Establishing rates for medical directorships has hidden challenges and risks. Even the most sophisticated market data benchmarks should be thoroughly examined and utilized properly. In addition to analyzing market data correctly, there’s an art to establishing rates policies for your organization. This webinar addresses challenges to determining appropriate rates and shares successful organizational policies.

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KEY STRATEGIES FOR COMPENSATING
PHYSICIAN ADMINISTRATIVE POSITIONS
JANUARY 2016
HOSTED BY ALLISON PULLINS, CMO, MD RANGER

2. 2
Outline:
• Address hurdles to determining administrative
compensation
• Discuss appropriate market data use
• Share successful organizational policies and tips
• Outline best strategies for setting rates

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ABOUT US

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Our database and subscribers

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MD Ranger includes:
• Benchmarks, available as reports and online queries, with market data for call,
medical direction, administrative services, leadership positions, hospital-based
services, uncompensated care, clinics and diagnostic testing services
• A secure, web-based Contract Data Tool to collect and organize contract data
(uploads via Excel available)
• 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

6. Your speaker
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• 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

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COMMON CHALLENGES
DETERMINING ADMINISTRATIVE
COMPENSATION

8. Why it’s difficult…the backstory
Attitude shifts for coverage and leadership duties
• Pressures on physician incomes
• Shortage of providers (willing to do administrative duties)
• Stark, Anti-Kickback laws
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9. There’s a lot to consider before you
pay:
• Is the position necessary (commercially reasonable)?
• Should you factor opportunity cost, especially on
more highly-compensated specialties? Does the
position significantly reduce a physician’s potential
compensation related to her practice?
• What current hospital policies could complicate
setting physician administrative rates?
• Where on the market range should you pay? Is this
payment “exceptional”?
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10. Determining need/commercial
reasonableness
• Use market benchmarks to learn how often hospitals
pay for the service
• Identify and document unique factors that affect your
situation, e.g. quality initiatives, adverse payer mix,
burdensome schedule, unique qualifications to
support that paying is reasonable
• Strategic tip: use market benchmarks to learn how
your hospital compares to similar hospitals in terms of
total number of medical directors, total hours of
services and total dollars—additional positions may
be unreasonable to compensate
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11. Compensating non-traditional
directorship payments
• Do you pay for physicians to chair committees?
Attend meetings?
• How do you pay physician leaders like
• Directors of EHR/IT
• Peer review
• Quality initiatives
• Teaching and research
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12. Considering opportunity cost
Definition: The cost of an activity measured in terms of
the value of the next best alternative, i.e. the one that is
not chosen.
• Single-specialty requirement or flexible?
• Situation-specific?
• Alternatives?
• Note that OIG says: opportunity cost can matter, but
it can also disguise unwarranted payments
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13. Where on the market range should you
pay?
• Generally, rates below the 75th percentile are most
likely compliant.
• However, many organizations choose to pay at the
median.
• Need to pay a rate above the 75th percentile? Make
sure to fully justify and document your reason and
need for higher payments.
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14. Current policies?
• How does your organization approach medical
director rates?
• Why was this policy implemented?
• Is it appropriate to make an exception to the rule for a
particular position? Is there a process to handle
exceptions?
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15. 15
LEVERAGING MARKET DATA
EFFECTIVELY

16. Attributes of high-quality data
• Sample size
• Participant characteristics
• Who reports the compensation data
• Consistent, comprehensive collection method
• Thorough and transparent auditing processes
• “Apples to apples” match with job description
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17. What does market data reveal?
• What similar hospitals pay
• How rates are distributed
• 25th, median, 75th and 90th percentiles
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18. Vital statistics
• Hours per month
• Annual payments
• Hourly rates
• Number of positions per service/service line
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19. Top five highest compensated medical
directorships—annual payments
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$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
Cardiology - Heart
Center
Pathology/Clinical
Laboratory
Pediatric Surgery Trauma Surgery Vasuclar Surgery
AnnualRate
Service

20. Highest annual hours reported by
service for administrative positions
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0
100
200
300
400
500
600
Ambulatory
Services
Trauma Surgery Pathology/Clinical
Laboratory
Vascular Surgery Pediatric Surgery
AnnualHours
Service

21. Highest compensated specialties: hourly
rates
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$0
$50
$100
$150
$200
$250
$300
Bariatric Surgery General Surgery Urology Neurosurgery Orthopedic Surgery
HourlyRate
Service

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SUCCESSFUL
ORGANIZATIONAL POLICIES

23. Pressure from all sides
• Consistent internal policies
• Cost considerations
• Honoring the physician’s perspective, requirements
• Compliance/external validation
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24. Finding a balance between forces
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25. Key strategies
• Consistent method to benchmark performance
• Deliberate and careful cost analysis
• Context, context, context
• Principles, guidelines, and procedures defined at the
executive level to steer policy
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SETTING RATES: OUR BEST TIPS

27. 1) Determine commercial
reasonableness
• Is it reasonable to pay for this position in the first
place?
• What’s our business case for paying?
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28. 2) Use high-quality data and analyze
the market ranges
• Make only apples to apples comparisons
• Consider sample size
• Focus on similar organizations
• Be consistent
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29. 3) Carefully outline expectations and
duties of the role
• Consider job description
• What’s the scope?
• How many hours per month?
• How are hours reported and tracked?
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30. 4) Determine if the role is truly
specialty-specific
• Could this role be filled by a physician with a different
specialty?
• How will the answer to this question affect the rate?
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31. 5) Determine that the paid hours per
month and rate paid are within reason
• Is the role a typical directorship role, or are there
“above and beyond” duties like starting a clinical
program or service line from scratch?
• Beware of hidden compliance risks in number of
hours per month or number of positions per service
• Take a second look at low or average rates—they
could hide compliance risks
• Always coordinate with AP on physician payments!
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32. 6) Consider your organization’s
policies and strategic goals
• Does this position help achieve overall goals?
• Does your organization have strict rules regarding
medical director and administrative compensation? If
so, are there creative approaches?
• Should you build in incentive payment terms to
achieve organizational objectives?
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33. We want to hear from you!
Allison Pullins
Chief Marketing Officer
apullins@mdranger.com
650-692-8873
www.mdranger.com
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