Here are our responses to some critical questions we have been asked by some of our subscribers relating to the unfolding COVID-19 crisis.
Question: Can we increase the hours that are defined in various physician contracts to address our response to COVID-19?
Answer: Yes. The response to a public health emergency is an extraordinary circumstance that can justify waiver of the Stark ‘set in advance’ guidelines.
Question: Can we compensate physicians for higher than our standard hours or hourly rates, if necessary, to secure needed services related to COVID-19?
Answer: Yes. These efforts epitomize the kind of extraordinary circumstances that reasonably allow for normal benchmark limits to be exceeded to secure needed physician services. In standard valuation practice, typical compensation benchmark guidelines are between the 25th to 75th percentile of market rate benchmarks, or in some cases up to the 90th percentile. Your organization should consider its current internal guidelines and determine if conditions require efforts above and beyond standard payment terms.
Question: How should the principle of allowances for extraordinary circumstances be translated into practice?
Answer: Consider and execute the following:
- Adjustments to compensation should be documented as directly connected to the COVID-19 response.
- Adjustments should be clearly defined as temporary with applicability only until the heightened response is no longer required (with a provision for periodic review).
- Work hours and compensation rates can exceed the 75th percentile or even the 90th percentile as indicated by sound justification of the need for services, and prudent negotiations that reflect reasonable judgement.
Question: What service benchmarks are relevant to this extraordinary event?
Answer: This depends on the hospital and how you are responding to the crisis. Some positions that we think may be relevant include infectious disease-related positions, medical directors of service lines such as emergency services, internal medicine hospitalists, OB and critical care. Similarly, hourly rates for urgent care or outpatient clinic staffing may be useful.
MD Ranger announced the publication of new 2020 physician contract benchmarks for non-salaried physicians. The 2020 report underscores the significance of physician payments for non-clinical services as a major component of hospital spending. According to MD Ranger’s database, the average community hospital spends more than $8 million per year on non-employed physician arrangements. MD Ranger’s physician payment benchmarks include ED call coverage, medical directorships, administrative services, hospital-based services, medical staff leadership, telemedicine and diagnostic testing, in addition to clinical hourly rates.
MD Ranger’s 11th annual report features 600+ benchmarks derived from a database of over 39,500 contracts from 330 facilities in 31 states across the US, making it the largest survey of non-salaried physician payments. Health care providers use MD Ranger’s benchmarks to document fair market value and comply with federal Stark and anti-kickback regulations. MD Ranger is used by hundreds of healthcare organizations, including hospitals, health systems, trauma centers, critical access hospitals, medical groups, LTACs and other specialty and outpatient providers. Brian S Colonna, CHPC, HIPAA Manager of Privacy at Renown Health in Reno, Nevada, says, “Creating simple, effective policies for compensating physicians is crucial to remain compliant. At Renown, we use MD Ranger as the foundation for our physician contracting process. From identifying the right rates, to measuring overall financial performance, MD Ranger is easy and intuitive to use and has helped our organization do more with fewer resources”.
MD Ranger’s benchmarks demonstrate the cost and scope of services that health care facilities purchase from physicians. Founder and CEO Penny Stroud says, “In these uncertain times of the COVID-19 pandemic, healthcare organizations rely even more heavily on physicians for key services like emergency call coverage, medical direction, clinic staffing, emergency coverage, leadership and other administrative services. Providers across the country have used MD Ranger’s unique benchmarks to determine the right payment rates for both routine and pandemic-related physician services”.
Key findings from the 2020 benchmarks include:
- Despite growth in physician employment by hospitals, contracted services such as ED call coverage, administrative positions and hospital-based services--in particular hospitalists-- continue to grow in scope and cost
- Emergency department call coverage per diems increased 8% at the median, from $600 per diem to $650 per diem across all services. While not all ED coverage services increased in payments, many did: urology, interventional radiology, neuro-interventional and infectious disease all experienced significant increases.
- Payments for interventional services such as neuro-interventional, interventional radiology and stroke-related services continue to grow year over year. For example, in 2015, only 4% of MD Ranger participating hospitals paid for neuro-interventional ED call coverage while in 2020, 19% paid. Rates for these services have increased as well. In 2018, the 75th percentile per diem rate for neuro-interventional ED call coverage was $1,190; in 2020, it jumped to $1,400.
- Hospitals continue to move toward hospital-based service agreements to replace call coverage for a range of services, particularly laborists, critical care and general hospitalists.
- OB laborist agreements have increased in both percent of hospitals paying and total annual payments, while the percent of hospitals relying on ED call coverage arrangements for obstetrics has declined. Between 2019 and 2020, the average stipend payment for laborist programs rose nearly 20%.
- Other hospital-based services which saw increasing payments were critical care, pediatric critical care and psychiatric hospitalists; annual payments for each of these services rose more than 15%. Not all hospital-based services increased, however; the median stipend for both pathology and emergency physician services fell between 2019 and 2020. With COVID-related contingency plans, we may see continued growth in annual payments since many facilities staffed up to prepare for potential COVID patients while non-COVID volume and payer mix have been significantly impacted resulting in payment shortfalls.
New 2020 benchmarks include:
- Obstetrics - Second Call Coverage
- Podiatry Call Coverage
- Dental Call Coverage
- Plastic and Hand Surgery Call Coverage
- Department Chair: Behavioral Health
- Vice Department Chair/ Section Chief
- Department Chair: Pathology
- Supervision - Allied Health Professionals
- Obstetrics/Gynecology - Clinical Hourly Rate
About MD Ranger
MD Ranger partners with leading health care organizations to simplify the physician compensation process. Through a web-based product, MD Ranger helps health care organizations and medical groups set compensation and document FMV. MD Ranger’s approach streamlines the process and reduces the cost of compliance documentation and negotiation for large and small health care providers.