Looking Ahead to Physician Contracting in 2018
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As 2017 comes to a close, we want to take a step back and look at the actions the OIG and DOJ have taken over the year. These actions are usually a good indicator of what's to come in the next year. How will the focus of the OIG and DOJ impact your physician contracts and strategy in 2018?
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Looking Ahead to Physician Contracting in 2018
- 1. 1 LOOKING AHEAD TO PHYSICIAN CONTRACTING IN 2018 DECEMBER 2017
- 2. Today’s topics • Who we are • Guidance from OIG • Trends for physician contracting in 2018 • Best practices to kick off the year 2
- 3. 275+ Physician Benchmarks • Call coverage rates • Medical direction payments • Administrative and leadership services rates • Hospital-based service stipends • Diagnostic testing, etc. • Clinic & hourly rates 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. 4 Our 275+ Benchmarks include: • Call Coverage (50+) • Medical direction (90+) • Hospital-based services (20+) • Administrative and Medical Staff Leadership (20+) • 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 • Pediatric-specific services (13) • Total hospital spending • Percent paying • Number of administrative positions Hospital-characteristics drill down for ADC, bed size, trauma status, urban/rural, stroke centers, and more
- 5. MD Ranger: 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 5
- 6. 6 LESSONS FROM THE OIG and DOJ
- 7. Yates Memo • Published September 2015 • Discusses the personal accountability of physicians and healthcare executives in fraud • Example: Freedom Health settled False Claims Act allegations and the former COO must pay $750,000 7
- 8. Settlements abound • OIG continues to improve analysis processes in order to find more violations • DOJ continues to funnel more resources into investigating fraud 8
- 9. Pacific Alliance Medical Center: $42 million • Whistleblower brought allegations of improper payments to referring physicians, violating Stark and AKS 9 Mercy Hospital – Springfield: $34 million Quest Diagnostics: $6 million • Violated Stark by paying physicians to “make them whole” after acquiring a clinic • Allegedly paid physicians to send patients to Quest (formerly Berkeley HeartLab)
- 11. Medical directorships are both risky and expensive • Many organizations auditing medical directorship payments and looking for ways to streamline spending • These administrative payments attract scrutiny 11
- 12. Call coverage demands from physicians could increase • Some organizations don’t pay for call; others spend millions annually • With incomes uncertain, physicians may ask for additional payments for financial security • If coverage becomes an issue, providing ED coverage services could become even less appealing to doctors 12
- 13. Healthcare organizations face larger fines • The Bipartisan Budget Act of 2015 mandated that federal agencies make inflation adjustments to the amounts of civil monetary penalties. • Penalties jumped last year, edged up this year. • The fines for False Claims Act violations are now $10,957 at the minimum and $21,916 at the maximum. • Stark Law fines increased from $15,000 to $23,863 per violation • Anti-Kickback Statute fines increased from $50,000 to $73,588. • Penalties are expected to continue to increase based on inflation each year. 13
- 14. False Claims Act in the spotlight • Since the passing of ACA, the False Claims Act has become more prominent in healthcare • The FCA could apply to any fraudulent government payment (like Stark and Anti-Kickback violations) • Experts seem to think that the False Claims Act will continue to be a liability for organizations. Remember: FCA penalties substantially increase the potential repayment amount. 14
- 15. 15 BEST PRACTICES FOR KICKING OFF 2018
- 16. Outline your organization’s process • Give your process the organization it needs with a foundational document: • Include the purpose of your physician contracting process and the intended outcomes. • Outline step by step how contracts will be processed as well as team roles and responsibilities. • In 2017, the OIG published a new resource: Measuring Compliance Program Effectiveness: A Resource Guide 16
- 17. Get buy-in and consensus • Get buy-in from key executives, committees, and board members • Ensure that leadership understands importance of physician contracting compliance process and agrees upon processes and guidelines • Communicate compliance measures and safeguards to hospital employees and medical staff 17
- 18. Store all your contracts in a centralized location • Contract management systems are key to all physician contracting programs • Find the right vendor to meet your needs • Demand utilization 18
- 19. Develop a process to determine FMV consistently • Certifying that physician agreements are FMV should be the cornerstone of effective physician contracting programs • Discuss what is best for your organization with your team • Once determined, codify your process in a foundational document 19
- 20. Create (or update) guidelines for handling exceptional agreements • Not every agreement should be negotiated above the 75th or 90th percentile; however, organizations always have one or a few exceptions • Be prepared and create an exceptions process in advance to process these requests • If you are smart about it, you can structure guidelines in a way that discourage exceptions—always a good thing 20
- 21. Educate your staff on regulations and enforcement actions • Join associations or attend conferences • Keep up with the OIG online • Consider yearly trainings 21
- 22. Make a plan to review all physician contracts • Annual audits are always a good idea • Consider smaller audits each quarter • Whatever your schedule, use technology to make your job easier 22
- 23. Thank you! MD Ranger, Inc. | 1601 Old Bayshore Hwy, Ste. 107 | Burlingame, CA 94010 www.mdranger.com info@mdranger.com 23
Editor's Notes
- Hi everyone thanks for joining us today for our on-demand video. Today we want to talk about how to set your contracting program up for success in 2018. We want to give you a quick get started guide for doing just that in today’s brief video.
