Managed care plans and the organizational arrangements with group practices

This article addresses the variety of structural and legal arrangements between group practices and health plans. The continuum of relationships will be discussed, including long-term arrangements whereby in exchange for long-term commitments to provide physician capacity, providers are given a capital contribution from managed care plans; management services organizations whereby managed care plans create management companies that provide turnkey management services in exchange for capital, with a commitment by the group practices to provide physician services to the health plan over a long period of time; mixed equity relationships where physicians and managed care plans jointly own the group practice, which group practice also has an ownership interest in the managed care plan itself; and acquisition of the group practice by the managed care plan. Each of these structures will be described, along with the legal issues that may be considered in any of these relationships.