5 Avoidable Mistakes with Physician Arrangements and FMV
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Organizations often make mistakes in both the creation and the execution of physician agreements. By knowing what the common mistakes are, you can avoid or correct issues before there are potentially serious violations and consequences. This webinar will address common physician contracting challenges and how to avoid them. Key topics to be discussed include: -Physician agreement processes -Best practices for FMV -Mistakes that can occur -Avoiding compliance and financial pitfalls
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5 Avoidable Mistakes with Physician Arrangements and FMV
- 1. 5Avoidable Mistakes with Physician Agreements and FMV Commercially Reasonable Time Tracking Fair Market Value Streamline & Standardize Templates
- 2. Agenda § Complimentary organizations § Introductions § Framing the challenges § Process for creating and managing physician arrangements § 5 mistakes and how to avoid them § Best practices for ensuring integrity of physician arrangements May19,2016 2
- 3. Introducing Ludi 3 ▪ Eliminate paper physician time logs ▪ Operationally track physician contracts for ▪ Call coverage ▪ Co-Management ▪ Medical Directorships ▪ Research ▪ Teaching ▪ Standardize and streamline the processing and payment of physician time logs with automation ▪ Manage and Measure physician alignment expenditures ▪ Improve compliance on documentation of time logs ▪ Monitor strategy and make changes May19,2016
- 4. 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 4 May19,2016
- 6. Physician arrangements complex Medical Directorships Committee Leadership Bundled Payment Co- Management Joint Ventures Professional Service Agreements Employment Shared Savings Level of Integration Spend How many physicians are you economically aligned with?
- 7. Physician alignment spend is in silos and is approximately $6M per hospital 7 Medical Directorships Co-Management On-Call Research and Teaching Clinical Integration Bundled Payment Employment May19,2016
- 8. Determining and documenting FMV is difficult § Physician contracts must be fair market value § Valuations are expensive § Market data (historically) difficult to obtain § Volume of physician agreements to document is overwhelming § Poor record-keeping makes processes laborious, challenging 8 May19,2016
- 9. 9 Execution is a big problem LEGAL CONTRACT MGMT DUTIES FAIR MARKET VALUE TERMS May19,2016
- 11. Process of creating arrangements 11 Determine Commercial Reasonableness Both parties sign the agreement Determine FMV May19,2016
- 12. Non-automated processes lead to: 12 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 May19,2016
- 13. Process of executing agreements 13 Physician Logs Time Physician Receives Payment May19,2016
- 14. Most tracking currently takes place on paper and goes through a multitude of steps for approval and payment 14 Poor execution leads to: Errors Physicians feel frustrated Compliance risks Spending too much May19,2016
- 16. 1. Agreement is commercially unreasonable § When payment is requested, never grant without thorough analysis § Market data can help § 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 16 May19,2016
- 17. 2. Fair market value isn’t properly addressed § Organizations sometimes rely on historical payments § Market forces shape difficult negotiation processes § Compensation benchmarks used have poor sample sizes, thus making rates unreliable § Organizations don’t have thorough documentation processes 17 May19,2016
- 18. 3. Agreement structure lacks clarity § Payment is not based on element of time: Hourly rate x number of hours expected § Physician will be paid $5,000 quarter § Duplicate with other agreement, compensable duties in 2 places § Time, duties or payment not specified § Joinders are missing for physicians on group agreements § Silent on elements, ie how long do physicians have to submit time logs § Time log format is confusing, leads physicians to documentduties not in the agreement 18 May19,2016
- 19. 4. Time tracking is a mess Contract ends Physician continues to submit time logs Late logs Physician hands in a full year’s worth of logs, past 90 days allowed No time frame For submission, contracts should be clear on how long you have to submit, i.e. 90 days Multiple time logs Physician inadvertently submits the same log twice Illegible Time log is illegible 19 May19,2016
- 20. 5. Break the rules of your own contract 20 § Hours worked is over the maximum, thus as are payments § Two time logs submitted for same period, or none at all § Not following contract rules § Layering or stacking of agreements, such as: § Employment § Medical director § Co-management § On-call May19,2016
- 22. 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! 22
- 23. Standardize the contract setup 23 1. Legal templates for various types of agreements 2. Include clear FMV detail, i.e. number of hours x hourly rate to arrive at monthly payment with defined monthly or annual maximum 3. Specify the number of days allowed to submit 4. Identify any unique duties to this specialty 5. Minimize the number of unique duties May19,2016
- 24. Remove steps that aren’t adding value 24 May19,2016
- 25. Standardize and streamline the duties Example duties for regulatory compliance: § 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 25 Reduce variation: Time consuming and an operational challenge to check time log against specific duties each Why? 10 unique duties per agreement (10 X 60 = 600) May19,2016
- 26. Automate time tracking and approvals and create audit trail 26 May19,2016 § Respect physician’s time by providing an automated solution with § better documentation § Hard code the check request eliminating errors on payments § Assign clear accountability to those approving § Confirm EACH payment is still within FMV § Maintain all past time logs § Audit process
- 27. Thank you Gail Peace Ludi gail@ludiinc.com 904.553.4542 Allison Pullins MD Ranger apullins@mdranger.com 650-692.8873 27 May19,2016