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Physician Contract Compliance Risks


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Organizations are often not aware of pitfalls in both the creation and the execution of physician agreements. By knowing the risks, you can avoid or correct issues before they become potential violations with serious consequences.

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Physician Contract Compliance Risks

  1. 1. Physician Contract Compliance Risks Commercially Reasonable Time Tracking Fair Market Value Streamline & Standardize Templates
  2. 2. Agenda § Complimentary organizations § Introductions § Physician contract process § Contract compliance risks § Best practices for ensuring integrity of physician arrangements February23,2016 2
  3. 3. Introducing MD Ranger § Access 250+ benchmarks § Call coverage § Medical Direction § Hospital-based services § Diagnostics § Clinical professional services § Standardize FMV documentation across the organization § Audit service line spending § Monitor contracts with risky rates 3 February23,2016
  4. 4. Introducing Ludi 4 § Active financial management of physician agreements § DocTime Log® suite: a mobile application for physician time logging and web-based SaaS that automates physician approval and payment workflows § Documentation for compliance audits and reporting to CMS § Consulting services for assessing structures and processes for administering complex physician agreements and ensuring compliant physician payments February23,2016
  6. 6. Process for creating arrangements 6 Determine Commercial Reasonableness Both parties sign the agreement Determine FMV February23,2016
  7. 7. Results of manual processes: 7 Expensive errors Wasted time and resources Compliance risks Spending too much money Many organizations apply different processes to different contracts, making more room for error and risk February23,2016
  8. 8. CONTRACT SETUP: COMPLIANCE RISKS 8 February23,2016
  9. 9. 1. Paying when it’s commercially unreasonable § When payment is requested, never grant without thorough analysis § If it is commercially unreasonable to pay a physician for a service in the first place, you have bigger problems than a payment that is too high § Benchmarks can help you establish commercial reasonableness 9 February23,2016
  10. 10. 2. Using the wrong information Market data can be a powerful way to determine physician payment rates, but there are pitfalls you must avoid. Questions to ask before using market data: § Consider sample size and participant characteristics of the survey § Who reports the data? § Where are the providers? § How are Antitrust Safety Zone Guidelines interpreted? § Is the data collected consistently and comprehensively, and is it routinely audited by experts? § Are the most helpful, relevant statistics reported? § What is the distribution of rates within the data? § Am I comparing ”apples to apples”? 10 February23,2016
  11. 11. 3. Cherry-picking rates § Physician: I’ve called my peers around town and I have data from five local hospitals: § Dr. Apple gets $1,000 per diem § Dr. Pear gets $1,200 per diem § Dr. Grape gets $1,500 per diem § Dr. Apricot gets $950 per diem § Dr. Berry gets $1,000 per diem § Physician: Considering this, I should be paid at least $1,000 per diem for this service. Problems: § Incomplete picture § Can “confirm” the position of party arguing for a particular rate while ignoring data to the contrary 11 February23,2016
  12. 12. 4. Paying above FMV 12 • 75th percentile and under generally considered within “fair market value range” • It’s normal for an organization to have a small handful of agreements that exceed the 75th percentile, or even a few above the 90th percentiles • These contracts must be carefully vetted and reasons for higher payments should be justified • Paying above fair market value thresholds should be a rare occurrence, not standard! February23,2016
  13. 13. CONTRACT SETUP: BEST PRACTICES 13 February23,2016
  14. 14. Standardize FMV process with market data 1. Test for commercial reasonableness 2. Find benchmarks with appropriate sample sizes 3. Determine if scope of services is a good match 4. Find best payments within the market ranges (your organization should have a policy about this; if not, create one) 5. Negotiate payment with the physician or group 6. Document FMV! 14 February23,2016
  16. 16. 16 Paper-based documentation is often lacking necessary details to be compliant LEGAL CONTRACT MGMT DUTIES FAIR MARKET VALUE TERMS Physician turns in a time log the first month that puts the organization at risk February23,2016
  17. 17. Manual errors are more likely Physicians are dissatisfied Compliance risks are heightened Staff time spent on rework is time consuming and costly 17 The costs to your organization aren’t just in dollars Your organization is at risk with outdated manual processes February23,2016
  18. 18. Physician Logs Time Physician Receives Payment 18 Manual processes involving multiple handoffs are error-prone February23,2016
  19. 19. Pitfalls of current processes 19 Process Related Agreement Parameters Fair Market Value (FMV) § Contract ends § Duties unclear § Operationally not maintained § Late logs submitted § Multiple submitted logs § Duties not checked § Illegible time logs § No routine time logs submitted § Paper is lost § Time to submit isn’t outlined § Format leads to incorrect information submitted § Duplication of duties across agreements § Joinders missing § Contract not adjudicated § Layer of agreements § Calculations incorrect § Math incorrect due to complex structure February23,2016
  20. 20. 5 BEST PRACTICES FOR ACTIVE MANAGEMENT 20 February23,2016
  21. 21. 1. Remove Steps That Don’t Add Value 21 February23,2016
  22. 22. 2. Collect Time Logs for All Compensable Duties
  23. 23. 3. Standardize and Streamline Duties 23 § Ensure that the service line adheres to each hospital’s policies and procedures, applicable laws and regulations, accrediting body requirement and other regulatory compliance, and make recommendations to hospital personnel. § The Director shall ensure compliance with regulatory agencies governing the medical staff, including the Joint Commission and state and federal agencies with the assistance of hospital personnel in the service. § The Medical Director, in collaboration with the unit leadership, nursing director and hospital leadership, facilitates compliance with: department policies; TJC standards; federal rules and regulations; corporate integrity agreements 10 Unique Duties Per Facility (10 x 60 = 600) § Time consuming to check time log against specific duties each month – operational challenge Reduce Variation February23,2016
  24. 24. 4. Approver Training and Accountability Access to physician’s historical and current logs Access to actual contract
  25. 25. 5. Mind the Math with Automation Current time log details Year-to-date view
  26. 26. Infrastructure Needs to Support Compliant Tracking and Analysis Physicians are accountable Clear expectations Manage what you measure Dashboards and data Payments are within scope 26 February23,2016
  27. 27. Thank you Gail Peace Ludi 615.432.2910 Allison Pullins MD Ranger 650.692.8873 27 February23,2016