- Before we dive into the heart of our program today, we’ll talk about who we are as well as discuss the hottest topics in physician contracting, straight from OIG trends. We’ll then predict what we think will be the biggest areas of concern for those involved in physician contracting in 2019 Then we’ll wrap up with a few best practices to get you started on the right foot.
- MD Ranger is an online platform that integrates over 275 physician compensation benchmarks with a suite of compliance and financial tools. We offer: 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
- Let’s get into detail about the benchmarks we produce. We easily outpace competitors when it comes to the scope of our call coverage and medical direction benchmarks, with over 50 and over 90 services, respectively. We have a solid set of hospital-based services, benchmarking stipend level payment as well as other service-specific metrics. Our administrative services and medical staff leadership category has several difficult to find positions for services like Chief of Staff, Quality Initiatives, and Committee Chair among others. We also have a number of diagnostic tests, clinical professional services, and 13 pediatric-specific services. Our Total Hospital Spending data allow you to benchmark spending at the facility-level compared to peer organizations. Percent paying metrics and number of administrative positions helps to asses commercial reasonableness.
- MD Ranger is designed to be a foundational resource of your compliance program. We help subscribers standardize their physician contracting process in the way that is best for their organization and we recognize that this will be different for every 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 heightened scrutiny by the government. Our subscribers use the MD Ranger platform to mitigate that risk and monitor risky arrangements.
- Over the past 3-4 years, physician contracting has moved into the regulatory spotlight. Let’s look at what the OIG and DOJ have been up to over the past year and what is important to them within this area of compliance.
- In September 2015, Sally Yates wrote a memo stating that the DOJ was going to hold individuals accountable in corporate wrongdoing cases. Since its release, the Yates memo has been one of the hottest topics in healthcare compliance. We have seen doctors as well as hospital executives face fines for improper physician payments. This year, the former COO of Freedom Health, Inc was fined $750,000 after the corporation was accused of inflating Medicare reimbursements using unsupported diagnosis codes. It seems reasonable that the number of personal liability fines will increase in 2018. Thus, it is imperative that individuals including physicians, hospital executives, and those involved with physician contracting pay attention to how their actions could be perceived in any government investigation. Individuals can no longer assume the organization alone will take the blame. Example: http://www.jonesday.com/files/Publication/d52a211f-fa72-4620-a611-3820780b2658/Presentation/PublicationAttachment/b4be46e7-30c3-4e93-9182-42f8daecb8e9/Yates%20Memo.pdf
- We’ve seen settlements continue to appear in the news in 2017 and we feel it is likely to continue in 2018. The OIG has invested resources into creating digital analytic tools to find more inconsistencies in hospital and physician reporting and then investigating those potential violations. Thus, the DOJ has more focused resources, in particular for US cities were fraud is rampant.
- Here are just three examples of settlements in 2017. Pacific Alliance Medical Center was fined $42M after a whistleblower brought allegations of improper payments to referring physicians. Mercy Hospital – Springfield was hit with a $34M fine after their payments in the purchase of a clinic were scrutinized. And Quest Diagnostics was fined $6M to settle allegations of kickbacks and unnecessary testing. ---- Pacific: https://www.justice.gov/opa/pr/los-angeles-hospital-agrees-pay-42-million-settle-alleged-false-claims-act-violations-arising Mercy: https://www.fcaupdate.com/2017/06/physician-compensation-scrutiny-continues-in-recent-fca-settlement/ Quest: https://www.justice.gov/opa/pr/blood-testing-laboratory-pay-6-million-settle-allegations-kickbacks-and-unnecessary-testing
- Let’s look forward to 2018 and talk about what MD Ranger sees as emerging trends.
