In case you missed it, the US Department of Justice Criminal Division updated their “Evaluation of Corporate Compliance Programs” guidance on April 30th. This document outlines how prosecutors could potentially determine if an organization facing a settlement may receive credit by demonstrating sufficient evidence that they are committed to compliance.
While having an effective compliance program has always been best practice, it's more important than ever given the updated guidance. Our Key Elements of Physician Contracting Compliance Programs white paper outlines how to construct a complete and efficient contracting compliance program.
According to the Department of Justice, 3 key factors are being taken into consideration:
1. Is the corporation’s compliance program well designed?
2. Is the program being applied earnestly and in good faith?. In other words, is the program being implemented effectively?
3. Does the corporation’s compliance program work in practice?
Additionally, as JDSUPRA wrote on May 29 “The Guidance provides that a well-designed compliance program requires a robust risk assessment process, and appropriate and updated policies and procedures; tailored training and communications; confidential reporting structure and investigation process; and the application of risk-based due diligence to its third-party relationships"
Given the most recent Guidance from the Department of Justice, it is clear that not only does your hospital or health system needs to have a compliance system in place, you have to also prove that it is effective. If not, you could be on the hook for millions of dollars in a federal investigation. And if you do, you could receive a credit that would reduce the cost of a potential settlement.
What tools are you using to remain in compliance with Stark and AKS? Having physician contracting benchmarks such as MD Ranger can go a long way in showing the Department of Justice that you not only have a compliance program in place, but that you are leveraging the best possible data available when determining what you pay your physicians.
To celebrate our 10-year anniversary, MD Ranger is going to spotlight team members who have played an integral role in the growth of our company. In our second installment, we are highlighting our Founder and Chief Executive Officer, Penny Stroud.
Penny is the Chief Executive Officer and a Co-Founder of MD Ranger. Her areas of expertise include a broad range of strategic business planning and market analysis for health care organizations, including hospitals, medical groups, health systems, other types of providers and organ procurement organizations. She is a trusted advisor to boards, management and physician leaders as they position for the future and identify market opportunities.
Penny began consulting for health care providers in 1978 and has extensive experience in the development of detailed business plans for health services that analyze financial and market performance and define strategies for future performance or size adjustments. Some of her skills include market research, physician-hospital integration, reimbursement analysis and an understanding of the financial and staffing operations of hospitals, physician practice and health services.
In 2009, Penny co-founded MD Ranger, which provides high quality benchmarks for physician contracts with health care providers. Some of the benchmarks include medical direction, call coverage, hospital-based services, diagnostic services and medical staff leadership position. She has led the continuous growth and expansion of MD Ranger with subscribers nationwide. In 2015 she oversaw the launch of our web-based community physician need and demographic tool to help assess community need and to understand payer dynamics.
Why did you found MD Ranger?
I started my career in strategic and business planning for health care facilities and had a successful practice with wonderful clients. Fifteen years ago I, and my clients, began to be consumed by Stark compliance and FMV requirements. I got tired of begging clients for data for opinions and decided to exit the business, but thought that there had to be a better way to document FMV. Fortunately, many of my clients, including Dignity Health, agreed, so my partners and I joined with Michael Heil, another FMV consultant, to found MD Ranger. Ten years ago we issued our first set of about seventy call and direction benchmarks. We just released our tenth edition with more than 320 benchmarks used by hospitals, health systems, medical groups, LTACs, home care, consultants and associations across the country!
What makes you most proud when you think of MD Ranger?
My amazing team, co-founders and wonderful clients who are dedicated to exceptional customer service and production of high quality tools and benchmarks to simplify and improve compliance.
How has MD Ranger grown over the past 10 years?
We started with one full-time staff and about fifty hospitals, producing seventy benchmarks for call coverage and medical direction. Now we have nine staff and 160 facilities and we produce more than 320 benchmarks in call coverage, medical direction, physician leadership, diagnostic and testing, uncompensated care, and even clinical hourly rates. We also offer a comprehensive set of analytic tools that clients can use to summarize and benchmark all of their physician contracts against comparable providers. Finally, we’ve moved from published books to a fully supported online portal that allows easy look-ups and market rate documentation.
What types of hospital/physician agreements have changed the most over the past 10 years?
The number and scope of physician contracts has changed significantly over the last ten years, but I think the scope of hospital-based physician services presents the most striking change. When we started it was mainly large hospitals that engaged general hospitalists and intensivists. Now half of our clients engage general hospitalists and almost a third engage OB laborists to manage inpatients. The number of orthopedic, neurology, psychiatric, acute care surgery and other hospitalist arrangements is also rising.
When you look at physician contracting over the past decade, what surprises you the most?
