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Trinity Health sues anesthesiology group

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  • Avatar okayplayer 
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    https://t.co/eG0KIQLHl8

    Interesting times.

    #233435 Reply
    Dreamgiver Dreamgiver 
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    Who knows exactly what is going on behind closed doors, but often times it would be best for the hospital to support the group and use its bigger leverage to get the insurance company to agree to a fair reimbursement rate. Right now everyone is losing except for BCBS

    #233439 Reply
    Avatar wideopenspaces 
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    That sounds nuts. Isn’t the insurance company the problem here? Why isn’t the hospital suing the insurance company? How can they force the docs to work at a pay rate that is not acceptable to them? Couldn’t the insurance company and hospital be in cahoots to force the doctor pay to any amount they want?

    #233441 Reply
    Avatar okayplayer 
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    I imagine what is not stated here explicitly is that the hospital is angry with the previously physician owned group for selling to a national management company, who is now trying to recoup their costs on the buyout of the anesthesia group by squeezing the insurers.

    It is not all rosy once you sell out your practice to national management companies. These stories are coming out more and more frequently. Usually the partners owe 3-7 years to the management company after selling out, or lose a portion of their buyout.

    A cautionary tale for those thinking of cashing out their physician-owned practice.

    #233442 Reply
    Avatar SValleyMD 
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    “Trinity Health said in a statement that its chief concern was for its patients”

    Haha. These guys kill me.

    Avatar wideopenspaces 
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    Interesting. This part of medicine is totally foreign to me, being in psychiatry. I do think the situation is problematic and the patients will indeed suffer, but I don’t think lawsuits are the answer. It sounds like maybe the corporate group might be the bad guys though, which is why the hospital is suing to get the noncompete removed. Before you mentioned that I was wondering why the docs would want to work directly for the hospital, but that makes sense, if the majority were not on board with selling out.

    #233456 Reply
    mkintx mkintx 
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    The burden is on the insurers to provide an adequate network, and if they refuse to pay high enough rates that physicians want to contract with them, then the state department of insurance needs to step in and fine them for having an inadequate network.  It sounds to me as if the anesthesiology group is fed up with being strong armed into accepting the low rates that the insurer is offering, and the hospital is now paying the price as well.

    That said, I firmly believe that non-compete clauses are evil.  I know they are not enforceable everywhere, but they even when they are not, they are an expensive deterrant.

    #233478 Reply
    Avatar okayplayer 
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    This is a story about a group of physicians who sold to PE and now have zero control over the negotiations with insurers, as they are employees of the PE firm. This is about the greed of the PE firm and greed of the commercial insurers.

    #233482 Reply
    Avatar jacoavlu 
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    certainly an important part of the issue:

    “This is an alleged breach of Anesthesia Associates and Trinity’s contract, which requires the group to be in-network with those insurers, according to the lawsuit.”

    An obligation to remain in network may understandably be part of an exclusive professional services agreement for hospital based providers that want exclusivity, like anesthesia, radiology, pathology, ED, others. It’s understandable from the hospital’s side. Of course we don’t know whether this is the owned anesthesia group being aggressive, flexing muscle and asserting leverage, or the group being fed up with low or declining reimbursement and taking a stand.

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    #233484 Reply
    Avatar Scarftheverb 
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    This is the business model of these private equity firms in anesthesia (and probably most other fields).

    The pitch is something like this:

    We give you (PP partners) $2M paid out as capital gains over 5-7 years, and in return you give us 30% of the money you make in perpituity. Then we’ll use our leverage to renegotiate a 30% increase in unit value with the insurers and you’ll end up making just as much as before. It obviously doesn’t always work out like that in real life, and even when it does is driving up the cost of healthcare. Usually a good deal for the guys 5-7 years from retirement and a bad deal for the ones 20 years from retirement.

    Avatar okayplayer 
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    ^^^^ gets it

    #233498 Reply
    Zaphod Zaphod 
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    Still the hospital suing the group makes little sense, if they really cared and are losing that much revenue, it seems theres quite a bit of money there to make everyone happy. Of course they may just be trying to get them from the PE firm, which may not be a bad thing if they can swing it.

    That clause about being in network would put the squeeze on any physician between the insurer and the hospital basically forcing them to be a taker of any price to keep privileges/job, with zero negotiating ability, which would be a horrific precedent.

    Only good thing could be getting non competes destroyed, but hospital will want those as well of course.

    That anesthesia is almost always out of network isnt an accident of course, its a business practice, one which the hospitals gladly partake in, and that laisse faire taker attitude is how we all lose in the future.

    #233512 Reply
    Liked by Tim, q-school, RocDoc, billy
    Vagabond MD Vagabond MD 
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    Still the hospital suing the group makes little sense, if they really cared and are losing that much revenue, it seems theres quite a bit of money there to make everyone happy. Of course they may just be trying to get them from the PE firm, which may not be a bad thing if they can swing it.

    That clause about being in network would put the squeeze on any physician between the insurer and the hospital basically forcing them to be a taker of any price to keep privileges/job, with zero negotiating ability, which would be a horrific precedent.

    Click to expand…

    Exactly! Once the insurer gets wind of the requirement for the group to be in network, the next contract that’s gets offered is for 50% Medicare.

    "Wealth is the slave of the wise man and the master of the fool.” -Seneca the Younger

    #233555 Reply
    Avatar jacoavlu 
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    I read the lawsuit. It seems the primary focus of the suit is to get the company to release the docs from their non compete so that the hospital can employ them. Per the lawsuit it seems that the group is required to release the docs from the non compete if the services agreement is terminated. The hospital has offered employment to all the docs and said they will defend them in case the group sued the docs for violation of the non compete. They do also ask for damages as a result of the group breaching the contract but did not specify an amount

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    #233628 Reply
    Zaphod Zaphod 
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    I read the lawsuit. It seems the primary focus of the suit is to get the company to release the docs from their non compete so that the hospital can employ them. Per the lawsuit it seems that the group is required to release the docs from the non compete if the services agreement is terminated. The hospital has offered employment to all the docs and said they will defend them in case the group sued the docs for violation of the non compete. They do also ask for damages as a result of the group breaching the contract but did not specify an amount

    Click to expand…

    This makes sense. Would be a welcome development for PE to start losing battles like this and money and leave the medical world, but theres just too much money involved I imagine.

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