Video Spotlight: COVID-19's Impact on Physician Arrangements

Posted on
July 23, 2020

COVID-19 Spotlight: COVID-19s Impact on Physician Arrangements

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We've seen arrangements ranging from adding completely new services to providing backstops for physicians whose office practice volumes fell precipitously. Let me share some examples.

A hospital I worked with created a series of new services to address COVID, including an urgent care and testing site, a mobile unit to visit senior care facilities and a dedicated hotline. The hourly rate for physician services was set approximately 20 percent over the standard rates paid for urgent care. But the physician’s PSA also had to be adjusted to include double payment if hours in the COVID site overlapped and reduced hours required in the PSA.

I've also seen increased ICU staffing needs resolved in different ways. In one situation, a contract amendment was needed for an intensivist group to allow per diem payments for additional staff while in another, an anesthesia contract was amended to repurpose anesthesiologists from outpatient surgery to care for critical patients in the ED and ICU.

I've also seen a number of medical groups amending PSAs that paid physicians based on productivity due to the 50 to 80 percent declines in patient visits. Compensation plans were adjusted in the short term, with some groups selecting a benchmark-based floor or guarantee and others looking back to historical compensation to stabilize income.

In each of these situations, contracts had to be amended with negotiated payments, performance and length of contract decisions, many of which will require ongoing discussion and revisions. The short turnaround required to execute contracts in response to the crisis was facilitated when organizations had ready access to high quality benchmarks and a designated contract manager who was familiar with existing contracts and could monitor payments and terms.