Insights from Ludi

Does your Hospital Manage Physician Agreements Correctly?

Posted by Gail Peace on May 8, 2017 9:55:00 AM

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Physician agreements are complex with tremendous detail around how the relationship will be governed, what duties are included and how compensation will work. While most organizations are quite proficient in the setup of these agreements, few are very good at managing the complexities of the agreement after they are executed.

Don't pay the price of a mismanaged physician contract - Download the Infographic

Why does it matter if you don’t follow the physician agreements as written? The government weighs in heavily through Anti-Kickback Statute, Stark Law, False Claims, all designed to protect the integrity of the patient / physician relationship. Boiled down, the government wants to ensure that when physicians order procedures, tests and hospital stays for patients that the services are truly needed by the patients. The government wants to ensure there is no incentive to increase the costs of care or deliver care that is not needed for financial gain to the physician. Inappropriate payments made to physicians are equal to fraud and is punished heavily both civilly and criminally.

So, what is physician arrangement integrity? Ideally, it’s a state of perfect performance on these agreements and is achieved only when all three legs of the stool are in place. The agreement is setup properly using contract management systems, the payment systems are within fair market value and when the day to day work being performed and payments being made are in compliance with the terms of the agreement and the mechanics of the payment systems. 

Physician agreements are complex with tremendous detail around how the relationship will be governed, what duties are included and how compensation will work. While most organizations are quite proficient in the setup of these agreements after lessons learned, few are very good at managing the complexities of the agreement after they are executed.

Put the right contracting strategies in place before it's too late - Download the Infographic

Why does it matter if you don’t follow the agreements as written? The government weighs in heavily through Anti-Kickback Statute, Stark Law, False Claims, all designed to protect the integrity of the patient / physician relationship. Boiled down, the government wants to ensure that when physicians order procedures, tests and hospital stays for patients that the services are truly needed by the patients. The government wants to ensure there is no incentive to increase the costs of care or deliver care that is not needed for financial gain to the physician. Inappropriate payments made to physicians are equal to fraud and is punished heavily both civilly and criminally.

So, what is physician arrangement integrity? Ideally, it’s a state of perfect performance on these agreements and is achieved only when all three legs of the stool are in place. The agreement is setup properly using contract management systems, the payment systems are within fair market value and when the day to day work being performed and payments being made are in compliance with the terms of the agreement and the mechanics of the payment systems.

Shocking Stats on Physician Contract Pitfalls

Topics: physician agreements, physician duties, hospital management