Table of Contents
Introduction
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 contract compliance issues. It has sharpened especially with the movement of physician providers into employment, medical directorships or other compensated relationships with local hospitals.
There have 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 to 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 on every financial arrangement between the hospital and a physician, including employment agreements, management agreements and medical directorships. This person should not be a party to the negotiations between the contracting parties, but should be independent of them.
Valuation Statement
There should be a specific valuation memo on file that explains how 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 before final contract negotiations. Valuation reviews should be conducted on each compensation relationship between the hospital and a physician.
Remember: CMS has stated that the fair market value of physician arrangements is an important element of any relationship; it 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 contract 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 relate to bona fide employees, personal services or independent contractor 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 contract compliance committee (or the relevant group) should create a schedule to review each compensation arrangement. The review should ensure that proper documentation and justification support any changes to the relationship or the compensation agreement.
For compensation relationships, the review should ensure that all parties comply with the terms of the agreement and that the proper documentation supports the contracted compensation and services.
These are just a few tips to stay inside the lines regarding contract compliance.
Strengthen Contract Compliance Further With Physician Timekeeping Software
Another way to ensure compliance with physician contracts is through a physician timekeeping compliance app. Having physicians use a digital log of time and duties, with an electronic signature, can greatly reduce risk.
Physician compliance software should provide a process that ensures oversight, meaning it will remind physicians to complete their logs, disallow late entries or reject overpayments, identify which agreement time is being submitted, and include a review and approval process with an audit trail. Plus, physician timekeeping 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 that provides a repeatable process for tracking and submitting physician timekeeping in accordance with physician contracts—directorships, on-call, co-management, and more.
Dynafios’ physician timekeeping app accommodates the busy schedules of any physician. It 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 about Dynafios’ provider compensation software or to schedule a demonstration, please email info@dynafios.com or call 425.392.3887.
