MD Ranger provides tools and resources to help organizations audit physician contracts for compliance. An internal audit allows an organization to: 1) Identify any non-compliant agreements and risks related to the Stark Law, Anti-Kickback Statute, and False Claims Act. 2) Ensure all physician contracts have proper documentation of fair market value and accurate terms. 3) Benchmark contracts against facilities of similar size and specialty mix. Proper planning is important - determine current procedures, resources needed, timing, documentation, and follow up responsibilities. MD Ranger's online platform can support the entire auditing process.

1. 1
AUDITING PHYSICIAN CONTRACTS
WITH MD RANGER
MARCH 2016
WITH ALLISON PULLINS, CMO

2. 2
Agenda:
• Brief introductions
• Why audits are important
• Planning and executing your audit
• Key MD Ranger tools and reports for auditing

3. 3
Our database and subscribers

4. 4
Included in your subscription
Online platform:
• Benchmarks for call, medical direction, administrative services,
leadership positions, hospital-based services, clinical professional
services, and diagnostics
• Contract Data Tool to collect and organize contract data
• Analytic Tools to benchmark internal contracts and total expenditures,
identify compliance issues, compare facilities and analyze
expenditures
• Cost and compliance reports, including an annual Executive Report,
comparing your contracts to MD Ranger benchmarks
• Resources and research to support compliance efforts
• Customer support by experts in physician compensation, FMV
documentation, and compliance

5. Your host
5
• 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

6. 6
WHY AUDIT?

7. Uncle Sam says…
• Federalregulations govern physician payments
• Goal is to reduce/eliminate fraud
• Vague language, legal complexity, and physician
relationshipsthemselves can make adherencechallenging
7

8. Physician Self-Referral Law (AKA Stark
Law)
• Limits certain physician referralsof DHS if a physician or
the physician’sfamily members have a financial
relationship with that entity, unless an exception applies
• Limited to Medicare and Medicaid programs
• Liability statue, so proof of specific intent to violate the
law is not needed
8

9. Anti-Kickback Statute
• Prohibits the exchange or offer to exchange anything of
value in an effortto induce the referralof health care
services(any items) from any person or provider
• Much more broad than Stark
• Applies to all federalhealth care programs
• Intent must be proven
9

10. And lastly…. The False Claims Act
• Enacted during the Civil War, the law 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 federalgovernmentfor both Stark and AKS
violations
10

11. Penalties steep for non-compliance
• Stark Law: single civil violation could result in a fine of up
to $15,000 for each service, plus overpaymentobligation
and potential for high civil monetary penaltiesassessment
• AKS: single criminalviolation could result in a fine of up
to $25,000 for each service and imprisonment of up to five
years, and even absent of conviction, violators may face
exclusion from federalhealth care programs.
• False Claims Act: amplifies above penalties
11

12. Internal Audits = strong financial and
compliance controls
• Ensure all contractsare paying “fair” rates
• Identify redundantor excessive contracts
• Find opportunities for efficiency
• Determine appropriateleadership staffing levels
• Benchmark against similar facilities
12

13. Maintain key physician relationships
• Strong physician relationshipskey to a successful
organization and to promote clinical excellence
• Compensation decisionsimpact physicians immensely: be
deliberate,thoughtful and consistent
• Remember that all physician financialrelationships, even
non-monetary compensation,should have a contractand
FMV documentation
13

14. Align contracts to overall strategic,
financial, and compliance goals
• Are we on the right track?
• Are there additionalresourcesand support needed to
achieve our organization’sgoals?
• Is our organization taking compliance seriously?
14

15. 15
PLANNING AND EXECUTING
YOUR AUDIT

16. Goals of an Internal Audit
• Provide overview and oversightof organization-wide
contracting practices
• Uncover potentially non-compliantagreements, and bring
them to the attention of your legal and/or compliance team
• Ensure all agreementshave necessary documentation and
are accurate
• Check for duplicative services
16

17. Before you begin: current auditing
procedures?
• Determine if your facility or health system has procedural
guidelines for internal audits
• If there are steps in place, read carefully to see if additional
steps need to be considered and if the currentprocess takes
into accountphysician contract-specific needs(such as
Stark violation considerations, AKB risks, etc.)
• Learn what MD Ranger can offer your organization in
terms of auditing (and monitoring) support
17

18. Check processes
• Review overallcontracting process
• Is time commitment specified in contracts with hourly payment rates?
• Are time records kept and submitted?
• Are contract renewals timely?
• What is the approval process?
• Is FMV documented at the time of approval?
• Review major terms of each contract
• Ask key questions of each contract
• Documentprocess, results, and follow up
• Use MD Ranger for all these steps
18

19. Know your team and your resources
• Your audit processdepends on your organization
• Previous audits: figure out what worked, what didn’t
• Involve staff with contractoversight responsibility and if
you can, integrate other staff or contractorsto assist
19

20. If resources are limited…
• No auditing team? No problem!
• You don’t need much infrastructurefor a successful
internal audit—allyou need is MD Ranger
• MD Ranger’sonline platform can support your internal
auditing efforts
20

21. Executive involvement and support
• A member of the hospital’s executive team is typically
accountablefor the audit
• The individual should have the authority to execute follow
up steps
• Executive should reportthe audit’s results to other hospital
managementand determine if externalaudit is warranted
21

22. Timing
• Pick an appropriatetime
• Plan enough time to complete the audit
• When do the bulk of your contractscome up for renewal?
22

23. Project management
• Plan
• Documentthe plan, timeline, and responsibilities of team
members
• Schedule brief check-in meetings to discuss status of the
audit, issues, etc.
23

24. Recording the auditing process
• Review the entire auditing processand document this
discussion or meeting in full
• Create a file or document to capture your internal process.
Include:
• Memos written by responsible executive or leader
• Minutes from meetings
• Flags and notes
• List of follow up items in one place, as collected from above documents,
notes, memos, and emails
24

25. Follow up
• Execution and accountability are essential for a successful
audit, which is what makes follow up so important
• Track all next steps in one document; review progress
weekly in the month following the audit and monthly post-
audit
• Good project managementis key
25

26. Rinse and repeat!
• Perform annualaudits
• Consider monitoring contractsin the future (especially if
you’re a health system)
26

27. Does your health system need help?
MD Ranger, Inc.
650-692-8873
info@mdranger.com
27