5. Payments are higher
• Hospitals with under 100 beds pay 28% more for call
coverage than hospitals with 100-199 beds.
• Hospitals with under 100 beds pay 64% of what
hospitals with 100-199 beds pay for medical direction
and administration but amount more to percentage of
overall budget.
5
7. Economies of scale unavailable for
small hospitals
$0#
$100#
$200#
$300#
$400#
$500#
$600#
25th#percen1le# 50th#percen1le# 75th#percen1le# 90th#percen1le#
Payment(per(Surgical(Procedure(
Anesthesia(Payments(per(Surgical(Procedure(
Hospital7Based(Total(Annual(Payments(
Under#150#General#Acute#
Care#Beds#
150#General#Acute#Care#
Beds#and#Over##
Source:#MD#Ranger,#Inc.#
7
8. What’s at stake
• In addition to clinical, operational, and financial
challenges, physician relationships are integral to
running a small hospital smoothly.
• Attracting and retaining physicians, guaranteeing
physician coverage, and leadership can be
particularly difficult.
• Federal and state laws demand certain levels of
coverage
8
9. Justifying payments isn’t always
straightforward
• Documenting the fair market value of payment rates
for coverage, leadership, clinics, and other services
can be difficult and expensive.
• Physicians can have more leverage with small
hospitals, particularly those in rural areas or
competitive markets.
9
10. Making strategic decisions is more
difficult
• Smaller hospitals have fewer resources, so you do
more with less.
• Sometimes sacrifices are made just to get the
coverage you need.
• Yet, even small hospitals must document FMV for
each contract.
• Don’t make the process overwhelming and
expensive; it doesn’t have to be.
10
12. Create a standardized process that is
simple and effective
• Designate an executive to oversee the process. At
small hospitals, this typically falls on the CEO or CFO.
• Automate as much of the process as possible.
• Financial management is key; ensure that financial
analysis is done annually, if not more frequently, on
contracting expenditures.
• Determine a rigorous, yet straightforward, way to
document FMV consistently.
• Predetermine a way for your organization to handle
exceptions
12
13. Determine and document FMV with
market data
• Using high-quality market data is the fastest, most
straightforward way to determine and document
physician payments
• Test for commercial reasonableness
• Determine if there’s a match in scope of services
• Find the appropriate market range and determine
payment
• Document FMV
13
14. Seek outside help when needed
• If there is no comparable market data or the position
demands particular qualifications, consider getting a
valuation.
• Smaller hospitals typically use outside valuation firms
for FMV opinions, given resource constraints.
14
16. Don’t be held hostage
• Avoid situations where you must overpay to provide
coverage.
• Sharing market data with physicians can be helpful to
demonstrate what’s realistic. It’s also important to
explain how federal guidelines restrict payments.
• Always consider alternatives to paying a per diem,
like paying per episode or for uncompensated care.
16
17. Do more with less
• Automate as much of the contracting process as
possible.
• Using easily accessible market data as the
foundation of your process can cut down wait times
from valuation firms and expense, too.
• Document FMV compliance with easy-to-read,
consistent reports that outline key elements from
contracts, like payment, hour requirements, etc.
17
18. Compare your organization to like
organizations
• When possible, use data from facilities with similar
demographic profiles.
18
Hi there. Welcome to MD Ranger’s educational video series. Today we’ll cover Stark Law, a federal law that governs financial relationships with physicians. Feel free to share this on-demand webinar with anyone at your organization who might benefit from a quick refresher on this key regulation.
Here’s what you’re going to learn today.
Larger hospitals sure have the advantage when it comes to physician expenses. As you can see from this chart, critical access hospitals have significantly increased cost when it comes to physician expense. Larger hospitals under 100 beds have significantly less than their very small counterparts, but compared to other hospitals, they are still have larger relative burdens.
On average, hospitals spend $66,632 per ADC annually. Hospitals with an ADC of less than 100 spend double that amount, and hospitals with an ADC of less than 25, largely Critical Access Hospitals, spend $452,439 per ADC annually. Independent hospitals also spend 15 percent more than the average.
To summarize stark as succinctly as possible, the law intends to restrict certain physician referrals.
Read.
Immediate family members include the following—don’t forget in-laws or grandparent’s spouses!
Now, we are going to discuss how our subscribing hospitals address structuring payments within their deals, as well as components of these contracts like incentive payments.
That concludes our webinar today. We’re glad you joined us. Email or call with questions.
