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Co-management arrangements between outside physicians and hospitals are ubiquitous in today’s value-based healthcare environment. It’s easy to understand why many institutions have turned to this methodology. Often, these agreements improve care and cut down on unnecessary variation, which, according to Hospitals and Health Networks Magazine, accounts for around 30 percent of all healthcare costs.

But before you shop around for a local doctor with whom to partner, make sure to consider a few key implementation tips from hospitals and health systems that have established co-management agreements.

Improve low performers first
When considering where to implement your new co-managed service line, look at low-performing departments first. According to GE Camden Healthcare Group, most successful co-management arrangements are often centered on departments in need of improvement. For many hospitals, cardiology and orthopedic departments require the most attention.

If you’re worried about missing other trouble spots, remember that a single co-managed service line can improve care outcomes across your entire campus. Improved operating room efficiency for one department leads to an overall improvement in patient turnover within the operating room.

Carefully consider physician contracts
The first step in establishing a co-management agreement is actually drawing up a contract for your physician. Keep in mind, quality should be your key concern when drafting this document, reported Becker’s Hospital Review. Establish a base pay rate for your physician and add on a series of quality-based incentive bonuses.

“When it comes to payment, all compensation must be based on fair-market value for the services provided,” Matt Kossman, senior director at Surgical Care Affiliates, told the publication. “What makes these agreements unique is that compensation can be structured such that a portion is ‘at-risk’ and based on the achievement of predetermined outcomes.”

Additionally, make sure to factor in The Anti-Kickback Statute and The Stark Law when developing your agreement. If you plan to enter into a partnership with a group of physicians organized under a limited liability company, ensure every member is an active participant and has his or her own quality standards to meet. If you’re unsure of how to proceed with this step, the Office of the Inspector General offers a compliant template that, if followed, will keep you in the clear legally.

Engender a compliance culture
Establishing a culture of compliance will improve your chances of implementing and facilitating effective co-management agreements. According to GE Camden Healthcare Group, hospitals that have a track record of complying with federal healthcare regulations are more likely to develop legally and clinically co-management arrangements than institutions that let things slip.

If you suspect that your institution might be on weak footing from a compliance perspective, there are several steps you can take to improve, reported Becker’s Hospital Review. First, organize an internal billing and coding audit. Once you’ve pin-pointed your problem areas, organize training sessions for employees to go over your findings and appoint a compliance officer. These initial steps will put you on the path to developing a healthy compliance culture fit for co-management.