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Excellus starts organizing own physician group

Rochester Business Journal
June 28, 2013

Excellus BlueCross BlueShield is organizing an accountable-care physician group.
 
In the insurer's first bid to recruit area private-practice physicians to the group, CEO Christopher Booth announced Excellus' plans to form the accountable-care network to Monroe County Medical Society board members this month.
 
The Blues hope to have the organization in place by 2014, said James Redmond, vice president of communications at Excellus, in an email last week. That's when Excellus anticipates competing against other carriers on the state's still-forming insurance exchange. 
 
The physician organization's structure and terms it would offer have not been determined. Excellus is in listening-tour mode.
 
"It is still early in the process," Redmond said. "We are developing a prototype arrangement to test in an upcoming round of physician feedback this summer. The model we're considering will reflect insights and feedback from community physicians and will continue to evolve over time to meet the changing needs of independent practices."
 
Accountable care networks are vehicles for doctors and hospitals to collect fees from private or government payers under shared savings provisions. Meant to make doctors and other medical providers' fees at least partly dependent on the success of the care they provide, they typically feature risk-sharing provisions intended to foster cooperation among primary care providers, specialists and hospitals. 
 
The Patient Protection and Affordable Care Act provisions and rules-being ushered in for federal insurance programs for the poor and elderly by the Centers for Medicare and Medicaid Services-do not dictate specific accountable care designs. But they do favor accountable-care models over the currently dominant fee-for-service model.
 
"Fee for service" refers to payments made to doctors and hospitals according to the number of visits or procedures. Shared savings arrangements are hoped to make quality of care and patient outcomes key factors in determining providers' fees. 
 
To be effective, affordable care organizations need robust information technology systems and sophisticated software to monitor and coordinate care among providers. Many observers see only large, well-staffed and well-heeled organizations as capable of successfully organizing such groups.
 
For privately practicing doctors, membership in accountable-care networks would be optional. But if such organizations become the main vehicles through which third-party payments flow, few doctors would be able to abstain from joining.
 
"(Doctors) really can't afford to leave money on the table," medical society executive director Nancy Adams has told the Rochester Business Journal.
 
For health systems, accountable-care networks staffed with primary care doctors to generate referrals to their employed specialists and hospitals could be necessities.
 
The need to organize an accountable-care organization and the costs that would entail were the main factors that moved Unity Health System-the region's third-largest health care provider and fifth-largest employer-to explore a merger with Rochester General Health System, Unity CEO Warren Hern has said.
 
Both RGHS and the University of Rochester Medical Center are recruiting area primary care physicians to join their budding accountable-care networks.
 
By curbing the reach of the URMC and RGHS accountable-care networks, Excellus could gain leverage in fee negotiations with the two health systems, which through mergers and alliances with smaller hospitals are emerging as the region's dominant provider organizations.
 
"We are simply trying to create options for physicians who run independent practices and don't wish to join with other groups," Redmond said. 
 
The RGHS-affiliated Greater Rochester Independent Practice Association-a physician group half-owned by RGHS and half-owned by doctors employed by or affiliated with RGHS-recently signed a five-year shared savings deal with Excellus. The group is in talks over a similar arrangement with Schenectady-based MVP Health Care Inc. and plans to form a Medicare ACO next year, RGHS CEO Mark Clement has told the Rochester Business Journal.
 
Comment on the Excellus-sponsored physician network would be premature at this time, RGHS spokesman Marty Aarons said.
 
URMC officials responsible for organizing the medical center's accountable care network, Accountable Health Partners IPA Inc., have yet to indicate whether it would seek a deal with Excellus or with other third-party payers.
 
URMC officials declined to comment on the Excellus physician organization.
 
The medical society's Adams is monitoring all the accountable-care groups forming in the region. But the society, whose membership includes most of the region's private practice doctors, so far is not recommending any.
 
"We're only trying to inform our members of what's in the contracts at this point," Adams said.
 
Membership in an accountable-care network not affiliated with a health system could have advantages for private practice doctors, said health care lawyer Craig Zicari of Harter, Secrest & Emery LLP. One reason: They might not want to be too closely tied to a health system.
 
Still, added Zicari, whose clients include the 3,200-doctor Rochester Community Individual Practice Association, how open area doctors would be to joining a physician group sponsored by an insurance company is not clear.
 
Three area IPAs-RCIPA, GRIPA and the now dissolved Rochester Independent Practice Association-previously had inked deals with Excellus' Blue Choice HMO only to see the insurance company pull out of the contracts.
 
For RCIPA, the parting of the ways was acrimonious. In RIPA's case, it meant the physician organization's demise. GRIPA suffered a setback but has recovered.
 
RIPA dissolved after Excellus unilaterally ended their arrangement in 2006. The insurer in that year chose to end all associations with IPAs and instead pen contracts with individual doctors and practice groups.
 
Though many local doctors feared individual deals would favor the insurance company, sporadic attempts to resist proved futile. A prominent local specialist practice, the Plastic Surgery Group of Rochester LLC, at first said it would forgo Blue Choice business, but in the end inked an individual deal with Excellus. Not signing with the Blues, which accounted for some $1.5 million of the group's revenue stream, was not a realistic option. 
 
Some eight years earlier, Excellus made a contract with RIPA after deciding not to renew its previous Blue Choice pact with RCIPA. The switch came at the front end of a hard fought, 10-year court battle in which RCIPA doctors sought to recover fees they accused Excellus of wrongly withholding.
 
RCIPA doctors collected $23 million from Excellus in a series of court awards before finally settling in a $29 million deal with the insurer in 2006. The $52 million payout was roughly equal to the fees the RCIPA doctors should have collected under terms of RCIPA's 1997 and 1998 contracts with Excellus, said Kenneth Payment, a retired Harter, Secrest litigator who represented RCIPA in the court battle. 
 
In 2003, Excellus signed a three-year contract with GRIPA. The insurers' decision not to renew that deal in 2005 and its choice not to renew a separate contract supporting a now-defunct RGHS insurance plan cut the IPA's revenues in half, GRIPA's then president, Gregg Coughlin, told the Rochester Business Journal in 2006.
 
Many of the same primary care physicians the insurer is wooing to join its accountable-care network are RCIPA members who recall the IPA's court battle with Excellus. RIPA's membership rolls were nearly identical to RCIPA's. The approximately 900-doctor GRIPA draws its members from the same pool of area physicians.
 
Given their experience, Zicari said, "I could see where doctors might not trust an insurance company."

6/21/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.
 


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