certain network, association or accountable care organization. They
may also appear in commercial payers' contracts, restricting a
provider's ability to contract directly with companies that participate
in the payer's network, even if it's through a network lease or other
third-party administrator relationship.
Review your existing contracts early in the process of exploring the
possibility of direct contracting. This will allow sufficient time to re-
negotiate your agreements, if necessary, especially if the revised terms
must coincide with renewal periods.
Can you offer surgical services for a fixed rate, paid in advance?
Many employers are interested in fee-for-service contracts, but
the predictability of fixed "bundled payments" makes the offering all
the more attractive. Your success with bundled payment plans will
come down to contracts that clearly define the services that are inside
and outside of the bundle.
Another important step for your planning: Conduct a legal analysis
as to whether a healthcare provider which is engaging in financial-
risk-bearing activities could be viewed as actually practicing insur-
ance. The rules differ from state to state and you'll want to stay on
the healthcare side of that line.
How will you enter into and administer contracts with employers?
It's often appropriate to form a new legal entity to carry out
your contracting, particularly if multiple healthcare organizations are
involved (which is typical in bundled payment arrangements and
other integrated delivery models). This contracting entity serves as an
intermediary between participating providers and employers, entering
into agreements and collecting and distributing payments.
Be aware that antitrust laws restrict providers who may otherwise be
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