Clinical Co-management Summary
Robert Cohen
Kutak Rock LLP
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• Clinical Co-Management Agreement compensates
physicians for the management of a hospital department
or service line
• Contract is between the hospital and a management
company formed for the purpose of providing the
clinical co-management services
• Contract typically provides for fixed and incentive
compensation
• Contract term is typically one to three years, renewable
by mutual consent, with compensation adjusted annually
• Longer term possible if no bond-financed facilities involved,
but compensation should be reevaluated annually and current
guidance indicates that incentives metrics should be renormed
Overview of Clinical Co-Management Model
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Legal Structure of Transaction
Hospital
Hospital
Management
Company
Management
Company
Management
Board
Management
Board
Finance
Committee
Finance
Committee
Quality
Committee
Quality
Committee
Physicians
Clinical co-management services
Fixed and incentive compensation
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Legal Structure of Transaction
Hospital
Hospital
Management
Company
Management
Company
Board of
Managers
Board of
Managers
Finance
Committee
Finance
Committee
Quality
Committee
Quality
Committee
Clinical co-management services
Fixed and incentive compensation
Physicians (individual
and/or groups)
Hospital
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Structure of Management Company
• Typically a limited liability company
• Ownership can be by individual physicians or by entities
owned by individual physicians meeting investment
criteria
• Hospital may also be an owner
• Governance generally delegated to a Management Board
structured to provide representation of the participating
specialties
• Board subcommittees may be used to facilitate
performance under Management Contract (e.g., Finance
Committee, Quality Committee)
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Physician Participation
• Typically limited to physicians in a position to
help Management Company perform its services
• Hospital active/provisional medical staff membership
in good standing
• Practice in a relevant specialty
• Qua