Health systems face unique challenges including on the physician contracting front. Learn:
--The benefits of multi-facility contracts from both a financial and an operational standpoint
--How much multi-facility contracts can save over multiple individual contracts
--About documenting FMV for multi-facility arrangements
4. Benefits are many
• Control costs
• Increase operational efficiency
• Centralize physician leadership
• Decrease duplicative coverage payments in some
cases (depending on volumes, demand)
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5. Payments are higher, yet costs may be
lower
• Multi-facility contracts typically cost more than single
facility arrangements
• However, they are less costly than individual facility
payments when considered in aggregate
• Our data demonstrate that though there is decidedly
more work to cover 2+ facilities, the amount of work
(measured in hours and annual payment rates) is not
proportionate to the number of facilities covered
under the agreement
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6. These arrangements are becoming
more common
In 2014:
• 8% of MDR call agreements were multi-facility
arrangements
• 10% of administrative agreements were multi-facility
arrangements
Note: these numbers are increasing year to year
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8. When it’s appropriate
• When two facilities within the same health system are
physically nearby and the emergency department
volume is such that call burden for one physician is
not overwhelming, it may be possible to have one
physician covering both facilities
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9. What’s needed
• Physician(s) on panel must have privileges at both
facilities
• Second call position may be needed to address
infrequent conflicting demands
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10. How much it costs
• Adding a second campus to one coverage position
on average increases the cost of the agreement by
26%
• Example: if two hospitals each pay $100 for coverage
to two physicians, the estimated appropriate rate if
they consolidated contracts to have one physician
provide coverage of both campuses would be $126.
This is 37% savings per campus!
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11. FMV for multi-facility call
arrangements
• Use market data to determine appropriate payment
ranges for a single position
• Use MD Ranger’s formula for multi-campus coverage
service (each campus brings a 26% increase)
• Document market rates and justification for
negotiated payment rate
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13. When it’s appropriate
• When two or more facilities within the same health
system can rely on the same physician to complete
the same duties for both hospitals, a multi-facility
medical directorship or administrative position may
be advantageous
• We seen these for facilities in the same region or
across multiple regions in unique situations such as
training or system-wide implementation programs or
quality initiatives
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14. What’s needed
• Physician must have available hours for the position
• Though there is no significant difference in hourly
rates of pay for physicians with multi-facility
administrative positions, there is a significant
difference in the average number of hours required
• As with all medical direction and administrative
positions, the job description must warrant the
required number of hours, and timesheets are
essential for compliance
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15. How much it costs
• On average, a single physician contract for the same
service across two campuses costs 37% more than a
single campus position, with the difference largely
driven by hours required not hourly rate of pay
• Each additional campus in the contract commands an
average 10.7% increase in the number of hours up to
five or more campuses
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17. FMV for multi-facility
direction/administrative arrangements
• Use market data to determine appropriate payment
ranges for a single position
• Use MD Ranger’s formula for multi-campus
administrative positions. Note that hourly payment
rates typically do not increase, but rather annual
hours and annual payments for the position are
higher
• Document market rates and justification for
negotiated payment rate
• Require and monitor timesheets
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Hi there. Welcome to MD Ranger’s educational video series. Today we’ll cover tips for developing physician call and administrative contracts across multiple facilities in health systems. Feel free to share this on-demand video with other physicians you think it could help.
Here’s are our learning objectives. First we’ll discuss advantages to creating these types of agreements. Then we’ll discuss how you might go about determining appropriate payment rates for both call and administrative agreements.
Okay, so what are the advantages to having multi facility contracts? If you are a health system who hasn’t yet leveraged these types of arrangements, here’s why you should consider exploring it.
With ever-shrinking margins and pressure to decrease costs, many hospitals and health systems seek the clinical and operational advantages that centralization creates. MD Ranger data strongly suggests the benefits of multi-facility physician contracts as an important strategy for controlling costs. Hospitals and health systems with more than one campus or facility can save money and streamline both physician emergency coverage and administrative services through multi-facility agreements, particularly if distances are short and call-in demand is modest or uneven.
Replacing single facility physician contracts with multi-facility arrangements can have positive, measurable impacts. Although payments to physicians whose duties span multiple facilities are higher than single facility contracts, they are less costly than separate, individual facility arrangements when the duties are assigned to a single physician. MD Ranger's subscriber-based comprehensive reporting system provides an unparalleled opportunity to evaluate the frequency and benefit of these types of arrangements, providing insight into the payment rates and time differentials of single versus multi-campus contracts. These data can be helpful in providing guidelines for documenting fair market value and commercial reasonableness for situations that, on the surface, appear to exceed common benchmarks.
So, how do you go about setting proper payment rates for these types of contracts?
When is it a good idea to think about call coverage agreements that span two facilities? You need to make sure the circumstances are right.
Keep in mind that….
Administrators are often curious if these types of arrangements could save them money, and they will.
Here are some general guidelines to think about setting a proper payment rate. You’ll need to make sure you’re adhering to your organization’s guidelines and rules about physician contract compensation, of course.
And lastly, let’s discuss administrative payments in these types of arrangements.
Directorships and leadership positions are more easily leveraged across two or more facilities than coverage agreements. If your health system is currently not thinking about structuring these types of agreements, it should.
It’s important that you find a physician willing to put in the extra hours that an administrative position across campus could demand.
Typically these arrangements do have a higher mark up than coverage agreements; however, it’s possible to have directors that span across more than two or three facilities.
Here’s a graphical representation on how multi campus positions can save money across campuses.
Very much like call coverage, setting payment rates for administrative multi-facility agreements includes using high quality market data and looking closely at the number of hours it will require the physician to complete her duties.
These types of arrangements can be complex. If your organization needs help brainstorming, or you need access to data, call us! We can help.