9 KEY PHYSICIAN CONTRACT NEGOTIATION STRATEGIES
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9 KEY PHYSICIAN CONTRACT NEGOTIATION STRATEGIES
- 1. 1 9 KEY STRATEGIES FOR SUCCESSFUL PHYSICIAN CONTRACT NEGOTIATIONS ON DEMAND VIDEO, OCTOBER 2017
- 2. Our agenda • Who we are • Physician negotiation best practices • Nine key strategies 2
- 3. 275+ Physician Benchmarks • Call coverage rates • Medical direction payments • Administrative and leadership services rates • Hospital-based service stipends, clinic rates • Diagnostic testing Online Platform • Benchmark lookups • Contract proposal tools • Contract reports by facility and service • Total facility costs + benchmarks Compliance Documentation • Contract-specific FMV documentation reports • Reports to assist with real-time monitoring and annual reviews Research and Support • Resources for education and training • On-call experts to help subscribers use benchmarks and tools 3
- 4. The foundation of your compliance process Standardize processes and rates Document FMV Access 275+ payment benchmarks Review contracts and monitor with ease Have smarter, data-driven physician negotiations Mitigate compliance risks 4
- 5. 5 Our data
- 6. 6 Our benchmarks • Call Coverage (55+) • Medical direction (85+) • Hospital-based services (15+) • Administrative • Medical Staff Leadership • Diagnostic/other services e.g. ROP, autopsy, dialysis • Hospital-based stipends • Clinics, professional services • Telemedicine • Residency/teaching/GME • Uncompensated care • Meeting attendance, peer review, IT/EHR and quality initiatives • 13 Pediatric services, with more emerging each year Hospital-characteristics drill down for ADC, bed size, trauma status, urban/rural, stroke centers, and more. Used in academic medical centers, integrated delivery systems, and hospital organizations.
- 8. People vs. the problem • All parties in a negotiation are human • Separate the people in the situation from the problem or challenge • Empathize 8
- 9. Perspective and mutual gain • Focus on and understand the parties interests, not their ”positions” • Look for win wins • Only two options? You’re missing something. 9
- 10. Always know your best alternative • If your party or organization can’t get exactly what it wants, what is the next best alternative and why? 10
- 12. Review all prior and existing agreements • Review the contract in question, as well as all prior contracts with physician and/or group • Review key terms and scope of services • New arrangements: familiarize with what has already been offered to the provider and the proposed scope of services 12
- 13. Check if additional contracts exist • Multiple contracts with the same physician or group could result in overpayment that is sometimes referred to as “stacking” • Keep careful documentation of total payments to a single physician or group 13
- 14. Establish goals and objectives • Determine the ideal outcome for the organization • Know where you can and can’t compromise • Strategize to anticipate or better yet, understand, the physician or the group’s goals for the negotiation 14
- 15. Have a draft job description prepared • Review internally • Define expectations • Anticipate pushback, questions 15
- 16. Research the market • Due diligence! • Commercial reasonableness • Know FMV ranges, reasonable payments • Understand factors that could affect payments like trauma status, heavier call burden, etc. 16
- 17. Consider alternatives • Anticipate and plan for pushback • Alternatives, compromises 17
- 18. Review your organization’s contracting and compliance guidelines • Consider reviewing your organization’s guidelines with physicians • If your organization doesn’t have written guidelines, put it on your compliance “to do” list • Guidelines create objective standards and can limit feelings of favoritism 18
- 19. Document compliance • Certifying that physician agreements are FMV is the cornerstone of effective physician contracting programs; it is likewise important in negotiations • Demonstrate your organization takes compliance seriously 19
- 20. Gather all documentation together • Reduce confusion and mistakes • Keep all negotiation documentation in one place 20
- 21. Thank you! MD Ranger, Inc. | 1601 Old Bayshore Hwy, Ste. 107 | Burlingame, CA 94010 www.mdranger.com 21
Editor's Notes
- Hi everyone thanks for joining us today for our on-demand video. Today we want to talk about how
- Before we dive into the heart of our program today, we’ll talk about who we are
- MD Ranger is an online platform that integrates over 250 physician compensation benchmarks with a suite of compliance and financial tools. A secure, web-based Contract Data Tool to collect and organize contracts Analytics to benchmark contracts, review expenditures, identify compliance issues, and compare facilities Cost and compliance reports to compare your contracts to MD Ranger benchmarks Resources and research to support compliance efforts And Support from experts in physician compensation, FMV documentation, and compliance
- IN fact, we aim to be the foundation of their physician contract compliance programs, all in an integrated, easy to use platform. MD Ranger helps subscribers standardize their physician contracting process in the way that is best for their organization. Because our benchmarks and online platforms can be integrated into all types of compliance and legal processes, we can be a resource to all types of organizations. . These types of financial arrangements can be very risky to organizations and to physicians—given federal regulations and hightened scrunity by the government. Our subscribers use the MD Ranger platform to mitigate that risk and monitor risky arrangements.
