fbpx

Making Sense of Provider Networks

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.

January 3, 2022

 

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. Share on X

 

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.

All opinions published on SomeDocs-Mag are the author’s and do not reflect the official position of SoMeDocs, its staff, editors. SoMeDocs is a magazine built with the safety of free expression and diverse perspectives in mind. For more information, or to submit your own opinion, please see our submission guidelines or email opmed@doximity.com. Do you have a compelling personal story you’d like to see published on SoMeDocs? Find out what we’re looking for here and submit your writing, or send us a pitch.

All opinions published on SomeDocs-Mag are the author’s and do not reflect the official position of SoMeDocs, its staff, editors. SoMeDocs is a magazine built with the safety of free expression and diverse perspectives in mind. Do you have a compelling personal story you’d like to see published on SoMeDocs? Submit your own article now here.

Share

Leave a Reply

Your email address will not be published. Required fields are marked *

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.

Of Interest

Subscribe To Our Newsletter

Get updates and learn from the best

Side Ventures [SERIES]

Side Ventures [SERIES]

Coming Soon: Guests will discuss the side ventures they’ve taken on, from the books they’re writing, to the podcasts they host, to other extracurriculars they’ve taken on.

Kimberly Parks, DO

Kimberly Parks, DO

I am a physician health care entrepreneur disrupting conventional medical care through integrative well care.

Want More?

Be a part of our healthcare revolution. Don't miss a thing SoMeDocs publishes!

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.

follow us

© 2024 SoMeDocs. All Rights Reserved.

Soak up content & grow

Educational reflections..

Drop your email address below and we’ll email you the link for continuing opportunity pathways from CMEfy. Check your spam folder if you do not receive our email. We’ll also add you to our Sunday newsletter, so you can receive even more of our unique content!

Support A Platform that Celebrates Real Doctors

For as little as $10, you can help keep this openly accessible site available to all & help us sponsor in more doctors.

Interested in subscribing
to our unique content?

Interested in subscribing to our unique content?

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?”

Site SoMeDocs Logo, square

WANT TO STAY IN THE LOOP?

DON'T MISS A SINGLE CONTENT PIECE.