a large physician practice, and for physicians who wish to maintain their independence rather than becoming hospital employees.

Because a co-management arrangement involves the payment of compensation to physicians who refer patients to the hospital, the arrangement must be structured properly in order to avoid violation of applicable health care statutes and regulations. Hospitals which are considering entering into a co-management arrangement with members of the hospital’s medical staff should engage knowledgeable health care counsel, as well as experienced consultants who will help structure and monitor the arrangement and who will confirm that compensation amounts reflect the fair market value of the management services provided. If a hospital ensures that the co-management arrangement is structured properly, the arrangement should prove to be beneficial for the hospital, the physicians, and most significantly, for hospital patients who will receive higher quality care.