How does your organization ensure that its financial relationships with physicians are compliant with federal regulations? Here are just a few tips to help you get started today.
1. Is your organization fully aware of Stark Law and Anti-Kickback statutes, as well as the fines and penalties for non-compliance?
Many organizations we find who are non-compliant with federal regulations aren’t aware of the severe penalties. Physicians themselves hold considerable risks, both financial and to their reputation. However, given hospital’s reliance on CMS, the penalties can have a huge impact. Sanctions for hospitals violating Stark law include inability to bill to CMS, refunding payments (up to three times the amount of the initial payment), and denial of payments. Audits can be extremely costly to an organization and will run into the millions of dollars for penalties and fees. In early 2013, Intermountain Healthcare paid a $25 million settlement involving 209 physicians. In 2012, HCA settled a case involving imaging referrals for $16.5 million.
2. Does your organization have contracts for all contracted services/positions?
It’s important to document all financial arrangements with physicians. This is easier said than done, especially when it comes to contracting for call coverage or medical directorships. Work with administrators and chiefs of staff to ensure that all contracted positions are well-documented and contracted, with payment rates and expiration dates clearly articulated.
3. Do you track or automate contract expiration dates?
When organizations deal with hundreds of contracts that renew throughout the year, keeping organized is critical for successful and timely renegotiations. If your organization doesn’t have a contract management system built internally or contracted externally, obtain or create one. Automate the process of renegotiation once a contract is three or six months from expiration, and decide on a consistent process for addressing and executing renewals.
For more compliance tips, check out our Compliance Risk Checklist.
These contracts provide for pediatric hospitalist services, most frequently provided by board-certified pediatricians. The contracts provide physician staffing for dedicated programs in which at least one physician is available or on-call at all times to:
- Provide general attending coverage for pediatric inpatients
- Serve patients who require a consultation or admission, and who do not have a primary pediatrician or whose pediatrician does not have privileges at this facility
- In some hospitals, the pediatric hospitalist staff attend newborns following delivery
- Provide consultation services requested by physicians in other services
In addition, pediatric hospitalists may provide attending physician management services for private patients whose physicians elect to use a hospitalist service for inpatient management. Many contracts require at least one physician to remain in the hospital at all times. In low-volume programs, after-hours and weekend coverage may be provided on an on-call basis, generally with daily rounds. Many services require attendance at high-risk births, as requested, as well as first-responder service to the neonatal intensive care unit when a neonatologist is not in-house.
Volume-related benchmarks include total net annual payments excluding medical direction in ratio to average daily census of the whole hospital.
Key Factors to Consider in Contract Analysis:
- Is coverage on site 24 hours per day? Are weekends included?
- How many physicians are required to manage the case load?
- What is the average daily census attended by the hospitalist service?
- What are the professional fee collections per physician? How do collections compare to industry benchmarks?
- What is the frequency of call or coverage for the participating panel?
- Is the in-house coverage requirement less than 6 hours per day or less than 42 hours per week?
- Is the proportion of Medicaid or public patients extremely high or low?
No doubt about it, hospitals have been spending more on physician coverage and administrative payments than they have in the past. According to our database and 200+ subscribing facilities, we observe a ten percent increase in hospitals paying for coverage alone–not to mention administrative payments.
The Affordable Care Act could have several effects on physician call and administrative payments. Expanded insurance coverage could relieve the burden of providing care to patients who were formerly uninsured and unable to pay. Physician income could increase as the result of having more people insured privately or through Medicaid.
On the other hand, physician fears over decreasing reimbursement from CMS and Medicaid programs could spur them to seek alternative income streams, including call coverage per diems and administrative payments.
As most things with health care reform, we’ll have to wait and see. What do you think? Will physician administrative call payments and administrative rates increase or decrease as we implement the Affordable Care Act?
Physician contracting and documenting FMV doesn’t have to be an expensive headache.
Prepare for negotiations at least three to six months in advance.
Knowing the timing of negotiations across the year is essential to keeping your physician contracting process running smoothly. If your staff proactively manages upcoming contract renewals, you will have the upper hand in negotiating more advantageous contracts. If you know the scope of payments across your organization in advance, you can prioritize contracts, set budget goals, and conduct informed negotiations.
Use market data and tools to quickly segment contracts and document FMV.
The most efficient organizations use high-quality market data to identify market ranges for physician contract rates, saving consultants for complex or unique situations. If you segment your contracts in advance, you can plan and budget for ad hoc FMV while using market data for straightforward agreements. Systems can gain even greater value by setting standards and processes for contract rates. Some benchmark systems, such as MD Ranger, provide contract-specific reports that summarize a specific contract to the appropriate benchmarks for use in review and documentation processes. Do your research, and feel confident that your method will support good decision-making.
Click on the image below to see how MD Ranger can provide specific contract documentation.