ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, May 15, 1996 TAG: 9605150055
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: SANDRA BROWN KELLY STAFF WRITER
THE MEDICAL CHAIN has made an offer to buy 42 local doctors' offices that may cover more than 200,000 patients.
If medical practices were army camps, you could say Carilion Health System is setting up a mighty long line of defense.
The Roanoke company already operating a chain of hospitals and other health care facilities said Tuesday it has offered to buy 42 physician offices that include 94 doctors in the Roanoke, New River and Shenandoah valleys.
The proposal means that by July internists, family practitioners, pediatricians and obstetricians from Abingdon to Strasburg could be adding the Carilion name to their shingles.
Contracts the company has offered to doctors must be accepted or rejected by May 28, said Don Lorton, Carilion executive vice president for strategic services.
Carilion owns or manages 14 hospitals from Big Stone Gap to Farmville and has divisions in home health and managed care services. It already owns medical practices that employ 59 doctors.
The additional practices would expand the system's territory and give Carilion and the doctors greater power to negotiate contracts with large groups such as state employees, said Dr. Jim Nuckolls, who belongs to a group Carilion wants.
Nuckolls, an internist, is one of nine doctors with Blue Ridge Health Associates in Galax. He said he was pleased with the offer. For his group to accept Carilion's bid, he said, all doctors in the practice must agree.
The contracts, which he said are "for several years," pay doctors a buyout amount plus a salary and allow them day-to-day control over their practices "within reason."
"There will be incentives to be efficient," he said.
Neither Lorton nor Nuckolls would reveal dollar amounts in the purchase contracts.
The medical practices Carilion has offered to buy represent between 600,000 and 700,000 patient visits a year by more than 200,000 patients, based on the accepted average of three visits per patient.
One of the advantages of affiliation with Carilion would be that individual practices no longer would have to deal with "increasingly complicated" insurance contracts, Nuckolls said. His office works with 453 insurance payment structures. "I had the staff count them," he said.
Nuckolls said the physicians would not be forced to use Carilion for services such as billing if there are less expensive services available.
Also, the doctors would not have to refer patients to Carilion hospitals.
"My patients who got wind of this were worried that they'll have to go to Roanoke," Nuckolls said. "There is no way our doctors would accept that. We want to support our community hospitals.
"If Carilion benefits it will be because we're successful practices and Carilion gets a return on its money," Nuckolls said. "This is not the hospital acquiring practices to generate hospital income. This is not that concept."
Nuckolls is chief executive officer of Blue Ridge Primary Care, the network that represents the practices and did the preliminary negotiating with Carilion.
Blue Ridge Primary Care was formed in 1993 by 10 Roanoke Valley practices and expanded last year. The network has been looking for a partner since last fall and had made overtures to several potential buyers including Columbia/HCA Healthcare Corp., a Nashville, Tenn., company that owns hospitals in Blacksburg and Pulaski.
The doctors wanted a contract that gave them equal voice in patient care procedures and the $10 million needed for a computerized information system that would link the Blue Ridge members.
Carilion has the computer capabilities, Nuckolls said.
In February, Carilion agreed to give the group $250,000 for exclusive negotiation rights through the end of May.
Carilion has an option to back out of the purchase if not enough practices in the areas it wants accept its offer.
Nuckolls said Carilion is particularly interested in doctor groups in the New River Valley, where it is locked in fierce competition with Columbia.
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