Thankfully there are ways to catch most overpayments in physician agreements, particularly if the contracts are straightforward and benchmarking is available. Risks for overpayments are things like paying above FMV, or paying for too many hours per administrative deal are straightforward to discover with careful review and analysis of contracts.
But, there are overpayments that are a lot harder to catch—particularly when reasonable looking payments are spread across multiple agreements and turn out not to be commercially reasonable when considered in aggregate. We call these problematic payment structures “stacking” and the compliance risks associated with the issue are significant.
So, what does the OIG tell us about problematic physician compensation structures? Advisory Opinion 07-10 from 2007 talks about three areas to pay particularly close attention to that could result in compliance issues.
- “payment for lost opportunity cost that do not reflect bona fide lost income”
- ”aggregate on-call payments that are disproportionately high when compared to the physician’s regular practice income”
- “payment…resulting in the physician essentially being paid twice for the same service”
So how does stacking commonly happen? Let’s talk about some scenarios. The most common and rather difficult to catch is that a physician or physician group has two or more agreements with a hospital for coverage or administrative/medical direction services and payments for both haven’t been considered in aggregate. Though it’s certainly possible that the physician can coordinate his or her time to fulfill both responsibilities within a time frame generally understood as required to fulfill each agreement separately, the payments for both may go beyond what is commercially reasonable (particularly in the context of the physician’s clinical practice).