The Executive Suite: Group Without Walls: A New Breed of ACO

With financial difficulties and regulatory changes leading to the consolidation of medical practices across the country, it’s become increasingly difficult for private practices to compete against the multitude of services offered by large provider groups. Unfortunately, joining such groups can leave formerly autonomous physicians battling the bureaucratic demands of profit-driven administrators.

So is there a way for solo providers to realize the benefits of joining a provider group while keeping much of the independence of private practice? The answer may be in the group without walls (GWW) payment model.

GWWs are basically a grouping of small practices, typically in the same specialty, that trade under a common tax identification number while allowing each member to maintain a significant measure of independence.

Observers say recent interpretations of federal regulations, which have upheld the GWW model’s validity, joined with lower reimbursement rates and rising costs, have convinced more physician practices to consider this type of merger.

Today, we’ll take a closer look at GWWs and whether or not your practice could benefit from this payment model.

Why Integrate?

Larger practice groups usually derive significant income from supplementary services like lab work, imaging, and therapy. As it stands, small practices lose out on these services because under current federal regulations like the Stark Law unaffiliated practices are not allowed to share auxiliary services.

But under the GWW model, secondary services fall under the group practice exemption to Stark regulations because they are housed under a common tax ID number.

GWWs can also negotiate better reimbursements with payers by leveraging the power of a wider geographic area and more patients. Because GWWs are more attractive to payers, they can be a great way of bringing in new sources of revenue.

In today’s unstable healthcare market, it’s vital to take full advantage of the opportunities made available to you. Otherwise, large payers may deem your practice a nonparticipating or out-of-network provider – a situation that could cost you hundreds of patients.

GWWs are seen as less restrictive because earnings are tied to productivity goals that physicians set themselves. And in return for a relatively low administrative fee related to the size of the practice, the practice receives a number of business services at a discount.

These services often include shared accounting, health and retirement benefits, liability and malpractice insurance, and legal services to ensure compliance with federal regulations.
When physicians don’t have to worry about these administrative hurdles, they have more time to get back to what is important: treating patients.

GWW Requirements

The typical ACO usually requires practices to pool funds, align business practices, and centralize management. But GWWs are different because none of these adjustments are mandatory.
The only requirements of a GWW are a common fee schedule among participating providers, standardized employees benefits like health coverage and 401k, and equally shared ancillary service revenue.

Besides these few requirements, all other decisions are left up to the individual providers. Some GWWs chose to systemize services such as billing or accounting and others hire managers to handle issues like payer negotiations, technology implementation and human resources. However, these decisions are solely up to the leadership team of the individual GWW.

Other things to consider when looking into the GWW model include:

- Legal: The services of a healthcare attorney are strongly recommended for anyone considering the formation of a large provider group.

- Accounting: Because the entire GWW group has to file a single tax return, all practices within the group should utilize the same financial entity to streamline bookkeeping.

- Payroll: An Internet-based payroll service that allows electronic deposits is essentially required.

- Employee benefits: This is a more complex issue for businesses with more than 100 employees as additional rules apply, but consider the use of an employee benefit company offered by the payroll vendor.

- Benefits package: Typically, the group must offer the same benefits to all employees if the total number of employees is greater than 100.

- Health insurance: The ability to save on health insurance premiums is often one of the most celebrated benefits for small business owners joining a larger business group.

Again, these are just suggestions as the GWW model does not require most of them.

So if you’re in good standing with similar providers in your area and are finding it difficult to offer certain services to your patients, GWW may be the right model for you. It can lead to more satisfied patients and increased profits.