Critical Care Agreements: Key Considerations

Critical Care agreements represent formally organized services staffed by intensivist physicians with special training (usually pulmonary and/or critical care) to manage acutely ill patients in a critical or intensive care unit. Physicians are contractually obligated to spend a portion of each day on-site in the ICU serving as the primary attending physician for patients receiving critical care in the hospital. Critical and intensive care coverage contracts are most common in larger hospitals. Many hospitals only pay for medical direction for critical care units, but some pay for coverage.

Key Factors to Consider in Contract Analysis:

  • What is the average daily census of patients covered by the service and what fraction of the hospital’s total ICU census is attended or covered by the contracted physicians?
  • For those patients not attended by contracted physicians, is there a payment arrangement with the hospital?
  • Are the contracted physicians required to be board-certified in critical care, pulmonary critical care, or surgical critical care?
  • Is there an electronic ICU (eICU) service that provides back-up or after-hours coverage?
  • Is the in-house coverage requirement for less than 6 hours per day or 42 hours per week?
  • Is the proportion of Medicaid, Medicare, or unsponsored patients extremely high or low?

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What’s The Best Benchmark To Use When Using Market Data For Physician Contracts?

When using MD Ranger data, you must decide which range of the market data is most appropriate for setting your physician contracting rates. While taking into account compliance, physician requirements, and the realities of your market, things quickly get complicated.

In general, the 75th percentile is a decent guideline for compliance and FMV. If your contract falls at or beneath this benchmark, your contract is most likely within fair market value. If your contract rates fall above the 75th percentile, you’ll need to properly document the reasons for paying this particular rate, just in case of a dispute or audit.

Establishing an overal policy that includes a particular benchmark is a good choice for many MD Ranger subscribers. Whether it’s capping physician contracts at the 50th percentile to control costs, or setting the limit at the 75th because you are in a competitive market, many options can be functional and compliant.

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Executive Oversight for Physician Contracting

Designating an executive to have accountability for physician contracts is an essential step to ensure that your contracts are competitive, fair, and align to the organization’s overall clinical and financial goals.

Small organizations may designate the CEO or CFO to lead or hire an outside consultant; organizations with more resources may choose to place physician contracting under the compliance officer or general counsel.  Regardless of who oversees the process, it’s important to have an individual who understands what risks and challenges that physician contracting brings.  The executive should also either craft or oversee the creation of the compliance and documentation process. Minimally, the executive signs off on the organization’s physician contracting compliance program. In the unfortunate event of an audit, this executive should be very familiar, comfortable, and confident with the physician contracting process that she oversees.

Additionally, formal compliance committees are crucial to a health system’s overall physician compliance programs. Talk to your organization’s committee to determine if an annual review of physician-­‐specific contracts makes sense. Organizations that choose to review physician contracts have increased opportunity to catch undocumented arrangements, find opportunities to reduce costs, and identify any potential compliance risks. Committees don’t need to be large or unduly sophisticated; just ensure that the members are educated on Stark Law and they have access to high quality market data or valuation expertise.

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Physician Contracting Tips for Post Acute Facilities

The Affordable Care Act mandates that all post acute care facilities have compliance programs.  The law also includes stronger penalties for Stark and Anti-Kickback violations.  Post acute administrators have no choice but to get prepared.

Given that time is of the essence, what’s the fastest way to find appropriate medical director rates?  What is the simplest way to document compliance?

High-quality market data is the most straightforward way to ensure that your physician contracts are fair market value.  Once you have chosen the best data or product for your facility, check where your current rates fall within the benchmarks.  If you are under the 75th percentile, you can document your rate as compliant.  If you are selecting rates, determine a market range that will work for your organization across facilities and positions.  Consistency is hallmark to a successful compliance program.

Need more help with physician contracting compliance?  Are you a post acute facility administrator?  Email me at This email address is being protected from spambots. You need JavaScript enabled to view it., and I’d be happy to speak with you about simple strategies to be prepared.

allison

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