How does your organization ensure its financial relationships with physicians are compliant with federal regulations? To help determine whether or not they might have a physician contracting compliance risk, we created a checklist.
This webinar will cover all elements of our checklist, and integrate best practices from other healthcare organizations. Key topics discussed will be:
--Current regulations and penalties
--Contract organization, analysis
--FMV documentation processes
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Measuring Financial Health of Physician Contracting Program
1. 1
Measuring the Financial Health of Your
Physician Contracting Program
February 19, 2015
PHYSICIAN CONTRACTING COMPLIANCE
RISK CHECKLIST
ALLISON PULLINS, CMO, MD RANGER
2. Getting value from our discussion
⢠While listening to the webinar, think about how your
organization addresses(or fails to address) each of the
checkbox items
⢠After the webinar:
⢠Determine your top 2-3 areas of risk from our list
⢠Delegate responsibilities to your team
⢠Project plan for addressing areas of risk?
⢠Call MD Ranger!
2
5. 5
MD Ranger includes:
⢠Benchmarks, available as reports and online queries, with market data for
call, medical direction,administrative services,leadershippositions,
hospital-basedservices,uncompensatedcare,clinics and diagnostic testing
services
⢠A secure, web-based contract data tool to collect and organize contract
data (uploads via Excel available)
⢠FMV documentationtools
⢠Analytics to benchmarkinternal contracts and total expenditures,identify
compliance issues,compare facilities andanalyze expenditures
⢠Cost and compliance reports
⢠Resources and researchto support compliance efforts
⢠Customer support by experts in physiciancompensation,FMV
documentation,andcompliance
6. Your host
6
⢠Nine years experience in healthcare
consulting and technology; specializing
in physician marketing, recruitment,
engagement, compensation, negotiations
⢠Helps MD Ranger subscribers leverage
data, analyze internal costs and structure
physician contract compliance programs
9. Executive oversight
⢠An executive should be in charge of both contractualand
strategic decisions
⢠They should report to both the CEO and the Board
⢠Commonly this executive is the Chief Compliance Officer,
the GeneralCounsel, or the CFO
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10. Contract management
⢠Organize your contractsby key elements like
⢠Expiration date
⢠Dollar value
⢠Service
⢠Have an alert system to spark negotiation reviewswell
before the expiration date
⢠Formalize renewalprocesses
⢠Manage contractson two levels: contractby contractAND
high-levelstrategic management
10
11. Financial oversight
⢠Non-employed physician costs average5% of a hospitalâs
total operating budget
⢠Proactive managementof physician contractscan control
costs
⢠Make sure all agreementsare commercially reasonable
⢠Whatâsyour definition of FMV? Is it financially feasible
for your organization?
⢠Benchmark your facility against peers
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12. Compliance management
⢠Education
⢠Because compliance has so many moving parts, it is
important to be deliberate and specific with guidelines,
processes, and training
⢠FMV determination and documentation processes=key!
12
15. Stark Law
⢠Prohibits physician referralsof DHS if a physician or the
physicianâsfamily membershave a financialrelationship
with the entity, unless an exception applies
⢠Limited to Medicare and Medicaid programs
⢠Civil penaltiesup to $15,000 per service; additional
penaltiesup to $100,000 for circumvention. Exclusion
from CMS also possible.
⢠Strict liability statute, so no intent needed to violate the law
⢠Physicians are at risk too; make sure to educate them as
well!
15
16. Anti-Kickback Statute
⢠A criminal statute that forbids the exchangeor offer to
exchange anything of value in an effortto entice or reward
the referralof federalhealth care servicesor business
⢠Penalties of $25,000 plus up to 5 years in prison per
violation
⢠Additional civil penaltiesof up to $50,000 per violation
and up to three times the amount of damagessustained by
the government
16
17. False Claims Act
⢠Imposes liability on people/organizationswho defraud
governmentprograms
⢠Payments to a hospital for servicesthat violate both Stark
and AKS could be subject to penaltiesbecause they
defraud the government
⢠Allows whistle-blowersto bring qui tam lawsuits and sue
on behalf of the federalgovernmentfor both Stark and
AKS violations
17
18. Educate your team
⢠Staff should know about regulationsand penalties
⢠Hold regular trainings and refreshersessions
⢠Make sure new employeesreceiving training during
onboarding
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20. Every paid service must have an agreement
⢠Must have an agreement, but best practice to have a
contract
⢠Consider agreementsfor unpaid services, too
⢠Key elements:
⢠Signatures form both sides
⢠Defined duties
⢠Defined time requirements
⢠Dates of service
20
21. Are agreements being carried out
properly?
