Issue link: https://beckershealthcare.uberflip.com/i/1406663
33 PRACTICE MANAGEMENT 63% of Q2 physician practice deals had private equity buyers By Laura Dyrda Physician practice deals heated up in the first half of the year, with private equity firms driving much of the activity. Bass Berry & Sims published a report in JDSupra, a legal anal- ysis publication, outlining deals for the first half of 2021. Six things to know: 1. There were 163 physician practice deals in the first six months of the year. 2. Private equity firms were the buyer in 63 percent of the sec- ond-quarter deals. 3. Most of the private equity transactions were add-ons to ex- isting platforms. 4. Thirteen percent of the deals were in high-demand prac- tices such as dental, gastroenterology, ophthalmology and obstetrics and gynecology. 5. Waud Capital Partners-backed GI Alliance, and RiverGlade Capital-backed U.S. Oral Surgery Management are among the most prolific private equity buyers this year, with three and five deals announced in the first half of the year, respectively. 6. Cano Health, a primary care practice operator, announced plans in June to buy Miami, Fla.-based University Health Care for $600 million in one of the highest-value deals so far this year. n More indirect pay arrangements scrutinized in proposed Stark update: 3 details By Laura Dyrda C MS aims to refine Stark Law regulations on indi- rect compensation arrangements for physician referrals to services performed by immediate family members. Law firm Ballard Spahr broke down CMS' proposed changes for JDSupra, a legal analysis publication: 1. In a 2022 proposed payment rule update released July 23, CMS added items to the indirect compensa- tion arrangement definition that clarify compensation units as "payment for anything other than services per- sonally performed by the physician (or immediate fam- ily member)." 2. The proposed rule update includes payment for space, equipment and services performed by a family member, or company the family member has owner- ship in. 3. CMS' modification would mean more arrangements between physicians and family members would be included in the indirect compensation arrangement definition than were originally covered in the 2020 final rule. n Physicians likely to seek new contracts as their productivity soars, pay drops: 6 report details By Laura Dyrda P hysicians were more productive in the second quarter of 2021 than in 2020, but pay has declined, according to a new report from KaufmanHall. e Physician Flash Report, released Aug. 24, surveyed almost 100,000 employed phy- sicians and advanced practice providers to gather insight on productivity, expenses and pay. e decline in physician compensation may have implications for future employment contracts. "Healthcare leaders should prepare for phy- sician demands to restructure contracts in anticipation of future public health emer- gencies. Efforts to increase quality incentives likely will be offset by physician interests in stabilizing base compensation," the report said. Six takeaways from the report: 1. Physician compensation per work relative value unit dropped 24 percent in the second quarter to $53.90 per wRVU, versus $70.88 per wRVU in the same period last year. Physi- cian pay per wRVU dropped 7.5 percent from pre-pandemic levels in the fourth quarter of 2019. 2. Physician pay per full-time employee was up 5 percent from the second quarter of 2020, hitting $312,799 in 2021. 3. Investment per physician also dropped more than 20 percent in the second quarter. e median investment per physician full- time equivalent was $232,583. 4. Net revenue per physician hit $631,488 in the second quarter, up 56.2 percent over the same period last year. 5. Quarterly expenses per full-time physician were up 21.3 percent to $875,878. 6. Physician practices improved efficiency in the last year, while support staff full-time em- ployees per 10,000 wRVUs has declined 15.3 percent since the second quarter of 2020. n