- We have noticed more and more organizations concerned about medical directorship spending, and for good reason. There can be a lot of money at stake in these arrangements making it a significant area of compliance risk. We recommend that all healthcare organizations who pay medical directors perform audits and assess the following: -are rates on a contract by contract basis within FMV? Is there documentation? -do we have too many medical directors across the board? -does the amount we are spending on medical directors make sense for an organization of our type and size? MD Ranger Total Facility Benchmarks can help with this type of analysis if you’re not sure where to start.
- It is impossible to predict certain compensation trends, but given the flux of physician incomes and the uncertainty that comes with that, payments for services like call coverage could potentially increase. This is more likely if insurance coverage became more of an issue over the next few years should ACA become eroded.
- The Bipartisan Budget Act of 2015 mandated that federal agencies make inflation adjustments to the amounts of civil monetary penalties. The Budget Act allowed agencies to make “catch-up” adjustments. This means that this year’s increases are substantial: False Claims Act penalties have not been adjusted in 20 years. The fines for False Claims Act violations are now $10,781 at the minimum and $21,563 at the maximum. Stark Law fines increased from $15,000 to $23,863 per violation and Anti-Kickback Statute fines increased from $50,000 to $73,588. The penalties are expected to increase based on inflation each year. Healthcare organizations with violations will face much bigger fines. The potential impact of these higher fines could be crippling for organizations, and doing everything to prevent violations is even more important now. We expect to see record-setting fines and settlements with healthcare entities in 2017.
- Stark and the Anti-Kickback Statute have always been driving factors in physician contract regulation, however, over the past few years, we have seen the False Claims become more and more prominent in improper physician payments cases. The False Claims Act applies to any fraudulent payment collected from the government (like Stark and Anti-Kickback violations) when the government programs are in place at a healthcare organization. Experts seem to think that the False Claims Act will continue to be a liability for organizations. This is especially worrisome for hospitals, since False Claims Act penalties substantially increase the potential repayment amount.
- To wrap things up, lets talk about some key best practices to implement now for a successful 2018.
- Every organization needs a physician contracting process. Most organizations have one—but it might not be codified in a document. To prepare yourself for the new year, create a document that outlines your entire process and the key players. This is not only compliance best practice but it will also keep everyone on track.
- You also need buy in from the key executives at your organization. Not only should they understand the process and agree with the decisions your team has made around your own process, they also need to enforce the rules and be examples of positive compliance practices.
- This best practice may seem like a no brainer but it’s easier said than done! If you aren’t keeping all your contracts in one easy to access location, then make it a priority in the new year. Not only should you strive to keep your contracts all in one location and up to date– you should demand that your team use the system.
- Making sure your FMV process and requirements are consistent is another best practice to employ in the new year. Your org should decide what is best and what resources you need. We also have plenty of guides and whitepapers on our website to help you get started, or feel free to email us for more personalized help.
- No organization should consistently negotiate agreements above the 75th percentile; however, it’s to be expected that every hospital have one or two agreements on the high end. We suggest creating a process well in advance of encountering exceptional agreements so that things don’t get out of hand. You will have a fair process to evaluate whether or not the agreement truly is exceptional and depending on how you structure your process, may even reduce requests to pay high rates!
- Make it a resolution to keep your staff up to date on regulations and laws—education is important in the compliance world. The Health Care Compliance Association is a fantastic organization to keep up with physician contracting compliance related issues.
- Make sure that you plan your yearly audit in 2018. Feel like you don’t have the resources to devote to such a big project? How about dividing it up into manageable chunks? When you audit, focus on the riskiest agreements. We recommend using tools to help you do this. MD Ranger has auditing tools that help you sort to find the agreements that deserve your attention.
- Thanks for joining us! Don’t hesitate to reach out if we can be of help as you tackle compliance challenges year round. We wish you all the best in the new year.