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Building a Cost-Effective Physician Contracting

Compliance Program Using Market Data

May 28, 2014

Allison Pullins, Director

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Outline:

• Introducing MD Ranger

• Identifying high-quality market data

• Finding the appropriate rates with benchmarks

• Documenting FMV with market data

• Using market data vs. a formal valuation

• Quick tips on integrating market data into your physician

contracting program

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MD Ranger

MD Ranger is a market data company that collects non-employed

physician contract data directly from hospitals. Our unique

approach to capturing all contract data from an organization allows

us to not only determine what to pay, but also when to pay.

We help hospitals analyze their internal physician contracting

costs, negotiate competitive rates with physicians, and document

their FMV and compliance with Stark.

Introducing MD Ranger: A

Breakthrough in Physician Contracting

• Calculates benchmarks from high quality market data for broad

range of physician services

• Uncovers potential compliance risks

• Identifies opportunities for cost reduction

• Includes tools to compare a hospital’s internal data to

benchmarks, tools for budgeting

• Generates contract-specific reports for compliance and FMV

documentation

• Provides a foundational resource for hospitals and health

systems looking for high quality, consistent data to support

physician contracting

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MD Ranger Includes:

• A secure, web-based Data Tool to collect and organize contract

data (uploads via Excel available, too)

• Benchmarks, available as reports and online queries, with

market data for call, medical direction, administrative services,

hospital-based services, uncompensated care programs, and

diagnostic testing services

• Web-based Analytic Tools to benchmark internal data, identify

compliance issues, and analyze where dollars are spent

• Consultations with our experts

Our Benchmarks:

• 80+ administrative services: hours, hourly, and annual rates

• Includes hard to find data on: • Committee and meeting attendance

• Quality initiatives

• EHR and IT initiatives

• Department chairs and section chiefs

• Medical staff officers and leadership

• 50+ positions emergency call coverage

• 10 hospital-based services (pathology, hospitalists, etc.)

• Diagnostic and testing services

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MD Ranger Subscribers

Introducing Allison

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• Director at MD Ranger, Inc

• Background in physician

marketing, recruitment,

engagement, compensation,

negotiations

• Helps MD Ranger subscribers

leverage the data, analyze

internal costs

How to Identify High-Quality

Market Data

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Sample Size

• Big?

• Diverse?

• Provider: physician or

hospital system?

• Look at the distribution

for clues

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Consistent, comprehensive collection

• How is the data collected?

• Is it collected in the same way year after year?

• Does the collection method lend itself to good or poor

data quality?

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Transparent (and exceptional) auditing

process

• Are auditing processes clear?

• Is the data reviewed annually?

• How are the statistics calculated?

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Ability to see specific characteristics

through data slices

• How detailed are the data?

• Are you able to compare your hospital to like

hospitals?

• Are the data slices helpful?

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Specificity of job description

• Ensure the most accurate match

• Small tweaks could affect rates significantly

• Quiz: what’s the better benchmark to use: surgical

specialties OR orthopedic surgery?

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Finding an Appropriate Payment Range

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First, test for commercial

reasonableness

• Must we pay for this service?

• Check market data (MD Ranger publishes “Percent

Paying” tables)

• Determine commercial reasonableness

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Research additional payments, and align

with your organization’s overall physician

compensation strategy

• Does this physician have multiple directorships?

• Does paying for this service fit into your overall physician

compensation strategy? Your budget?

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Determine if the scope of services match the

scope of services described by the

benchmarks

• Is it the exact service and specialty?

• Could it be performed by a physician of any specialty,

or is it specialty specific?

• Are there special circumstances? Is it restricted

coverage? Must the physician be “in-house” during

the shift? These details could impact rates.

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Apply the market data to find an

appropriate payment range

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• What type of agreement is it?

• How complex is the service?

• Use the most applicable data slice.

Consider:

• Size

• Trauma status

• Payer mix

Use the market data to determine FMV

• Taking your organization’s policies into account, find

the most appropriate market range for FMV

• Determine what rates fall into this range

• Select a rate for negotiation

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How to Document FMV with

Market Data

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Create and follow a consistent

documentation process

• Organizations should determine what documentation

process works for them

• Standard reports for documentation

• Executive sign off/oversight

• Record and file proof of compliance

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Suggestions for documentation

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• The report should include: • Service and specialty

• Physician (plus record number, if you use a contract

management system

• Market benchmarks

• Negotiated rate

• Anniversary date

Can I Use Market Data to

Establish FMV?

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Things to consider

• Is there market data available?

• How complex is the agreement?

• Is it a high value agreement (like a hospital-based

service)?

• Are you dealing with exceptional conditions?

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Using Market Data

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Tips for Integrating Market Data into

Your Physician Contracting Program

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Use the most recent, relevant data

possible

• Use at least one data source that is up-to-date (note:

must be at least three months old to publish)

• Consider integrating data from multiple sources, if

robust data is available

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Make sure the sample size is large

• Beware different definitions of “provider”

• More data=better data

• At the same time, compare like with like

• Diversity is important

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Stay consistent

• Use the same data sources yearly for consistency in

your compliance program

• Apply market data benchmarks equally across

contracts

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Keep written record of how a payment

decision was reached, particularly

difficult ones

• Paying for a service not commonly compensated?

Keep detailed records of the negotiation process and

the circumstances that resulted in payment.

• Are you paying above the 75th or the 90th percentile

for a service? Document why a higher than normal

rate was negotiated.

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We want to hear from you!

www.mdranger.com

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Allison Pullins

Director

apullins@mdranger.com

650-692-8873