The federal government has continually upped its efforts related to investigating, prosecuting and combating healthcare fraud. This focus has led to increased scrutiny on hospital-physician financial relationships and contracting issues. This interest has sharpened especially with the movement of physician providers into employment, medical directorships or other compensated relationships with local hospitals.
There has been cases of alleged improper physician compensation arrangements. These cases can and have led to significant settlements or damages. The magnitude of potential damages has placed physician arrangements in the line of sight of attorneys and private citizens with the potential to recover a portion of the damages or settlement.
In response, hospitals and providers have become proactive in analyzing existing physician compensation relationships, developing processes and templates for new relationships, and initiating internal reviews of current arrangements. These reviews allow hospitals to address and correct any potential errors or liabilities and consider whether self-disclosure the government is necessary.
Five Tips for Ensuring Physician Contract Compliance
- Financial Sign-off. A specific person, preferably from the hospital compliance department, should sign-off of every financial arrangement between the hospital and a physician, including employment agreements, management agreements and medical directorships. This person should not be party to the negotiations between the parties, but independent of the contracting parties.
- Valuation Statement. There should be a specific valuation memo on file that provides the manner in which the compensation was determined, the surveys used for comparison and benchmarking, and whether an outside valuation opinion was sought. The hospital compliance committee should review and sign-off on the fair market valuation review, which should be completed prior to final negotiations of the contract. Valuation reviews should be conducted on each compensation relationship between the hospital and a physician. Remember: CMS has commented that the fair market value of physician arrangements is an important element of any relationship; CMS will continue to scrutinize fair market value arrangements as fair market value is an essential element of many exceptions.
- Stark Law & Compliance Sign-off. As part of the compliance review, legal counsel should review the agreements to ensure they meet a core exception under the Stark Act and a safe harbor to the Fraud and Abuse Statute. These exceptions and safe harbors may be related to bonafide employees, personal services or independent contract arrangements. These exceptions and safe harbors are: a physician contract must (a) be set forth in writing, (b) be for commercially reasonably purposes, and (c) provide for compensation that is set in advance, consistent with fair market value and not determined in a manner that takes into account the volume or value of referrals or other business generated between the parties.
- Contracting Checklist. Hospitals should develop and maintain a simple contract checklist that should be used in all physician compensation arrangements. This checklist will provide a step by step process for creating and executing a financial relationship. Each arrangement should be reviewed in the same, consistent manner; therefore, if investigated, the hospital can demonstrate that it systematically analyzed each relationship in the same meaningful manner. Note that any changes to the checklist or process should also be documented. And, a physician contract file should be maintained for each compensation arrangement, noting any changes to the arrangement.
- Periodic Reviews. The compliance committee (or whatever group is responsible) should create a schedule to review each compensation arrangement. The review should ensure that proper documentation and justification supports any changes to the relationship or the compensation agreement. For the compensation relationships, the review should ensure that all parties are complying with the terms of the agreement and that the proper documentation supports the compensation and services being contracted.
These are just a few of the tips to stay inside the lines in regard to contract compliance. Another way to ensure compliance with physician contracts is through timekeeping compliance app. Having physicians use a digital log time and duties, with an electronic signature can greatly reduce risk. Physician compliance software should provide a process that ensures oversight, meaning, that it will remind physicians to complete their logs, disallow late entries or reject over payments, identifies which agreement time is being submitted and has a review and approval process that includes an audit trail. Plus, it should be accessible on desktop and mobile devices, providing physicians with end to end flexibility and mobility.
Dynafios has developed a cost-effective physician contract compliance tool specifically created to provide a repeatable process to track and submit time in accordance with physician contracts—directorships, on-call, co-management and more. Dynafios TRACE is an easy to use physician timekeeping app that accommodates the busy schedule of any physician. TRACE offers untethered mobility with any smart device, takes seconds to use and affords the transparency desired by both the physician and the hospital. For more information on TRACE or for a demonstration, please email firstname.lastname@example.org or call 877.858.3282.