Medical Group Practice

Medical group practice, a form of medical practice that dates back to the 1800s, can be defined in a number of ways. The Medical Group Management Association (MGMA), an organization representing group practice executives, administrators, and managers, and the American Medical Association (AMA), the nation's largest physician association, consider medical group practices to have the following elements: (a) a formal or legal arrangement; (b) three or more physicians; and (c) shared business and clinical operations, facilities, staff, and equipment.

Recent federal health legislation regarding physician self-referral, known as the Stark legislation (named for U.S. Congressman Fortney “Pete” Stark), has defined medical group practice in a slightly different manner. First, the federal legal definition is broader in scope, including groups with two or more physicians. At the same time, this definition applies more stringent criteria that stipulate that (a) all physicians in the group must provide a full range of patient care services appropriate to their specialties and be responsible for the bulk of the care provided through the group; (b) group income and expenses must be distributed according to an established plan; and (c) decision making in the group must be centralized with respect to functions such as governance, budgets, billing, and use.

Regardless of how they are defined, the ways medical group practices look and act vary considerably. Medical group practices may be composed of physicians with the same specialty or physicians with different specialties. And they can include [Page 736]other types of medical professionals such as dentists and podiatrists. These groups may be embedded within larger health systems. They may work out of a single location or many locations. Medical group practices may or may not be physician owned. These practices can range in size from a few physicians to thousands of primary-care and specialty-care providers. One of the best-known medical group practices in the nation is the Mayo Clinic, which is based in Rochester, Minnesota, and employs more than 3,300 physicians, scientists, and researchers at multiple sites across the country.