Physician Contracting Strategies for Rural Hospitals

Rural hospitals have unique challenges in many cases. Physician contracting is no exception.

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It may be more difficult to recruit physicians to live and work in rural areas and it may seem like your only bargaining chip is to pay the physician whatever they ask for. Not is paying the physician whatever they ask for a budgeting disaster but, it could also lead to Stark law violations.

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Ensure that the payments you are negotiating are compliant by using market data matched to the service with a large sample size. Be sure to document FMV of the payment, otherwise you may be at risk for Stark law or Anti Kickback Statute violations.

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One alternative to paying a per diem for call coverage at facilities with a low volume in the emergency room where the burden of taking call is less would be to pay a per episode rate. This means that you only have to pay a physician when he or she is called in to the emergency room. Per episode payments may also be combined into a hybrid payment with a lower per diem amount.

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If you are trying to navigate physician contracts at a rural facility and have questions, we are happy to help. Email the MD Ranger team at info@mdranger.com.

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