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.


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FMV Benchmark Range: What Percentile is Best?

Our subscribers frequently ask us where the majority of their physician contracts should fall within the market ranges. When setting standards and procedures, which rates are compliant with Stark and which ones aren’t?

While Stark doesn’t explicitly outline what market range is off limits, it is an industry-wide standard to avoid entering into a contract above the 75th percentile. Generally speaking, if you are compensating a physician at or below that level, you have little cause for concern in justifying the rates at which you pay her. Allow that payment to creep over the 75th, and you may have cause for concern if you haven’t properly justified and documented your reasons for compensating more.

However, consider the situation of your hospital. While all health care providers in the US have important things in common, each and every facility is unique in some way.  Is there are aspect of your organization, community, or region that might affect physician recruitment or compensation?  Are you attempting to reduce costs, therefore setting compensation no higher than the 50th percentile?

We’re curious: what is your standard for contracts?


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Hot Compliance Tip: Identify and Segment Your High-Risk Physician Contracts

All hospitals have at least one incredibly challenging, contentious relationship with a physician or a physician group.  How does your organization keep track of these hot-button contracts, ensuring that there is plenty of time to negotiate before the contract expires? How do you make sure that their compensation is compliant with Stark and within fair market value?

It’s important to get your physician contracting team organized.  Straightforward policies and procedures guide operations, as well as provide consistency that’s important for compliance. Set alerts in your contract management tool, or task one person on your team to stay on top of expiring contracts at least six to eight months before their anniversary date.

Analyze your physician contracts and segment by type.  A straightforward way is by service (emergency call, administrative, hospital-based service, hospital-based clinics, etc).  If your organization is a large health system, classifying by region or by state could be helpful. Classify the dollar amount (high value or low), as well as the quality of the relationship with the physician or group. Don’t be afraid to create a grading system to rate the security of the contract and the quality of the relationship with the hospital. Segmenting your contracts by relationship strength can help you quickly determine the number of physicians and number of contracts that might need TLC. Segmentation helps as you analyze the market rate for the contracts, and helps prioritize the most important contracts your organization holds.

Need more help with contract management and organization? Download our compliance checklist here:


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Pay for Performance: A Growing Trend in Physician Contracts?

MD Ranger has discovered that more and more hospitals are incorporating incentives into physician contracts.  While only 11% of the hospital based service contracts include incentive components, they have the potential to comprise a significant portion of contract payments.  The most common metrics for incentive measurement include quality (86%), patient satisfaction (60%), and cost (31%).  Incentives based on quality metrics have grown, while those for cost metrics have decreased.


Do you need help benchmarking your hospital-based agreements?  Email me at This email address is being protected from spambots. You need JavaScript enabled to view it. and I’d be happy to assist.


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