Urology: Physician Practice Management Fees
There are six major urology physician practice management companies backed by private equity firms. Private equity firms usually do NOT invest in urology practices directly. About half of U.S. states have made it illegal for corporations to employ physicians directly, including California, Texas, and New York. This ban on the Corporate Practice of Medicine is intended to keep medical practitioners, like urologists, distanced from direct financial pressure and the influence of non-medical laypersons.
Urology Management Companies
- Solaris Health
- Unio Health Partners (formerly Urology Partners of America)
- United Urology Group
- Urology America
- Urology Management Associates (acquired by Summit Health in 2022)
- U.S. Urology Partners
Even if your state does not have a ban on the Corporate Practice of Medicine, many U.S. states have also enacted mandatory state-level reviews of material transactions involving healthcare organizations and management service organizations (MSOs).
California, New York, Illinois, Washington, Oregon, and Minnesota have all enacted requirements for state agencies to review material transactions in healthcare. Future business transactions involving urology practices in these states and other states may trigger reviews.
If a state review is required, you want to make sure all your management arrangements are in compliance with applicable state and federal laws. A Fair Market Value opinion of your management arrangement can provide evidence that your management arrangement is legitimate.
Private equity firms usually invest in management companies or MSOs that purchase all facilities, equipment, and supplies needed for urology practices to furnish these ancillary services. These resources are provided to practices as part of turnkey management service arrangements between MSOs and Professional Corporations (PCs).
Urology is a perfect physician specialty for management companies because urology practices can offer many ancillary services that are expensive to develop. These include:
Urology Ancillary Services
- Ambulatory surgery centers: Urologists commonly perform cystoscopy and ureteroscopy procedures in ambulatory surgery centers.
- Imaging: X-rays and ultrasound are common imaging modalities offered in urology physician practices.
- Lithotripsy: Extracorporeal shock wave lithotripsy (ESWL) is a standard treatment for breaking up kidney stones so they may be passed. A lithotripter is a major piece of medical equipment.
- Pathology & lab services: Urologists order an enormous volume of urinalysis tests. These tests may be manual, automated, and with or without microscopes.
- Pelvic floor physical therapy: Pelvic floor physical therapy is a specialty within physical therapy focused on rehabilitation of the pelvic floor muscles related to injury or dysfunction.
- Pharmacy: Urology practices that dispense medication in accordance with state laws may self-refer patients for prescribed medication under the Stark Laws in-office ancillary exception.
- Prostate artery embolism (PAE): PAE is a minimally invasive procedure that is an alternative to prostate removal (prostatectomy).
- Radiation therapy: Multiple types of radiation therapy may be used to treat prostate, bladder, kidney, testicular, and penile cancers
Urology practices can provide Stark Designated Health Services (DHS), such as imaging, labs, and pharmacy services, under the in-office ancillary exception of the Stark laws.
Some of these ancillary services require a lot of capital investment. Ambulatory surgery centers and radiation therapy cost millions of dollars to develop, while a lithotripter can cost hundreds of thousands of dollars.
Practices need a lot of urologists and a lot of money to make multi-million-dollar investments in facilities and equipment for ancillary services. That’s why urology is a perfect match for management company networks backed by private equity.
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Urology Physician Practice Management Fees
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The American Medical Association, Medicare, and the medical specialty societies spend appreciable time each year administering practice expense surveys and compiling data on the practice expenses for every physician service provided under all physician specialties. Health-Contract.com complies and aggretates this practice expense data for the services provided by urologists in over 100 U.S. geographies.
Management fees for the professional services of urologists are fairly predictable based on the normal mix of services they perform in office settings and facilities. However, the eight (8) ancillary services highlighted above can require major adjustments to the practice management fees for just professional services.
Urology Physician Practice Management Fee Ranges
When opining on the Fair Market Value of urology physician practice management services, Health-Contract.com’s valuators spend most of their time customizing management fee analyses for the unique ancillary services provided by the practice and management company under the arrangement.
Need to know the Fair Market Value of urology physician practice management service fees?
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