I continue to be surprised at how many hospitals continue to struggle with documenting fair market value, and how labor intensive and expensive the compliance process can be. Most of our MD Ranger subscribers have been able to streamline their contract approval and compliance documentation process. For systems, it has enabled a consistent foundation with standardized policies and procedures across facilities. For individual facilities, it has provided a simple but broad platform for FMV documentation and an invaluable tool for monitoring and budgeting physician costs.
What do you see as the most challenging aspect of physician contracting for hospitals? For physicians?
For hospitals, the challenge is dealing fairly with physicians across the organization and balancing cost/benefit. For physicians, it’s ensuring they get a fair deal, and deciding on how working for and in a hospital fits into their life and practice.
What do you think will change in hospital/physician agreements over the next 5 years? What won’t change?
The structure and scope of hospital-based physician agreements will continue to evolve as staffing needs and revenues become more predictable. However, the complexity of these agreements will remain due to the multi-dimensional demands and expectations of the positions. If we move toward broader coverage by fewer payers, there will have to be major changes in how providers are paid. Health care is an industry that is ripe for disruption.
Do you volunteer or do any philanthropic work?
I am on the board of two organizations, the regional board for the Cystic Fibrosis Foundation and the Myanmar Foundation for Analytic Education. One of my daughters has CF and the challenge remains to find a cure and improve quality of life for the many people who suffer with CF. MFAE supports a small private school in Yangon that provides a rigorous pre-collegiate program for young people. I’ve had a lifelong interest in Burma and this is one small way to help that country transition to an informed, skilled populace.
What do you do in your spare time?
I love to hike, travel, and spend time with my children and grandson. I’m also an avid gardener – it’s my psychotherapy.
What might someone be surprised to know about you?
That’s a tough one, but my kids might say that the surprise is being the CEO and co-founder of a SAAS company.
We are frequently asked by our subscribers and clients on how to best engage physicians in the compliance process. Here’s a checklist to help create and maintain positive relationships between legal and compliance executives and physicians.
Get to know your physicians.
Introduce yourself in the hallways or join them for lunch. And while you might not be an expert, try to be as knowledgeable as possible about their profession and their specific roles and responsibilities.
Stay in constant communication with physician leaders.
As simple as it may seem, connecting with physicians who are leaders within your organization and educating them on your compliance message is a great way to communicate with the broader physician group. By engaging and educating physician leaders, they are then able to carry your message to other physicians.
Create or maintain a culture of compliance.
It takes a village to create a culture and it starts from the C-suite down to every level within your organization. Simply put, if your executive team doesn’t treat compliance, safety and quality as a top priority, how could you assume that your physician will take your message seriously?
Educate and conduct regular trainings.
Keep your physicians in the loop on enforcement news, advisory opinions, regulations, trends inyour state, the OIG work plan, as well as your organization’s overall compliance process and information relevant to their speciality. Some best practices include regular trainings (either in person, online or even hiring an outside organization to do so) and incorporating tactics that fit the respective learning styles of your physicians.
Have a clear cut, straightforward definition of FMV.
Many physicians become suspicious when it comes to FMV since they may interpret it as an excuse to be paid less than they feel that they are deserved. We advise that you have a clear cut, straightforward definition of FMV and have real-world examples of what it means by sharing the risks of non-compliance.
Learn best practices from other departments in your organization.
We advise that you look at other departments within your organization on how they successfully work with your medical staff and gain best practices from within. By having a clear consistent message while promoting a culture of compliance from the top down, trust can be established with your physicians as you can build, foster and grow relationships that enhance the goals of your organization.
Last week was an expensive one for Gary Newsome.
On April 30, the Department of Justice announced that he has agreed to pay nearly $3.5 million to settle false billing and kickback claims from when he served as CEO of Health Management Associates between 2008 and 2013. Federal prosecutors alleged that Newsome directly pressured his emergency room physicians to increase admissions when many patients could have been treated in less expensive outpatient facilities.
In their press release, the Department of Justice stated:
“Patients deserve the unfettered, independent judgment of their health care professionals. We will pursue those who cause hospitals to offer financial incentives to physicians in return for improper patient referrals that undermine the integrity of our health care system.”
“Providers are expected to closely follow rules and bill properly. Further, in this case, the government contended that Newsome directed illegal payments for referrals,” said Derrick L. Jackson, Special Agent in Charge of the Office of Inspector General of the U.S. Department of Health and Human Services”
The Department of Justice is enforcing individual responsibility for corporate wrongdoing, and Newsome is just the latest example. Make no mistake - the government can and will come after you individually for Stark, Anti-Kickback and False Claims violations in addition to your hospital or health system. If you aren’t clearly defining, determining and documenting Fair Market Value for your physicians or if you’re routing patients to the wrong departments to increase costs, you could be next.