Health care providers use MD Ranger to set payment rates, document fair market value to comply with federal Stark and anti-kickback regulations. MD Ranger is used by hundreds of healthcare organizations, including hospitals, health systems, trauma centers, medical groups, LTACs, skilled nursing facilities, outpatient providers, and critical access facilities.
MD Ranger annually calculates compensation benchmarks from a database of more than 50,000 contracts to produce 1,600+ benchmarks for 350+ services. MD Ranger has rates for ED call coverage, medical direction, administration, hospital-based arrangements, locums, clinical hourly rates, diagnostic tests, telehealth, salary, and productivity. This year, MD Ranger reported 17 new physician services, including per delivery payments, Neuro-Hospitalists, Trauma Critical Care, and locum tenens rates for 26 specialties.
While payment rates in the MD Ranger database are very stable, significant increases in both hospital-based arrangements and ED call contracts were observed in 2022. Market forces such as post-pandemic labor shortages, reduced Medicare payments, increased patient load, and the No Surprises Act all contributed to the trends.
Penny Stroud, Founder and CEO of MD Ranger states “The COVID-19 pandemic exacerbated many long-standing challenges associated with physician contracting. An aging workforce, increasing specialization, and the growing divide between inpatient and outpatient physician practice continue to drive payment rates up. Benchmarks have increased the most in ED call and hospital-based group arrangements, with specialties like ENT, Oral/Maxillofacial, and Obstetrics increasing significantly. Payment for Gastroenterology services continued to rise, with a 10+% rise in median call pay and 20-50% increases in ERCP and other GI procedure payments. Trauma Surgery, Anesthesia, and General Hospitalist services command the highest annual median payments for hospital-based services, each on average costing more than $1.5m in total payments”.
Emergency Call Coverage Arrangements
ED call payments experienced the largest increases in several years. Of the 54 call services, only 24% declined at the median while 67% increased, including 30% of services increasing more than 10%. However, for the services that declined at the median, most increased at the 75th percentile, indicating increasing spread between the median and 75th percentile. Services 20% or more increases include ENT, Pediatric Surgery, and Obstetrics.
According to the MD Ranger database, the average hospital spends just over $4m per year on 13 paid ED specialties. The number of paid specialties shifts dramatically when viewed by hospital characteristics. Trauma centers and large hospitals generally have more than 2.5 times the number of paid ED call positions than their smaller counterparts and almost twice as many as the average non-trauma center.
Surgical specialties dominate the highest compensated services for ED call coverage. Neurosurgery continues to be the highest compensated coverage service with an average per diem rate of $1,720. However, when considering only Level I and II trauma centers, the average jumps to $2,440. Trauma centers consistently command higher rates for ED coverage services. MD Ranger calculates the premium for trauma centers on a rolling average, with this year’s premium at 23%.
Hospital-Based Services
Hospital-based service spending is the most significant category of physician cost for many hospitals. The services with the highest median payments in 2023 are General Hospitalists, OB Hospitalists/Laborists, and Anesthesia. MD Ranger has observed that the number and scope of specialist hospitalist programs reported by its subscribers continue to grow. Specialty hospitalist programs help to address coverage of the emergency department but also inpatient management in communities where it is increasingly difficult to find physicians willing to consult on hospital patients. MD Ranger reported Neuro-Hospitalist benchmarks for the first time in 2023.
General Hospitalist payments have steadily increased over the past five years, with median total annual payments growing from 1.2m in 2019 to 1.48m in 2023. Payments at the 75th percentile grew from 1.9m in 2019 to 2.4m in 2023. OB Hospitalist benchmarks show similar trends.
Psychiatric Hospitalist growth from 2019 to 2023 is exceptional. In five years, rates skyrocketed more than 400%, bringing the median annual payment closer to General Hospitalist and OB Hospitalist rates. We are starting to see additional specialties moving to a hospitalist model, including Gastroenterology, Orthopedics, Surgery and even Urology. Increasing emergency department volume, particularly for Medicaid and Medicare patients, and the lifestyle balance sought by many younger physicians among other trends, are driving hospitals to seek creative ways to address coverage for the ED as well as inpatient services.
Critical/Intensive Care physician payments have also increased. Since 2018, total payments for Critical Care/ICU physician service contracts have grown from an average payment of more than doubled, from a median per diem equivalent rate of $1,880 to $4,050 in 2023. Per physician per day coverage contract rates also increased from $1,160 in 2018 to $2,200 in 2023. With recent changes in the Medicare Fee Schedule, the No Surprises Act and a changing physician workforce, MD Ranger anticipates continuing pressure on these arrangements.
Administrative Arrangements
Annual payments for non-clinical positions and committee members such as Credentials Committee, Practitioner Health and Wellness Committee, Peer Review, and Patient Safety Officer. Payments for Credentials Committee have nearly doubled since 2021. Positions such as Care/Case Management, Utilization Management, and Residency/Teaching command a high number of annual hours, which have been increasing over the past five years.
Nonetheless, while more annual payments increased than decreased, overall payments were relatively stable from 2022 to 2023. Since the late 2010’s, MD Ranger has observed slight decreases in annual hours across services although there are exceptions. Hourly payment rates remained steady at all quantiles from 2022 to 2023.
Other Services
MD Ranger reports dozens of services in addition to call, direction, and hospital-based arrangements. Clinical hourly rates, per episode/per procedure/per delivery payments, diagnostic testing rates, and telemedicine payments have been collected for many years and demonstrate how, despite pressure to compete on margin, hospitals are investing more and more in physician transactions. We recently released a set of locums hourly rates for clinical and call coverage services to address the growing demand among our subscribers.
The growth in reported hourly physician payments for clinical services is indicative of the increasing role hospitals and health systems play in arranging and managing physician services. Contract terms often include payment rates for independent contractor and locums physicians to address gaps in coverage due to retirements, recruitment challenges and increased demand. In 2018, MD Ranger reported 26 clinical professional service rates. Five years later, 53 services are reported—a 104% percent increase. Rates have also continued to increase.
Pressure on individual services also exists. Retinopathy of Prematurity, a service MD Ranger has reported for a decade, has increased by nearly 30% at the median over five years from $38,500 per year to $45,000 per year. More dramatic increases can be observed at the 90th percentile. In general, we have seen a wider spread between Median and 90th percentiles in many benchmarks, illustrating the many factors that impact physician payments.
Key Takeaways:
· MD Ranger observed significant rate increases in a few specialties but saw modest increases in most.
· With the outcomes data supporting hospitalist programs, a growing number and type of specialties moving to hospital-based service arrangements, the most notable of which are OB Hospitalists, Psychiatric Hospitalists, and Neuro hospitalists.
· Medical direction and administrative contract rates, including hourly, have increased only slightly over the last five years.
· The cost of clinical hourly services and the use of locums is increasing somewhat dramatically in comparison to other services, reflecting growing recruitment and retention challenges across the spectrum of physician specialties.
Want to leverage benchmarking in your FMV process? We’d love to tell you more about how MD Ranger can help your organization streamline compliance and legal processes, as well as reduce your FMV spend. Email us today: info@mdranger.com.
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