Appropriate Physician Payments within FMV Range

Negotiations with hospital administrators can be difficult.  Whether it’s because you don’t like confrontations, or you are dealing with a tough executive, there are steps you can take to prepare yourself for the conversation.

Use the market data, as well as your current payment rate, to determine an appropriate payment range for your services.  If you are currently getting paid under the 50th percentile, determine the difference in pay that’s needed to get you to the 50th percentile.  Ask yourself if there could be a good reason for you to be paid at a lower percentile, like a robust payer mix or a large panel size.  If this is the case, think of additional reasons why your payment rate should change.  If instead you’re getting paid at or around the 50th percentile but have reason to believe you should get paid more, determine how much room you have to negotiate at or around the 75th percentile.  Keep in mind that most hospitals consider anything about the 75th percentile not to be “fair market value” unless there are special exceptions.  Special exceptions should include seniority within the physician community, a niche sub-specialty that you practice, any awards or special fellowships you’ve received, on-site presence requirement, or an extremely burdensome call panel.

If you have any questions, don’t hesitate to email me at This email address is being protected from spambots. You need JavaScript enabled to view it..  Check back next week for another tip!

allison

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Analyze Physician Contracts in Aggregate

MD Ranger prepared a quick list of compliance tips for hospital and health system executives dealing with physician contracts for administrative, leadership, on-call, and hospital-based services. These tips will help shape a new physician contracting compliance program or refine an existing program. Apply these tips to create a successful compliance program to help prevent Stark violations. 

Analyze your contracts in aggregate to understand if you’re overspending or consistently setting rates that are too high. Use benchmarks to compare your organization’s total expenditures to overall spending by peers. MD Ranger publishes data on total hospital spending annually by service for physician contracts and provides each of our subscribers with a report of their facilities’ contracts and how they compare to our benchmarks.

allison

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Negotiation Objectives for Hospital/Physician Contracting Conversations

Negotiations with hospital administrators can be difficult.  Whether it’s because you don’t like confrontations, or you are dealing with a tough executive, there are steps you can take to prepare yourself for the conversation.

Determine your objectives for the conversation.  Why do you want to discuss your compensation?  Are you hoping to get paid for taking call for the first time?  Do you want to raise your current rate that you’re being paid to be Chief of Staff, given the amount of time it’s taking away from your practice?  What is your desired outcome for the discussion?  Having a clear objective and desired objective for the negotiation will help ensure that you don’t walk away with an unsatisfactory conclusion or empty handed.

If you have any questions, don’t hesitate to email me at This email address is being protected from spambots. You need JavaScript enabled to view it..  Check back next week for another tip!

allison

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Determining Commercial Reasonableness and FMV for Physician Payments

MD Ranger prepared a quick list of compliance tips for hospital and health system executives dealing with physician contracts for administrative, leadership, on-call, and hospital-based services. These tips will help shape a new physician contracting compliance program or refine an existing program. Apply these tips to create a successful compliance program to help prevent Stark violations. 

Determine how you’ll establish and document FMV and commercial reasonableness for physician payment rates. We recommend having a discussion to define what’s best for your organization while considering cost, consistency, and efficiency. Research your options for published benchmarks, tools, and consultants, within the context of your organization’s goals and budget objectives. After you’ve made a decision, document your the approach and record the step-by-step process.

Consider:

  • Cost, efficiency, and scope of data (services, hours, percent paying, tools)
  • What percent of hospitals are paying for comparable services?
  • How many and how complex are your contracts?
  • What are your corporate, compliance, and cost reduction objectives?

The three options for establishing FMV are:

  • Market Data
  • Internal or external proprietary formulas
  • Internal or external ad hoc FMV opinions (valuations)

Options to document your compliance:

  • Written FMV opinions
  • Contract-specific benchmark comparisons (e.g. MD Ranger individual contract reports shown with market range and specific contract’s rate) Click on the image below to enlarge it.
    WoundCare
  • Internal certification document with market data
  • Combination of the above

allison

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