Rural Hospital? Here Are Some Things to Consider for Your Unique Physician Contracting Situation

Being a rural hospital brings unique challenges and opportunities.  Most rural hospitals operate with limited resources, smaller budgets, and poor payer mixes.  CEO’s of these facilities tend to be shorter staffed than their urban or suburban peers, and often have physician recruiting, relationships, and contracting under their purview.  What should rural hospitals keep in mind while partnering with physicians?  Here are some thoughts from us:

  • Always establish that compensating for coverage is commercially reasonable.  This is particularly important when you are struggling to find a physician to take emergency call, and unfortunately many rural hospital executives find themselves in this position.
  • However, just because it’s difficult to recruit a physician or pull together a call panel doesn’t mean you can pay a doctor whatever they demand.  Unless you are entering an employment agreement with a physician, paying her fair market value for taking call still applies.  When trying to establish the best rate, consult market data that can be drilled down to rural/urban status.
  • Having high quality, objective market data at hand will strengthen your position when in negotiations.
  • Invest as much time as you can to create a straightforward and efficient way to handle physician contracts and document FMV.  Not only will it help your organization understand how much it is paying physicians for these types of services, it will also help in case of an audit.

Attending NRHA’s annual conference in Vegas this week?  Check out MD Ranger at Booth 332.  We want to learn more about your physician contracting challenges.

allison

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Structure Your FMV Process

MD Ranger prepared a quick list of compliance tips for hospital and health system executives dealing with physician contracts for administrative, leadership, on-call, and hospital-based services. These tips will help shape a new physician contracting compliance program or refine an existing program. Apply these tips to create a successful compliance program to help prevent Stark violations.

Create a document that defines your physician contract compliance program and your process for establishing FMV.In this document, describe the procedures for screening physician contracts, and most importantly, the steps you will take to ensure and document compliance for all physician financial arrangements. Within the document, outline:

  • Accountable executive(s)
  • Day-to-day staff and their responsibilities
  • Strategic goals
  • FMV documentation process
  • When to seek outside review

allison

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Our Fifth Annual Benchmark Report: Coming Soon

It’s an exciting time at MD Ranger headquarters in Burlingame, California. Over the past four months, we have collected thousands of contracts from our 200+ subscribers across the US. In preparation for publishing our annual benchmark report (coming soon!), we’ve been auditing our data and working around the clock to ensure our data is reported accurately.

One of the reasons why we’ve been able to produce high quality data year after year is our rigorous data auditing process. We like to be transparent, so I wanted to take the opportunity to tell you how we whip our data into shape.

First, we review all data that comes in from subscribers as soon as it comes.  This allows us to look at the hospitals’ contracts holistically, and in relation to all other contracts at the hospital. This makes it easy to catch if there’s a strange number of contracts (say, three medical directors of radiation oncology on one campus), or if there’s a strange per diem (say, $5,000 for family practice coverage that probably is $500 instead). We run updates on our database internally, to check and see if our data is changing (and if so, by how much).

As we get closer to production time, we start auditing our data by service.  What this means is that we take an entire service, say general surgery call coverage, and we look at each contract within the service for errors. We pay special attention to outliers (especially high or low contracts), as well as statistics that have changed from last year’s published data.  As our database grows larger and more diverse, the more stable it becomes.

Questions about our auditing process?  Shoot me a note at This email address is being protected from spambots. You need JavaScript enabled to view it.

allison

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Establish a Rigorous Contract Management Process for Physician Compliance

MD Ranger prepared a quick list of compliance tips for hospital and health system executives dealing with physician contracts for administrative, leadership, on-call, and hospital-based services. These tips will help shape a new physician contracting compliance program or refine an existing program. Apply these tips to create a successful compliance program to help prevent Stark violations. 

Establish a rigorous contract management process and assign staff to oversee day to day management of your physician contracts. Contract management may be straightforward in terms of processes and best practices, but the trick is ensuring proper execution and consistent application of procedures. Every compliance program should be incorporating the following contract management elements:

  • Have a contract for all physician arrangements (even non-monetary ones)
  • Organize your contracts by date, party, and expense
  • Alert your team to expiring contracts well in advance of expiration
  • Establish a renewal process that includes:
    • Reviewing or updating a contract
    • Checking the rate against relevant benchmarks
    • Negotiation strategy
    • Necessary approvals
    • Strategic contract management

It is also important to identify and prevent the development of silos that mask overall payments to individual physicians or groups for similar services. Contract management teams should work across the organization as a true cross-functional team so that there is a comprehensive appreciation of contracting costs.

allison

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