Physician contract compliance matters, first and foremost, because breaking federal law comes with hefty fines. To give a recent example, a Montana hospital paid $24M to the federal government for violating the False Claims Act, Stark Law and the Anti-Kickback Statute. And it can get a lot worse than that. Settlements can reach hundreds of millions of dollars, and executives can be held personally responsible. But here’s the kicker: You can be under investigation and not even know it.
The government could be performing an audit on your organization’s physician compliance program without your knowledge. This is due to the False Claims Act, which enables people within your organization, known as “whistleblowers,” to inform the government of non-compliant practices. If there is a lawsuit, whistleblowers even get a share of the settlement.
If you’re performing regular internal audits of your physician agreements and have an organized physician contracting program in place, you will have a better grasp of what you’re spending. A solid understanding of your organization’s financials makes it easier to make informed decisions and ensure your physician agreements fall within federal regulations.
In a nutshell, this underscores the importance of running a tight compliance program. Learn more about how to implement a solid compliance program in which you define, determine and document FMV here.
The Department of Health and Human Services announced a “regulatory sprint to coordinated care” in June 2018, a new initiative to remove regulatory barriers that impede the transition to a coordinated, value-based health delivery system. The debate includes a discussion on the impact of Stark and AKS regulations. This summer, government agencies have been attacking these questions head on. Two Requests for Information have been published and CMS held their comment period on Stark, or the Physician Self-Referral Law. The OIG has focused primarily on AKS and how to add or alter AKS safe harbors. The comment period will end at 5pm on October 26.
It is unclear how AKS and Stark rules impede value-based care. Many argue that laws like AKS were written with a pay-for-service model in mind, and not the pay-for-performance model that today’s health leaders are working to build. Gainsharing and co-management agreements are two of the types of physician agreements that must be structured carefully to address potential regulatory concerns. The OIG aims to gather feedback on the details and exceptions to AKS that are particularly difficult for health care organizations to navigate as well as identify new safe harbors or changes that would actively promote value-based care.
Various organizations have submitted responses to both RFI’s. In response to CMS’s RFI, The American Hospital Association wrote:
To reach the full potential of a value-based system, the Stark compensation regulations must be reframed to meet the objectives of the new system, through the creation of a new exception designed specifically for value-based payment methodologies, and reforms to the personal services, employment, and risk sharing exceptions.
What should we expect moving forward? For now, officials only seem to be considering small adjustments to the laws and regulations, in response to the large number of comments from industry leaders. How far they’ll go after that, we’ll have to wait and see.
If you are looking for a valuation firm to support your organization’s compliance program, you’re going to want to do a thorough investigation of each firm under consideration before making your decision. The following guide will help ensure you get the essential information you need.
The National Association of Certified Valuation Analysts (NACVA) provides two types of credentials: the Certified Valuation Analysts (CVA) and Accredited Valuation Analysts (AVA) credentials. Take note of the credentials of the consultants you are considering.
Ask direct questions about a valuation consultant’s experience in your field. How many opinions have they done? Do they have healthcare-specific experience? This is important! Each industry is different, and healthcare compliance comes with numerous unique complexities. The valuation firm you choose should be knowledgeable and experienced when it comes to physician valuations.
Evaluate Their Work
Don’t be afraid to put a consultant to the test. Can they talk about their methodology and how they reached their conclusions? Are you comfortable with that methodology? Do they explain themselves in a clear and concise way? Be wary of too much jargon; a trustworthy expert will be straightforward with you. It is an asset if they are willing to talk to a counterparty, such as a physician, during negotiations. In the case of an audit or an external investigation, it is vital that your organization is working with a firm that can defend and justify its work.
Look at Examples
Ask for a redacted valuation. Is the opinion well-written, focused, and concise?
Examine the firm’s disclaimers. They should be sensible and minimal, without too many caveats.
Compliance is a non-negotiable priority for hospitals and hospital systems, and the valuation firm you choose plays a big role. Your organization should be working with a valuation firm that is compatible with your company culture. In order to ensure that you are getting the quality opinions you require, you should be working with experts who understand your organization’s unique needs. But what does “cultural fit” mean, in this case? Here are some MD Ranger guidelines for considering whether the valuation firm you are considering will make for a reliable, cooperative, and honest compliance sidekick.
First, consider communication style. Do you feel like you are on the same page when discussing your organization’s goals? Are they honest and open with you about what they can offer? Do they use a lot of jargon, or are they clear and concise when discussing their work? Think over your past conversations. Did you get the sense that your expectations were aligned, or did you doubt whether they understood your needs? If you have any insecurities here, dig deeper. Don’t get caught up in a situation in which your priorities are not being heard or respected. Communication style can tell you a lot about the potential of a relationship; notably, is your organization in attentive and trustworthy hands? Your compliance program needs to be boosted and supported by the valuation experts with which you work.
Work quality standards are extremely important. Do the firms you are considering meet your expectations? Do not settle here. In order to appropriately analyze, negotiate, and document FMV for physician agreements, you need high quality work done on the valuation side.
Are your philosophies aligned? It might sound unrelated to physician contract compliance, but it isn’t. It boils down to the same question of values that all organizations consider. When one organization looks to work with another, the strength of the relationship depends on a similar philosophical approach to the work at hand. During a valuation firm’s pitch to your organization, listen for their “why.” Why are they determined to serve you? What principles drive them? It’s not hard to tell when someone performs their work with integrity. Choose that person.
Finally, find out if the valuation experts you’re talking to have walked in your shoes. Although not a reason to cross someone off your list, it’s a bonus when someone has had similar experience. They will likely show more empathy for the challenges you face and be more attentive and communicative about their work for you.