Question about compensation model

[drfun]

I have been working a week a month at a rural critical access hospital for last one year as a surgical subspecialist . I have what I thought was a good  deal where I get a  daily rate and 50% of surgical charges . There has been some shake up with the administration and I am being now told that my earlier contract is not kosher . I would like to pick the minds of this very savvy and knowledgeable community about the veracity of the statement that being paid for surgical procedures in form of gross charges may not pass the muster if audited by CMS or similar entities . The concern is that I may be tempted to perform uneccessary surgeries which befuddles me.
I am wondering if the new COO is trying to change the contact simply to justify less compensation for me . In private practice , hospital employed positions etc compensation is based on productivity which for surgeons is often based on surgeries done .
I do feel this is unfair as I helped create a surgical practice and started from scratch in an environment with a unique set of challenged and turbulence and understandably had a slow start . Now that the machine is running well they want to change the compensation model .

[Side Hustle Scrubs]

drfun

I am wondering if the new COO is trying to change the contact simply to justify less compensation for me .

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Yes.  They are trying to pay you less money for the same amount of work.

i don’t know why CMS would suddenly object to a fee for service model.  More than likely the hospital accountants object because they are likely collecting less than half of charges.

There is great money to be made from desperate situations.  Now you’ve got their surgical practice up and running and they are less desperate.  If you’re only there a week a month does that mean there are other surgeons there the other three weeks?  If so, they may pay them less and the administration sees you as the fat that needs to be trimmed.

Your ability to stand your ground is limited by how replaceable the administration sees you.

[MPMD]

Not an expert on this but isn't this basically how all fee-for-service practice models work?

I think there are multiple EM groups that work like this.

If they are making up BS about a CMS audit to drop your pay that doesn't give me much faith that they are going to negotiate in good faith, then it all comes down to your negotiating position.

Curious to hear others weigh in but if they are right you might be able to get somewhere by having an attorney talk to them about why the hospital put you in a dangerous position with a fraudulent contract?

[ENT Doc]

"...may not pass the muster if audited by CMS or similar entities. The concern is that I may be tempted to perform unnecessary surgeries..."

Can they site a specific statement or action by CMS or "similar entities" that drove them to have this concern?  Any FFS model or model w/ FFS incentives, profit model, etc. work under the same incentive structure.  Internal audits via a compliance committee should be the standard in your/their institution to address these concerns, however.  You should tell them, "You know you're right! - I do need to work less and do less surgery."  See how they respond to that.

I'd start looking for alternative employment immediately.

[WCInovice]

I’m a sub specialist as well and our group has covered rural hospitals.

This is a classic administrator ploy where they play the “compliance/regulations” card because they think they’re paying you too much. The fact is rural recruitment of specialists is hard and it takes money to recruit.

Like posted above you have to pin them down on their CMS hand waiving concerns. You may also have to hire your own attorney to verify what they’re saying. It may come down to two attorneys disagreeing over the risk here, then you’re in a spot where you just may have to leave .

[q-school]

what was their proposal for new compensation plan?

it is correct to say that fee for service is getting looked at hard.  perhaps the new coo wants to lead from the front and create this new culture.

maybe the board hired the coo with the specific plan to address this concern.

maybe someone just thinks you are getting paid too much.

all CMS hospitals are subject to fair market value analysis for physician compensation.  if your income is out of proportion with your colleagues, that increases risk for audit.

 

[VagabondMD]

q-school wrote:

all CMS hospitals are subject to fair market value analysis for physician compensation.  if your income is out of proportion with your colleagues, that increases risk for audit.

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That's probably it. I was wondering if there might be a Stark issue, depending on how the compensation is modeled. Chances are, there is some legitimacy to the concern (or it would not be raised). Chances are, there is also a reasonable, legal/compliant work around.

[WCInovice]

What the hospital will realize is that market value for a sub specialist is higher than that in a metro area. Of course it can’t be ridiculous though. It may take an attorney - preferably your own and not the hospitals - to assess this risk.

