Gastroenterology: Physician Practice Management Fees
Gastroenterology physician practices cannot be owned directly by non-physicians in states that ban the Corporate Practice of Medicine like California, New York, and Texas. Physician practice management arrangements are used by private equity firms, platform physician practice companies, publicly-traded practice operators, and other for-profit businesses to manage the non-medical staff, facilities, equipment, supplies, and business services of gastroenterology practices.
Even in the absence of a ban on the Corporate Practice of Medicine, a growing number of states have 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 gastroenterology 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.
Under turnkey management arrangements, for-profit management companies charge independent medical Professional Corporations (PCs) management fees to provide facilities, equipment, supplies, business services, and non-medical staff. According to surveys, fixed percentage rates of medical practice revenues are the most common form of physician practice management fees.
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Gastroenterology Physician Practice Management Fees - Doctor Deals podcast #6
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Gastroenterology practice management fees can vary substantially from practice to practice for several reasons.
- Site of Service Mix: Management fees need to be calibrated for your site of service mix. Practice expenses (and management fees) are not the same for every gastroenterologist. Some gastroenterologists perform endoscopies in office-based suites, some work in ASCs and endoscopy centers, some work in hospitals, and some work in all these settings. Practice expenses and professional reimbursement vary widely based on the site of service mix.
- Ancillary Services: Each gastroenterologist uses specialized equipment, instruments, and lab services in their offices. Endoscopies may be performed in wholly-owned endoscopy centers or in-office suites at the gastroenterologists' discretion. In-office laboratory and pathology services can also require substantial investments in equipment. Many gastroenterology practices provide ultrasounds, swallow studies, or even CT scans. Though labs and imaging studies are Stark-Designated Health Services (DHS), these services can be provided under the in-office ancillary exception to the Stark Laws. A management company may provide the specialized facilities, equipment, supplies, and support staff necessary to furnish these services in-office.
- Regional Geographic Costs: Labor, real estate, supplies, and other expenses vary widely from market to market. Practice expenses and Fair Market Value gastroenterology practice management fees vary from market to market.
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. This practice expense data can be compiled and aggregated for the services provided by over 10,000 gastroenterologists.
Turnkey Practice Management Fee Ranges for Gastroenterology
Gastroenterology services can expect favorable growth trends from the aging baby boomer demographics for the next several decades. Gastroenterologists will have no problem finding national gastroenterology networks and management companies willing to provide back-office support for their practices.
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The DataRise™ Physician Practice Management Fees data subscription is the most robust and authoritative data for comprehensive turnkey physician practice management arrangements.
Purchase the data subscription today, or contact Coker directly for a formal Fair Market Value opinion.
