Clip this guide to PSO requirements
Clip this guide to PSO requirements
HCFA isn't making it easy to apply
The achievement of an aggressive goal involves a good amount of elbow grease, and the provider-sponsored organization (PSO) concept is no exception. After all, if it was easy, everyone would be able to do it. So it's no surprise that the Health Care Financing Administration (HCFA) has not made it easy for providers to enter the PSO arena.
R. Steven Venable, MD, FAAFP, FACEP, chairman of the board of the American Association of Provider Sponsored Organizations in Tampa, FL, and other experts offer physicians this guide to requirements for starting a PSO:
· It can take four to six months before HCFA begins reviewing the Competitive Medical Plan Application, which PSOs must fill out. Then regional HCFA offices will schedule a site visit about three to six months after receipt and acceptance of a completed application.
· Unlicensed provider organizations that form a PSO must meet a two-part test, says Peter N. Grant, JD, PhD, a partner with Davis Wright Tremaine law firm in San Francisco.
- Your primary purpose must be arranging for the provision of health care services under contracts.
- You must be majority-owned by providers.
· PSOs must be at risk for the services they render, Grant says.
They can create this risk arrangement through capitation and percentage-of-premium withholds. "HCFA wants to be persuaded by you and your certification application that this is enough risk to cause you to care about, have an interest in, and be affiliated with a PSO," Grant recently told providers at an April seminar on PSOs, held in Atlanta by the National Managed Health Care Congress (NMHCC).
The risk arrangement could include global capitation for each enrolled member. If so, the PSO must provide all benefits covered by Medicare Parts A and B, and it must accept all beneficiaries with no medical underwriting or pre-existing exclusions, according to a PSO report written by Venable and Laurie J. Levin, JD, an attorney with Baker & Hostetler in Orlando, FL. The report is called Provider Sponsored Organizations, The Old Made New Again: Setting Up Provider Sponsored Organizations for a Medicare Risk Contract.
· The statute requires that health care provi ders have a majority financial interest in the enterprise, Grant says. This could mean that one physician or nursing home or hospital owns 51% of the PSO. But the affiliated providers must be broadly represented in the PSO's governing body.
· PSOs must submit marketing materials to HCFA 45 days before release, and they must meet the new compliance guidelines promulgated under the Health Insurance Portability and Accountability Act of 1996.
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