Roadmap for Physician Contracting: Setting Up for Success in 2017
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This document provides guidance on best practices for physician contracting in 2017. It summarizes recent enforcement actions by the Department of Justice against hospitals and physicians for fraud. It recommends outlining a standardized physician contracting process, determining fair market value for agreements consistently, centralizing all contracts, educating staff on regulations, and auditing contracts regularly to mitigate compliance risks. Physician demands for call coverage payments and medical directorships may increase in 2017 due to income uncertainty.
Roadmap for Physician Contracting: Setting Up for Success in 2017
- 1. 1 ROADMAP FOR PHYSICIAN CONTRACTING: SETTING UP FOR SUCCESS IN 2017 DECEMBER 2016
- 2. Today’s topics • Who we are • Guidance from OIG • Our crystal ball: physician contracting in 2017 • Best practices to kick off the year 2
- 3. MD Ranger: the foundation of your compliance process Standardize processes and rates Document FMV Access 250+ payment benchmarks Review contracts and monitor with ease Have smarter, data-driven physician negotiations Mitigate compliance risks 3
- 4. 4 Our benchmarks • Call Coverage (55+) • Medical direction (85+) • Hospital-based services (15+) • Administrative • Medical Staff Leadership • Diagnostic/other services e.g. ROP, autopsy, dialysis • Hospital-based stipends • Clinics, professional services • Telemedicine • Residency/teaching/GME • Uncompensated care • Meeting attendance, peer review, IT/EHR and quality initiatives • 13 Pediatric services, with more emerging each year Hospital-characteristics drill down for ADC, bed size, trauma status, urban/rural, stroke centers, and more. Used in academic medical centers, integrated delivery systems, and hospital organizations.
- 6. 6 LESSONS FROM THE OIG
- 7. Yates Memo • Published September 2015 • Discusses the personal accountability of physicians and healthcare executives in fraud • Example: Tuomey CEO Jay Cox fined $1 million this year for violations 7
- 8. Settlements abound • ACA turns up the heat • DOJ funnels more resources into investigating fraud 8
- 9. Tenet Healthcare Corporation: $513 million • Two Georgia hospitals charged with paying kickbacks in exchange for referrals 9 Lexington Medical Center: $17 million Dr. Venkateswara Kuchipudi: $786,000 • Violated Stark by improper financial arrangements with 28 physicians • Involvement in complex Medicare fraud scheme landed this physician jail time, too
- 11. Medical directorships are both risky and expensive • Many organizations auditing medical directorship payments and looking for ways to streamline spending • These administrative payments attract scrutiny 11
- 12. Call coverage demands from physicians could increase • Some organizations don’t pay for call; others spend millions annually • With incomes uncertain, physicians may ask for additional payments for financial security • If coverage becomes an issue, providing ED coverage services could become even less appealing to doctors 12
- 13. Healthcare organizations face larger fines • The Bipartisan Budget Act of 2015 mandated that federal agencies make inflation adjustments to the amounts of civil monetary penalties. • This year’s increases are substantial: False Claims Act penalties have not been adjusted in 20 years. • The fines for False Claims Act violations are now $10,781 at the minimum and $21,563 at the maximum. • Stark Law fines increased from $15,000 to $23,863 per violation • Anti-Kickback Statute fines increased from $50,000 to $73,588. • Penalties are expected to increase based on inflation each year. 13
- 14. False Claims Act in the spotlight • Since the passing of ACA, the False Claims Act has become more prominent in healthcare • The FCA could apply to any fraudulent government payment (like Stark and Anti-Kickback violations) • Experts seem to think that the False Claims Act will continue to be a liability for organizations. Remember: FCA penalties substantially increase the potential repayment amount. 14
- 15. 15 BEST PRACTICES FOR KICKING OFF 2017
- 16. Outline your organization’s process • Give your process the organization it needs with a foundational document: • Include the purpose of your physician contracting process and the intended outcomes. • Outline step by step how contracts will be processed as well as team roles and responsibilities. 16
- 17. Get buy-in and consensus • Get buy-in from key executives, committees, and board members • Ensure that leadership understands importance of physician contracting compliance process and agrees upon processes and guidelines • Communicate compliance measures and safeguards to hospital employees and medical staff 17