- We began producing benchmarks in 2009 have have grown from a database of 4,000 to 28,000 contracts since. This is a map of our subscribers and contract database MD Ranger has more than 225 participating healthcare organizations. We work with all types of facilities from large urban trauma centers to small, rural critical access facilities, surgery centers, dialysis centers and everything in between.
- Here is a comprehensive list of the types of different physician agreements we benchmark. We drill down all our benchmarks by meaningful hospital demographics, like hospital size, trauma status, and more.
- Let’s start off by reviewing some high level best practices for discussions around physician contracts and negotiations themselves.
- It’s key to acknowledge that everyone involved in the negotiation, on either “side of the table” so to speak, are people. While they may represent problems to your organization, or present difficult situations, the people are not the problem or the challenge. After you’ve reminded yourself of everyone’s humanity—keep in mind that you need to put yourself into the other party’s shoes. The more you understand their position, the better you can see mutually beneficial outcomes for all parties involved.
- Similarly to separating people from the problem, focus on ”interests” of the parties and not their postiions. This will help you see alternatives more clearly. Always look for ways that both parties can secure wins from their perspective. There are rarely only two solutions to a problem. If you are grappling with only two options—you are likely missing something.
- Let’s look forward to 2017 and talk about what MD Ranger sees as emerging trends.
- Start by reviewing the contract that is up for negotiation as well as prior contracts with the group or individual. If it is a current agreement that is expiring, review the key terms and scope of services. If it is a new arrangement, familiarize yourself with what has already been offered to the provider and the proposed scope of services.
- Check and see if additional contracts exist for the physician or group in question. Multiple contracts with the same physician or group could result in overpayment that is sometimes referred to as “stacking”. It may be reasonable to have multiple agreements with the same physician for different services, but you should keep careful documentation of total payments to ensure that the aggregate amount does not exceed market rate compensation for an individual. For example, if an oncologist with a clinical practice is paid to be the medical director of an infusion service as well as the chief of staff and the director of the cancer center and the aggregate hospital payments exceeds the compensation for a full time oncologist, there could be an issue if her clinical revenues reflect a full time practice as well.
- Before beginning a contract negotiation, determine the ideal outcome of the contract in terms of payment and work expectations. Know when you can compromise and when you can’t before any talks with the other party begin. Strategize with others to determine what the physician or group’s goals are; set realistic expectations for the arrangement. Are the expected number of hours realistic? Does the physician have the leadership skills needed to be effective?
- Creating or reviewing the job expectations internally with staff who will be involved in the program helps to define expectations and parameters for effective leadership. It helps the physician to understand what the position entails and can preclude conflicts during negotiations or later when time records are reviewed.
- Always perform due diligence before starting negotiations. Commercial reasonableness is an important aspect of physician contracting, especially for a new position. Consider if the position is truly necessary for your organization or results in measurable quality improvement, and that it makes good business sense independent of any referrals by the physician or group. Know reasonable payment rates for the specialty and the service in question. High quality market data is a great resource. While you should be familiar with the entire range, we recommend targeting rates between the 25th and 75th percentiles of market data. It is important to remember that statistically someone must be paid above the 90th percentile and someone must be below the 25th – and there should be reasons and documentation for those payment levels. You should enter the negotiation with quantitative evidence of the range you can support, as well as how your institution and the particular physician(s) compare to the ‘typical’ provider. Factors such as hospital size and trauma status can make a difference in the appropriate payment rate, as can national reputation and the credentials of a particular physician.
- In many negotiations, you will encounter pushback. Think about alternative payment options and how you can compromise. Prepare several alternatives for obtaining and paying for the service that satisfy your goals and objectives. Discussing alternative approaches can often yield savings or more efficient ways of achieving the same objectives, and provides an opportunity to discuss each party’s objectives and challenges.
- If your organization has written compliance guidelines for payment rates, review them so that both you and the physicians with whom you negotiate know the ground rules. If your organization doesn’t have written guidelines, consider creating them. Many organizations don’t pay above the 50th or 75th percentile without a rigorous approval process. Having guidelines creates an objective standard of payment and limits feelings of favoritism among physicians.
- Documenting compliance is essential for your compliance program; however, fair market value rate documentation can also facilitate negotiations. Demonstrating that you take compliance seriously and reminding physicians that they too can be investigated and fined for Stark and Anti-Kickback violations, can earn the respect of your physicians, administration, and board.
- Depending on the size of your organization or the time of year, you may be preparing for many contract negotiations. By keeping all the documentation and notes for each contract together, you can stay organized and reduce confusion and unnecessary missteps. Since many of these documents also support compliance, keeping them centralized can streamline the compliance process after the contract is signed.
- Thanks for joining us, good luck in the new year.