MD Ranger announced the publication of new 2020 physician contract benchmarks for non-salaried physicians. The 2020 report underscores the significance of physician payments for non-clinical services as a major component of hospital spending. According to MD Ranger’s database, the average community hospital spends more than $8 million per year on non-employed physician arrangements. MD Ranger’s physician payment benchmarks include ED call coverage, medical directorships, administrative services, hospital-based services, medical staff leadership, telemedicine and diagnostic testing, in addition to clinical hourly rates.
MD Ranger’s 11th annual report features 600+ benchmarks derived from a database of over 39,500 contracts from 330 facilities in 31 states across the US, making it the largest survey of non-salaried physician payments. Health care providers use MD Ranger’s benchmarks to document fair market value and comply with federal Stark and anti-kickback regulations. MD Ranger is used by hundreds of healthcare organizations, including hospitals, health systems, trauma centers, critical access hospitals, medical groups, LTACs and other specialty and outpatient providers. Brian S Colonna, CHPC, HIPAA Manager of Privacy at Renown Health in Reno, Nevada, says, “Creating simple, effective policies for compensating physicians is crucial to remain compliant. At Renown, we use MD Ranger as the foundation for our physician contracting process. From identifying the right rates, to measuring overall financial performance, MD Ranger is easy and intuitive to use and has helped our organization do more with fewer resources”.
MD Ranger’s benchmarks demonstrate the cost and scope of services that health care facilities purchase from physicians. Founder and CEO Penny Stroud says, “In these uncertain times of the COVID-19 pandemic, healthcare organizations rely even more heavily on physicians for key services like emergency call coverage, medical direction, clinic staffing, emergency coverage, leadership and other administrative services. Providers across the country have used MD Ranger’s unique benchmarks to determine the right payment rates for both routine and pandemic-related physician services”.
Key findings from the 2020 benchmarks include:
- Despite growth in physician employment by hospitals, contracted services such as ED call coverage, administrative positions and hospital-based services--in particular hospitalists-- continue to grow in scope and cost
- Emergency department call coverage per diems increased 8% at the median, from $600 per diem to $650 per diem across all services. While not all ED coverage services increased in payments, many did: urology, interventional radiology, neuro-interventional and infectious disease all experienced significant increases.
- Payments for interventional services such as neuro-interventional, interventional radiology and stroke-related services continue to grow year over year. For example, in 2015, only 4% of MD Ranger participating hospitals paid for neuro-interventional ED call coverage while in 2020, 19% paid. Rates for these services have increased as well. In 2018, the 75th percentile per diem rate for neuro-interventional ED call coverage was $1,190; in 2020, it jumped to $1,400.
- Hospitals continue to move toward hospital-based service agreements to replace call coverage for a range of services, particularly laborists, critical care and general hospitalists.
- OB laborist agreements have increased in both percent of hospitals paying and total annual payments, while the percent of hospitals relying on ED call coverage arrangements for obstetrics has declined. Between 2019 and 2020, the average stipend payment for laborist programs rose nearly 20%.
- Other hospital-based services which saw increasing payments were critical care, pediatric critical care and psychiatric hospitalists; annual payments for each of these services rose more than 15%. Not all hospital-based services increased, however; the median stipend for both pathology and emergency physician services fell between 2019 and 2020. With COVID-related contingency plans, we may see continued growth in annual payments since many facilities staffed up to prepare for potential COVID patients while non-COVID volume and payer mix have been significantly impacted resulting in payment shortfalls.
New 2020 benchmarks include:
- Obstetrics - Second Call Coverage
- Podiatry Call Coverage
- Dental Call Coverage
- Plastic and Hand Surgery Call Coverage
- Department Chair: Behavioral Health
- Vice Department Chair/ Section Chief
- Department Chair: Pathology
- Supervision - Allied Health Professionals
- Obstetrics/Gynecology - Clinical Hourly Rate
About MD Ranger
MD Ranger partners with leading health care organizations to simplify the physician compensation process. Through a web-based product, MD Ranger helps health care organizations and medical groups set compensation and document FMV. MD Ranger’s approach streamlines the process and reduces the cost of compliance documentation and negotiation for large and small health care providers.
Physician compensation is complex. When determining compensation for an individual physician or even a group of physicians, many factors can impact what rate should be paid. Robust benchmarks and analytics are essential tools to develop and administer an equitable and market-competitive compensation structure; however, a compensation program is only as good as its design.
Factors such as payer mix, subspecialty credentials, program leadership positions or an individual’s national reputation may be relevant to consider as you create your physician compensation program. As new physicians are recruited, it is important to know how compensation of the recruited physician compares to others in the group. You need to ensure that her income is sustainable after getting off a guarantee, as well as make sure others in the group don’t become dissatisfied if pay rates vary significantly as a result of non-productivity-based factors. Lastly, choosing the market range where you want to target the majority of your agreements needs careful thought and judgement. Just because payments under the 75th percentile benchmarks, from a compliance perspective, are generally deemed “okay” doesn’t mean that your organization should pay at that level. Ultimately, thinking critically and using judgement is key when designing compensation plans and when applying benchmarks.