Physician Contracting for Exceptional Hospitals

1

Physician Contracting for Exceptional Hospitals A MD Ranger On-Demand Webinar

2

Are you an exceptional organization?

•  Trauma Center •  Children’s Hospital •  Academic Medical Center •  Critical Access/Rural/Small Hospital •  Unique geography or other circumstances •  A health system with a combination of the above

If yes:

You are likely to have unique considerations and challenges when it comes to physician contracting.

3

The Challenge:

•  Creating a compliant, standardized and cost efficient FMV documentation process for physician contracts

•  Finding resources and tools that address your organization’s unique features

•  Adapting resources and processes to optimize your time, costs and documentation output throughout the negotiation and contract approval process

4

Suggestions for Physician Contracting at Exceptional Organizations

5

Trauma Centers •  Level I and II trauma centers statistically pay significantly more

for physician services so it’s important to compare your organization to other trauma centers when determining appropriate payments

•  Not only do trauma centers pay more, but they have more paid positions for a broader range of services •  Call coverage may be more intensive and round-the-clock •  Hospital-based services such as anesthesia may have higher demand •  Uncompensated care may be a more important factor •  Medical directorships may be managing more complex service interactions

•  It is important to manage your overall contract spending strategically and document compliance carefully

6

Children’s hospitals

•  Outsourcing contracts for pediatric intensivists, pediatric surgery, neonatology, ROP and other pediatric sub-specialties are important to building market share

•  Benchmarks for these contracts can be hard to find •  Unique, super-star surgeons and specialists may drive high

compensation that requires strong documentation for directorship or leadership positions

•  Strong market data can also support budgeting internal funds flow for faculty and affiliated physicians’ coverage and medical directorships

7

Academic Medical Centers

•  Community hospital partnerships for marquis program development and management are growing in strategic importance

•  Outsourcing contracts for highly specialized coverage such as interventional radiology and vascular surgery can be important to building market share – and revenue

•  Strong market data can also support budgeting internal funds flow for faculty and affiliated physicians’ coverage and medical directorships

•  Unique, super star surgeons and other recruits may drive high compensation that requires strong documentation for directorship or leadership positions

8

Critical Access, Small, and Rural Hospitals

•  Providing adequate coverage for key hospital services can be a huge challenge

•  Physician expenditures can be high as a percent of total hospital expenses, despite low ADC and bed capacity

•  Benchmarking against large hospital and trauma centers can drive costs higher than necessary for some services

•  A broader range of payment benchmarks may be helpful to address hourly rates, clinic rates, RVU-based payments, per episode payments and uncompensated care

9

Diverse Health Systems

•  Payment policy should be consistent across the organization which may not translate into homogenous payment rates

•  Different facility characteristics often yield very different payment expectation and payment benchmarks

•  A strong benchmark product with broad scope and rates for differing facility characteristics allows consistent benchmarking

•  Identification of outlier facilities and opportunities for savings support is a plus

•  Multi-facility contracts and appropriate adjustments for rates

10

11

Physician Contracting Compliance for Everyone

All contracting programs should have these elements:

•  Executive oversight •  Strategic and tactical contract management •  Financial management •  Compliance management •  Rigorous FMV determination and documentation

process •  Routine internal audit process

12

Create a standardized process that is simple and effective

•  Designate an executive to oversee the process •  Automate as much as possible •  Ensure that analysis of contract expenditures is done

annually, if not more frequently •  Determine a rigorous and straightforward way to

document FMV consistently •  Define a process to address exceptions to your internal

benchmark standards

13

Determine and document FMV with market data

•  High-quality market data is the fastest, most straightforward way to determine and document physician payments

•  Test for commercial reasonableness •  Determine if there’s a match in scope of services •  Find the appropriate market range and determine

payment •  Document FMV •  Internal review and sign-off

14

Seek outside help when needed

•  If there is no comparable market data or the position demands particular qualifications with exceptional pay, consider getting a valuation.

•  If you must pay above the 75th percentile, make sure documentation is solid.

15

If you need a comprehensive physician contracting program that works for your unique organization… We can help!

MD Ranger, Inc. 650-692-8873 [email protected]

16