How does your organization ensure that its financial relationships with physicians are compliant with federal regulations like Stark? To help our subscribers leverage the power of MD Ranger data for documentation and FMV purposes, we have assembled a list of key pointers to help you streamline and improve your physician contracting compliance program.

1. 1
Essential Elements of
Physician Contracting
Compliance Programs
March 20, 2014
Allison Pullins
Director

2. 2
Outline:
• Key elements of physician contracting programs
• Ideas for structuring and implementing your contracting program
• Strategies for determining and documenting FMV
• Market data and compliance
• Uncovering whether or not your organization could be “high risk”
for compliance issues

3. 3
A Breakthrough in Physician Contracting
and Fair Market Value Analysis
MD Ranger is a leading provider of data-driven physician contract and
compensation solutions that help hospitals and health systems analyze market and
internal data, negotiate competitive contracts, and document compliance.
MD Ranger provides:
• A secure, web-based Data Tool to collect and organize
contract data (uploads via Excel available, too)
• Benchmarks, available as reports and online queries, with
market data for call, medical direction, administrative services,
hospital-based services, uncompensated care programs, and
diagnostic testing services
• Web-based Analytic Tools to benchmark internal data,
identify compliance issues, and analyze where dollars are
spent

4. 4
MD Ranger Subscribers

5. Our benchmarks:
• 42 call coverage positions
• 65 medical directorships: hours,
hourly, and annual rates
• Hard to find leadership rates (Chief
of Staff, meeting attendance, EHR,
Quality Initiatives, Peer Review)
• Hospital-based stipends and
incentive payments
• Diagnostic and testing services
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6. Introducing Allison
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• Director at MD Ranger, Inc
• Background in physician marketing,
recruitment, engagement, compensation,
negotiations
• Helps MD Ranger subscribers leverage
the data, analyze internal costs
• Follow us on Twitter! @MDRanger
• Blog much? Visit us: blog.mdranger.com

7. Key Elements of Physician
Contracting Programs
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8. The Essentials:
• Executive oversight
• Contract management
• Financial oversight
• Compliance management
• Rigorous, consistent process for determining FMV
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9. Executive Oversight
• Designate an executive to take responsibility for
physician contracting at your organization
• The buck stops with her
• All exceptions for contracts go through her
• Rates are set with her guidance
• The daily physician contracting director/manager reports directly to
this person (ideally)
• Involve your compliance committee on a quarterly or
half-yearly basis
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10. Contract Management
• Having a contract for all financial arrangements (even
non-monetary ones)
• Organizing your contracts
• Alerting your team to expiring contracts
• Renewal process
• Updated or new contract
• Checking the rate
• Negotiation
• Sign-off
• Strategic contract management
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11. Financial Oversight
• Are all your contracts commercially reasonable?
• What benchmark do you aim for in individual (or
group) arrangements?
• How much are you spending, in aggregate, on
physician administrative services, call arrangements,
and hospital-based service contracts? Is this
comparable to your peers?
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12. Compliance Management
• Mandatory Stark training for all staff involved in the
process
• Understanding “fair market value”
• Creating a consistent, rigorous system for
determining FMV
• Deciding how you are documenting the compliance of
every arrangement
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13. Process to Determine FMV
• Discuss what’s best for your organization
• Research various approaches (pros and cons)
• Document your organization’s philosophy and
approach to FMV
• Record step by step the process you’ll use to
document FMV
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14. 10 Ideas for Structuring and
Implementing your Program
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15. Contracting
15