⢠Track hours
⢠Track duties
⢠Watch those expiration dates
21
23. Know the scope
⢠Small community hospitals tend to have 50-75 physician
contracts
⢠Large organizationscan have hundreds to thousands
⢠Best practice to conductbudgeting and financialplanning
⢠Knowing your contractswill help you uncover potentially
risky arrangements
23
24. Flag your high-risk agreements
⢠Key service lines
⢠Politically charged situations
⢠Typically large hospital-based agreements
⢠Track coverage arrangements
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26. Hopefully in a centralized location
⢠Are your contractsstored in a centralized location?
⢠Obtain or create a contractmanagementsystem
⢠Garbage in, garbage out
⢠Create an automated processfor renegotiations,starting 3-
6 months before the renewaldate
26
27. Donât know what you donât know? Get on
it.
⢠Itâs more common than youâd think for a hospital to not
manage contractsproperly
⢠Make sure you feel 100% confidentthat all contractsare
kept in one location and monitored by staff
27
29. What counts as exceptional?
⢠Your organization should have a policy defining FMV
standards
⢠Some organizationscompensateat or below median;others
consider anything below the 75th percentile as FMV
⢠Exceptionalagreementsmight be:
⢠Higher hourly rate
⢠More hours per year (e.g. start up costs
⢠Rock star physicians
⢠Undesirable panels
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30. Create a process
⢠When you must pay a physician above FMV, create a
consistent review process
⢠Have a criteria for what counts as an exception
⢠What is the process for reviewing these exceptions?
⢠Who needs to sign off on exceptions?
30
31. May we suggest making it difficult?
⢠The more difficult your exceptionsapprovalprocessis, the
less likely it is that administratorswill pursue higher rates
⢠Donât make it impossible, but make it onerous
⢠Over the course of a few years, you will probably see
lower costs!
31
33. Define FMV
⢠What is the criteria for FMV and commercial
reasonablenessat your organization?
⢠Whatâsyour processto determine commercial
reasonableness?
⢠What tools will you use to establish FMV? Marketdata?
Valuations?
33
34. Document FMV
⢠How will you consistently document rates?
⢠What other documents, besides proof of FMV, should you
require?
⢠How will you track compliance?
⢠Will you performannual audits?
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36. Day to day management
⢠You should designate a point person to handle physician
contracting, even if not full time
⢠Give this person the tools they need
⢠Designate an executive the point person directly reports to
for physician contracting
36
37. Tone comes from the top
⢠Essential to have an executive who is knowledgeable and
responsible for physician contracting
⢠She should contribute to the compliance programcreation
and be familiar with the day-to-day
⢠Responsible in the unfortunate eventof an audit
37
39. Auditing
⢠An annual internalaudit can identify potential patternsof
non-complianceor outliers that have not been properly
documented
⢠Auditing happenson a regular basis and looks
retrospectively acrossthe organization
39
40. Monitoring
⢠Monitoring contractsthroughout the year to ensure they
are being paid and performed according to what was
agreed upon
⢠Monitoring is real-time managementof physician contracts
⢠Elements should include looping in AP, tracking physician
time
40
42. They provide a look inside the OIGâs
process
⢠Learn from organizationswho made mistakes
⢠CIAs can be long, but provide step-by-step requirementsto
be in compliance in their eyes
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43. 43
Ăź KNOW THE REGULATIONS
Ăź HAVE WRITTEN AGREEMENTS
Ăź KNOW YOUR ORGANIZATIONâSCONTRACTS
Ăź KEEP THEM WELL-ORGANIZED
Ăź DETERMINE HOW TO HANDLE EXCEPTIONS
Ăź DEFINE WHAT FMV MEANS
Ăź DETERMINE HOW FMV WILL BE DOCUMENTED
Ăź PICK LEADERS AND STAFF INVOLVED
Ăź AUDIT AND MONITOR YOUR AGREEMENTS
Ăź REVIEW CIAâS FOR BEST PRACTICES
44. Could we help?
44
Could your organization use tools to help manage
financial oversight of physician contracting?
MD Ranger helps hospitals better understand
physician expenditures and become more strategic
with contracting decisions.
Reach out to us: we can help.
apullins@mdranger.com or 650-692-8873