fbpx
Quick summary: Sandra Weitz, MD tells us that the first step in deciding whether to join a provider network is to understand what they are and what they do.

 

Whether you are starting or running a medical practice, one of the questions that always comes up is should you get individual contracts with each insurance company or join a provider network.

But even trying to answer that question, we need to understand the types of provider networks.

Admittedly, it’s very easy to be confused by the alphabet soup of provider networks—Accountable Care Organizations (ACOs), Independent Practice Associations (IPAs), Clinically Integrated Networks (CINs) and Physician Hospital Organizations (PHOs). However, the reality is that there’s little difference between these networks because they all have the same basic purpose. 

 

Understanding the Terminology

 

To start with, let’s go over the most common terms:

  • Independent Practice Association (IPA)
    • Can consist of physicians only or physicians plus hospitals and other providers
  • Physician Hospital Organization (PHO)
    • Includes both hospitals and physicians—and possibly other types of providers
  • Clinically Integrated Network (CIN)
    • Almost identical to a PHO
  • Accountable Care Organization (ACO)
    • Originally designed by CMS and still most often mentioned  within the context of the Medicare A and B programs
      • For Medicare patients, the ACO shares the risk to deliver coordinated quality care
      • “When an ACO succeeds both in delivering high-quality care and spending health care dollars more wisely, the ACO will share in the savings it achieves for the Medicare program.” https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ACO
      • “Direct” ACO or other network entity contracts directly with CMS or the state Medicaid program. There is no health plan involved as the “middleman.”
  • “Indirect” ACOs contract with health plans that serve as intermediaries between the entity and CMS, the state Medicaid agency and/or employers.
  • ACOs now exist for third party payors where the ACO shares the risk and can participate in cost savings

 

Different pieces of legislation and regulations, both on the state and federal level, may use different terminology. In addition, there are regional variations in terms of which term is used. The lack of consistency in terms of what something is called only adds to the confusion associated with trying to understand the differences between provider networks.

 

The Purpose of Provider Networks

Regardless of the name, each of the provider networks have the same basic purposes:

  • Create an entity that assembles a network of healthcare providers
  • Enhance quality for the benefit of patients
  • Attempt to increase efficiency and reduce costs
  • Act as a “middleman” between payers and providers

 

Don’t Confuse Provider Network and Payment Terms 

The blurring of the definitions between the type of provider network and the payment system complicates only complicates the situation further.

That said, the key thing to know is that the two are completely separate.

The type of payment is not defined by the type of network.

Medicare and the third party payors are moving towards a value-based payment (VBP) system.

VBP moves away from the purely fee-for-service claims payment and adds features related to quality metrics, shared savings and losses and capitation.

The VBP system can be implemented by any type of provider network.

 

Don’t Confuse Provider Network and Payment Terms The blurring of the definitions between the type of provider network and the payment system complicates only complicates the situation further. Click To Tweet

 

The Takeaway Message

A provider network—independent of which acronym it goes by—brings together participating providers.

In turn, the network negotiates, and enters into, a master contract, on behalf of the provider network with a payer, such as CMS or a health plan.

In short, the network entity is typically the intermediary contracting entity between the participating providers and the payers.

The first steps in deciding whether to sign up for a provider network is to understand the underlying organizational structure and the payment system being employed and how it impacts your bottom line.

Tweet this out

EARN CME

This learning experience is powered by CMEfy - a platform that brings relevant CMEs to busy clinicians, at the right place and right time. Using short learning nudges, clinicians can reflect and unlock AMA PRA Category 1 Credit.

Ad from SoMeDocs.

SoMeDocs Front Page Header

Marketing physician voices uniquely!

Our Venture Amplifies Healthcare Voices.

Ad from SoMeDocs.

SoMeDocs Front Page Header

Marketing physician voices uniquely!

Our Venture Amplifies Healthcare Voices.

Sandra Weitz MD

Entrepreneur, Practice Building MD

SoMeDocs

SoMeDocs, short for Doctors on Social Media, is a physician-created & led health media company that aims to build a beautiful catalogue of verified online healthcare voices. Our goals are to teach educated professionals tools for personal success, and to showcase them to the world, and facilitate the connections needed to grow. Join us.

My Life Dimmer Switch

My Life Dimmer Switch

Dympna Weil, MD confesses how owning the dimmer switch of her life changed EVERYTHING. She shares exactly how.

Negotiation series header: David Norris

Negotiate as a Physician and Win

Catch this 8-part series, hosted by physician & business consultant David Norris, MD, MBA & produced by Dana Corriel, MD. Learn to be a stronger negotiator with these important tactics.

Conversations with Shem: Season 2

Medical literature icon Samuel Shem, author of “The House of God” returns for season 2 of conversation, in order to discuss the broken healthcare system. This time, he’s brought the guests!

Doctors on Social Media Teach Podcasting Header Image

Doctors On Social Media Teach Podcasting

Today’s health experts are sharing their expertise in audio format using podcasts. Join us as we explore how we do this and bring on the innovators who are giving it their all.

George Mathew, MD, MBA

George Mathew, MD, MBA

Trying to learn as much as I can about healthcare and the business of healthcare, to try to create access to care for all patients

Roberata E Gebhard D.O.

Roberata E Gebhard D.O.

I am passionate about Gender Equity in Medicine, and I help physicians who have experienced workplace injustice!

Heather Signorelli, DO

Heather Signorelli, DO

Physician executive and entrepreneur on a mission to help physicians through a reliable medical billing service.

Mimi Zieman M.D.

Mimi Zieman M.D.

We all have inner voices that need to be listened to, and stories to tell. Voices speaking up for women and justice are needed now more than ever.

Meridith Grundei

Meridith Grundei

Perfection is highly overrated. It’s time to start getting comfortably uncomfortable and start sharing your voice with the world!

JD Gershbein

JD Gershbein

“Linkedin is like a raffle; you must be present to win.”

Ann M. Richardson, MBA

Ann M. Richardson, MBA

“The Doctor Whisperer” – Healthcare systems transformation consultant and fierce physician, care team, and patient advocate.

SoMeDocs Logo

The Healthcare Connection Hub

Disclaimer: SoMeDocs assumes no responsibility for the accuracy, claims, or content of the individual experts' profiles, contributions and courses. Details within posts cannot be verified. This site does not represent medical advice and you should always consult with your private physician before taking on anything you read online. See SoMeDocs' Terms of Use for more information.

Grow with us.

We take rolling applications for regular contributors

We had a fantastic turnout and brought a large number of physician contributors on board our 1st & 2nd rounds. If you’re interested in being considered for a future round, submit an application now and we’ll be in touch when it opens. Regularly contributing means you share your thoughts, stories, opinions, or advice on our website, and we make it pretty/circulate. It’s essentially our large effort to collectively market health experts and grow thought leaders. We also consider applications for our “Experts for Health Experts” section, depending on the pitch. Are you ready to join us? If you prefer immediate access & want to build yourself space now, consider becoming a member.

Play Video
Our Founder Answers Your BURNING Question

SoMeDocs

“Why should I become a member of SoMeDocs if I already have my own space online?”