Specialty Physician Groups have watched as payor consolidations have increased the purchasing leverage of health plans and physician hospital organizations (PHOs), and physician practice management companies (PPMC) have gained a competitive advantage over smaller, less organized physician organizations. In response to these pressures, providers of specific disease services have been entering into innovative business relationships for disease management that enable them to coordinate care delivery over a larger provider base and assume the financial risk for the health needs of an insured population. However, many of the business relationships and corresponding payment methodologies may conflict with current interpretations of federal and state statutes governing the provision of health services. In this article, we review the legal and regulatory issues that disease management organizations must consider when establishing organizational structures and financial arrangements. The information provided, while not intended to provide a formal legal opinion, is based on the experience Gambro Nephrology Partners (GNP) has gained while forming and operating specialty provider networks in a number of markets across eight states. GNP's preferred organizational model establishes joint venture partnerships with nephrologists that enter into contracts between payors and medical practices, and/or other health providers for the treatment of patients with end-stage renal disease (ESRD) on a capitated or bundled case rate basis. The partnerships, are founded on the principles of shared equity and shared governance. Although there are several business issues posed by these partnerships, this discussion relates solely to the legal issues that must be addressed in these organizations.
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