- 18. Store all your contracts in a centralized location • Contract management systems are key to all physician contracting programs • Find the right vendor to meet your needs • Demand utilization 18
- 19. Develop a process to determine FMV consistently • Certifying that physician agreements are FMV should be the cornerstone of effective physician contracting programs • Discuss what is best for your organization with your team • Once determined, codify your process in a foundational document 19
- 20. Create (or update) guidelines for handling exceptional agreements • Not every agreement should be negotiated above the 75th or 90th percentile; however, organizations always have one or a few exceptions • Be prepared and create an exceptions process in advance to process these requests • If you are smart about it, you can structure guidelines in a way that discourage exceptions—always a good thing 20
- 21. Educate your staff on regulations and enforcement actions • Join associations or attend conferences • Keep up with the OIG online • Consider yearly trainings 21
- 22. Make a plan to audit physician contracts • Annual audits are always a good idea • Consider smaller audits each quarter • Whatever your schedule, use technology to make your job easier 22
- 23. Thank you! MD Ranger, Inc. | 1601 Old Bayshore Hwy, Ste. 107 | Burlingame, CA 94010 www.mdranger.com 23
Editor's Notes
- #2: Hi everyone thanks for joining us today for our on-demand video. Today we want to talk about how to set your contracting program up for success in 2017. We want to give you a quick get started guide for doing just that in today’s brief video.
- #3: Before we dive into the heart of our program today, we’ll talk about who we are as well as discuss the hottest topics in physician contracting, straight from OIG trends. We’ll then predict what we think will be the biggest areas of concern for those involved in physician contracting in 2017 Then we’ll wrap up with a few best practices to get you started on the right foot.
- #4: MD Ranger is an online platform that integrates over 250 propriatary physician contract benchmarks and a suite of compliance and financial reports. MD Ranger helps subscribers standardize their physician contracting process in the way that is best for their organization. Because our benchmarks and online platforms can be integrated into all types of compliance and legal processes, we can be a resource to all types of organizations. . These types of financial arrangements can be very risky to organizations and to physicians—given federal regulations and hightened scrunity by the government. Our subscribers use the MD Ranger platform to mitigate that risk and monitor risky arrangements.
- #5: Here is a comprehensive list of the types of different physician agreements we benchmark. We drill down all our benchmarks by meaningful hospital demographics, like hospital size, trauma status, and more.
- #6: We began producing benchmarks in 2009 have have grown from a database of 4,000 to 24,000 contracts since. This is a map of our subscribers and contract database MD Ranger has more than 225 participating healthcare organizations. We work with all types of facilities from large urban trauma centers to small, rural critical access facilities, surgery centers, dialysis centers and everything in between.
- #7: Over the past 3-4 years, physician contracting has moved into the regulatory spotlight. Let’s look at what the OIG has been up to over the past year and what is important to them within this area of compliance.
- #8: In September 2015, Sally Yates wrote a memo stating that the DOJ was going to hold individuals accountable in corporate wrongdoing cases. Since its release, the Yates memo has been one of the hottest topics in healthcare compliance. We have seen doctors as well as hospital executives face fines for improper physician payments. This September, the former CEO of Tuomey Healthcare was fined $1 million for his role in the hospital’s Stark violations. He is also excluded from any organization participating in federal programs for the next four years. It seems reasonable that the number of personal liability fines will increase in 2017. Thus, it is imperative that individuals including physicians, hospital executives, and those involved with physician contracting pay attention to how their actions could be perceived in any government investigation. Individuals can no longer assume the organization alone will take the blame.
- #9: We’ve seen settlements continue to appear in the news in 2016 and we feel it is likely to continue in 2017. Provisions in the ACA allocate more resources to pursuing healthcare fraud. Thus, the DOJ has more focused resources, in particular for US cities were fraud is rampant.