16. 1) Have a contract for every service
• Many hospitals have a service or two that is not
outlined contractually
• Determine if your organization has any such services,
and create a contract immediately
• Don’t forget payments for services like:
• Chief of Staff
• Medical staff positions
• Meeting attendance
• Other non-monetary compensation
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17. 2) Get all your contracts in ONE place
• Use your contract management system and organize
all physician contracts in a unified fashion
• Don’t have a contract management system, or too
small to have one?
• Create one in Excel
• MD Ranger has a contract management tool included in each
subscription
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18. 3) Truly know your contracts
• How many do you have?
• How much are you spending, in aggregate?
• When are your “tricky” contracts expiring?
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19. 4) Have a system for handling contract
renewals
• Automate the process as much as possible
• Designate roles within your organization for contract
renewal. You’ll need:
• A new contract (or update current agreement with new dates)
• Checking the rate and potentially designating a new rate
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20. 5) Create a process to handle
“exceptions”
• Define what makes an exception
• Determine the specifics of how to handle the
exception. Consider:
• The upper limits for setting an exception rate
• Who approves the exception
• How to document the exception
• BONUS: how to prevent exceptions from happening in the first
place
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21. Compliance
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22. 6) Create a foundational document
• Describe, in detail, your physician contracting
program—most importantly the steps you will take to
ensure compliance for all physician financial
arrangements
• Within the document, outline:
• Accountable executive
• Day to day staff and their responsibilities
• Strategic goals
• FMV process
• Handling exceptions
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23. 7) Communicate your compliance plan
• Accountable executive should receive blessing from
her peer colleagues
• Communicate your compliance plan throughout the
organization
• Ensure access to foundational document
• Emphasize transparency, consistency
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24. 8) Determine how you’ll set rates
• Consider cost, efficiency, and the realities of your
organization
• How many contracts will you set rates for, and how
complex are they?
• What is most realistic for your organization?
Consider scale.
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25. 9) Determine your rate benchmark
• Though you’ll have contracts over the 75th percentile
and above, generally this is not a good mark to aim at
consistently (should be an exception rather than the
rule)
• What’s your market like? Where are your current
rates? What’s your organization’s needs? What is
realistic AND compliant?
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26. 10) Flag high-risk contracts in advance
• Don’t get caught just weeks before a complex
contract expires
• Determine which contracts are the most risky from
both a negotiation and compliance standpoint in
advance so that you have time to set your strategy
and your ideal rate
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27. Strategies for Determining and
Documenting FMV
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28. Three approaches to determine rates
• Market Data
• Internal or external proprietary formulas
• Internal or external Ad hoc FMV Opinions
(valuations)
Most hospitals use a combination of two or all three
methods above.
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29. All approaches have advantages and
disadvantages
• Market data:
• Pros: Cost effective, flexibility, easy to scale
• Cons: Doesn’t work if you don’t have apples to apples comparisons
• Proprietary formulas:
• Pros: Hands-off, easy to scale
• Cons: Proprietary formulas aren’t transparent to the user
• FMV opinions:
• Pros: Most detailed and specific
• Cons: Can be hard to scale given the cost
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30. Most MD Ranger subscribers:
• Use market data from our reports for a vast majority
of their contracts
• Pull in valuation firms or internal experts for the
remaining complex agreements
• Always document their rates with proof of fair
market value, whichever method they choose
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31. Documenting compliant rates
• Ad hoc FMV opinions can be filed away to
demonstrate compliance
• Outline other processes in your compliance
document. Some ideas are:
• MD Ranger individual contract reports (shown with market range
and specific contract’s rate)
• Internal certification document with market data
• Combination of the above
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32. Market Data and Compliance
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33. Can market data be used for
compliance purposes?
• Most of the time, yes
• High quality data is efficient and cost effective for
any organization
• OIG Advisory Opinion 07-10 (9/20/07)
• Phase II Stark safe harbor
• Sometimes you’ll need more than just data,
particularly for complicated agreements or situations
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34. High Risk? Potential Red Flags
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35. Make sure you need to pay
• Always ensure the
request to compensate a
physician is commercially
reasonable (and back it
up with data or other
evidence)
• Explore alternative ways
to compensate beyond a
“per diem” payment
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36. Are you the snowflake?
• Yes, all hospitals are different
• However, not very different
• Benchmarks aren’t the end-all, be-all—though they
are the only way we can truly compare ourselves to
peers
• Beware the defensive reaction
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37. Are your rates consistently high?
• There might be good reasons to have rates on the
higher side, though never always
• If you are in the beginning stages of a compliance
program, review all your physician contract rates and
determine where in the market data each one falls.
Consistently high rates might need revision or a plan
to lower rates
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38. Are you spending more in aggregate?
• Use benchmarks to compare yourselves in overall
spending to peers
• There might be a good reason for over-spending;
there might not
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39. We want to hear from you!
www.mdranger.com
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Allison Pullins
Director
apullins@mdranger.com
650-692-8873