Are You Considering A Super Group?


Are You Considering A Super Group?

Many physician groups struggle with the decision of forming or joining a supergroup. Some physician groups may be too small to sell to private equity or reluctant to sell to a hospital as many physicians want their autonomy. The decision to join or form a supergroup is something that many sole practitioners or smaller groups are facing.

A physician supergroup is a group of physicians or physician practices coming together under one employer identification number and legal entity. Supergroups may either be single or multi-specialty and are typically comprised of at least 20 physicians.

There are many factors that are driving physicians towards supergroups. With value-based payments, health insurance companies lowering reimbursements there is tremendous downward pressure on fees. Increased malpractice insurance costs, Stark Law complexity, the cost of electronic health records, sole or small practitioners are feeling the squeeze.

The type of group practice is also changing. Accountable Care Organizations, independent physician associations, and hospital-based practices are playing major factors in the physician landscape. Sole practitioners and small groups are all trying to determine how to practice. Let’s review the advantages and disadvantages of super groups.


Supergroups can drive economies of scale. They can better negotiate insurance reimbursements and hospital contracts. The negotiating power can also reduce costs such as malpractice insurance, employee benefits, software, and medical supplies.

Management and administrative functions can be centralized. A supergroup can handle the day to day administration such as billing and collection, payroll, and benefits administration better than a sole practitioner or small physician practice. Policies and procedures can be drafted and reviewed by professionals specializing in those functions. Those policies can be implemented into practice and changed as necessary.

The complexity of payment structures can be better addressed. With value-based payments (MACRA/MIPS), ever-changing CPT codes, supergroups have the resources to capture and bill for procedures.

For physicians looking towards retirement, supergroups very often have a buyout provision. Physicians don’t have to worry about selling their practice. Sole practitioners may lack a succession plan.

Supergroups can be more opportunistic. Many will offer ancillary services, i.e., orthopedic groups may start physical therapy practice or orthopedic urgent care facilities. These are additional revenue streams.


Even though there some great advantages to supergroup formation, there are difficulties. Practices coming together to form a supergroup face significant challenges. Loss of control, clash of cultures, implementation of policies and procedures, are significant issues. Other challenges will include choice of entity, dissolution of old entities, real estate disposition, and choosing management.

Supergroups that have more than one location must determine how to allocate overhead costs. Salary and compensation formulas must also be determined. In multi-specialty supergroups, this can be especially challenging. For example, plastic surgery will be more profitable than pediatrics, with the more profitable specialty having to subsidize the less profitable one.

A supergroup may face more legal complexities. Stark and anti-trust laws may have a significant effect, and proper counsel must be retained and consulted frequently to not run afoul of regulations. The more partners in a supergroup also increase the chance of malpractice lawsuits.


As the challenges of operating a physician practice increase, supergroup formation is increasing. We reviewed the advantages and disadvantages of forming supergroups. A final decision must be reviewed with great care by the physicians, and their advisors.

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