[WCInovice]

As mentioned, there may be some legitimacy to the issue...but unfortunately it can be very hard to tease out legit concerns versus hiding behind "concerns" about compensation in an effort to lower your pay.

As noted, it can be worth while to hire an attorney that specializes in this sort of thing to help tease out legit versus unrealistic concerns.  I've been in situations where this helped, and other times our attorney would say "minimal chance of this being a real CMS issue" and the hospital attorney (likely pressured by admins) will say they disagree with that assessment and then it just comes down to whether you're willing to walk away from their low offer or not.

As noted above, it comes down to fair market analysis.  It's hard to find good data for rural sub specialists...but there's a reason they generally pay much much more - because it's hard to recruit to rural areas.  The hospital may try to use MGMA average data, but that's not applicable to super rural situations.

 

 

[Zaphod]

How far out of whack would it have to be to be a concern though? There are wildly different pays between providers at places and even different categories they use to justify it.

[WCInovice]

Zaphod wrote:

How far out of whack would it have to be to be a concern though? There are wildly different pays between providers at places and even different categories they use to justify it.

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It only matters I guess what CMS would perceive as "out of whack."

I obviously don't know the intimate details of this particular situation, but in my experience this is a classic situation where a new admin or compliance person is hired and goes back over the books and current set up.  Either because they have a legit issue or because they need to show all the other suits in the hospital how important they are and how they're invaluable to the team, they come up with a reason why why they can't pay you $X for your services under their new regime...and mask it in a compliance issue when really it's a financial issue.  I've seen first hand that both of these scenarios happen.

Unfortunately it can be very hard to tease out whether their concerns are really about the hospital's bottom line and masquerading it as a compliance issue or whether it's really a compliance issue.  You will probably  need your own attorney to get a look at it.  It also helps if you have former residents or colleagues that have similar set ups across the country and compare notes.

If you both can agree on a compensation number you want to hit, like has been mentioned above, chances are there is a reasonable way you can get close to that that should be within the letter of the law.

[drfun]

I did think about hiring an attorney but I feel that ultimately it may not make a big difference. I also had a hard time locating an attorney who would have the specific knowledge about this as most attorneys provide contract review .I am not entirely opposed to changing the contract from FFS based specifically on surgeries as their coding / billing department is not up to speed and it has been a headache to deal with .

I need to come up with a counter offer that is commissurate with my previous contract and looking at all different options including the current contract gives me a better idea about what my line in sand should be .

 

Thanks to everybody for their input . I am a a late bloomer in world of contract negotiations and having collective input from this community will be of significant help .

[Sean]

OP wrote:  "I need to come up with a counter offer that is commissurate with my previous contract"...

)  Interesting 'portmanteau' !!  I wonder if this wasn't a Freudian slip, given that you're commiserating about your pay, which you feel should be commensurate with your efforts.

[pulmdoc]

I call BS. Paying a surgical subspecialist a daily rate to be on call for a critical access hospital in a rural location is normal. Fee for service is obviously normal-it's how Medicare compensates physicians. There was no information provided that you are compensated for referrals to the facility which is an obvious no no. The only part which is potentially problematic would be the "50% of charges" which is vague. Is that before or after Medicare adjustments? If before I can see their point that a charge of $5k (you take 50% or $2500) adjusted to $600 is problematic because your pay would be higher than 100% of adjustment. If post-adjustment, of course that is fine.

I would draw a hard line in the sand on the daily rate, especially since it is presumably not your primary location. If they aren't willing to pay you to be available, then don't be available.

[ENT Doc]

BTW, unless they are an ACO with cost reduction sharing going on, or someone like Kaiser who has internalized their payer component, then the organization has several incentives that would look just as concerning.  To name a few:

Push providers to use consultant services in house

Have less primary care doctors and shunt people to the ED for more expensive care

Make specialists salaried but overwork them so they become more of a profit center (ding, ding)

Have patients come in for an appointment to review lab work, radiology, etc.

Hire or retain people who are known overutilizers of care given their patient population