- #10: Here are just three examples of settlements in 2016. Two observations: first, these numbers are huge and massively impactful for organization who already run on tight margins. Second: as you can see, healthcare executives are increasingly at risk. Dr. Kuchipudi was one of many executives and physicians who served jail time and paid heavy fines for this complex fraud scheme.
- #11: Let’s look forward to 2017 and talk about what MD Ranger sees as emerging trends.
- #12: We have noticed more and more organizations concerned about medical directorship spending. For good reason: lots of money AND area of compliance risk. We recommend that all healthcare organizations who pay medical directors perform audits and assess the following: -are rates on a contract by contract basis within FMV? Is there documentation? -do we have too many medical directors across the board? -does the amount we are spending on medical directors make sense for an organization of our type and size?
- #13: It is impossible to predict certain compensation trends, but given the flux of physician incomes and the uncertainty that comes with that, payments for services like call coverage could potentially increase. This is more likely if insurance coverage became more of an issue over the next few years should ACA become erroded.
- #14: The Bipartisan Budget Act of 2015 mandated that federal agencies make inflation adjustments to the amounts of civil monetary penalties. The Budget Act allowed agencies to make “catch-up” adjustments. This means that this year’s increases are substantial: False Claims Act penalties have not been adjusted in 20 years. The fines for False Claims Act violations are now $10,781 at the minimum and $21,563 at the maximum. Stark Law fines increased from $15,000 to $23,863 per violation and Anti-Kickback Statute fines increased from $50,000 to $73,588. The penalties are expected to increase based on inflation each year. Healthcare organizations with violations will face much bigger fines. The potential impact of these higher fines could be crippling for organizations, and doing everything to prevent violations is even more important now. We expect to see record-setting fines and settlements with healthcare entities in 2017.
- #15: Stark and the Anti-Kickback Statute have always been driving factors in physician contract regulation, however, over the past few years, we have seen the False Claims become more and more prominent in improper physician payments cases. The False Claims Act applies to any fraudulent payment collected from the government (like Stark and Anti-Kickback violations) when the government programs are in place at a healthcare organization. Experts seem to think that the False Claims Act will continue to be a liability for organizations. This is especially worrisome for hospitals, since False Claims Act penalties substantially increase the potential repayment amount.
- #16: To wrap things up, lets talk about some key best practices to implement now for a successful 2017.
- #17: Every organization needs a physician contracting process. Most organizations have one—but it might be codified in a document. To prepare yourself for the new year, create a document that outlines your entire process and the key players. This is not only compliance best practice but it will also keep everyone on track.
- #18: You also need buy in from the key executives at your organization. Not only should they understand the process and agree with the decisions your team has made around your own process, they also need to enforce the rules and be examples of positive compliance practices.
- #19: This best practice may seem like a no brainer but it’s easier said than done! If you aren’t keeping all your contracts in one easy to access location, then make it a priority in the new year. Not only should you strive to keep your contracts all in one location and up to date– you should demand that your team use the system.
- #20: Making sure your FMV process and requirements are consistent is another best practice to employ in the new year. Your org should decide what is best and what resources you need.
- #21: No organization should consistently negotiate agreements above the 75th percentile; however, it’s to be expected that every hospital have one or two agreements on the high end. We suggest creating a process well in advance of encountering exceptional agreements so that things don’t get out of hand. You will have a fair process to evaluate whether or not the agreement truly is exceptional and depending on how you structure your process, may even reduce requests to pay high rates!
- #22: Make it a resolution to keep your staff up to date on regulations and laws—education is important in the compliance world. HCCA is a fantastic organization to keep up with physician contracting compliance related issues
- #23: Make sure that you plan your yearly audit in 2017. Feel like you don’t have the resources to devote to such a big project? How about dividing it up into manageable chunks? When you audit, focus on the riskiest agreements. We recommend using tools to help you do this. MD Ranger has auditing tools that help you sort to find the agreements that deserve your attention.
- #24: Thanks for joining us, good luck in the new year.