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Navigating Medical Staff Officer and

Physician Leadership Compensation

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Overview:• Evolving physician leadership roles• Medical staff leadership positions:

• When to pay• How much to pay• Ways to structure payments

• Other leadership and administrative positions such as committee chairs and members, department chiefs, quality initiatives, and peer review • Why and when to pay• How much to pay • Ways to structure payments

But first, a disclaimer

• MD Ranger doesn’t give legal advice• Physician agreements should always be reviewed by

an attorney (or two)• All matters regarding potential legal/compliance

issues should go to counsel• A formal review and approval process is foundational

to compliance

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About Us

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ABOUT US

250+ Physician Benchmarks• Call coverage rates• Medical direction payments• Administrative and leadership

services rates• Hospital-based service stipends• Diagnostic testing, etc.• Clinic & hourly rates

Online Platform• Benchmark lookups• Contract proposal tools• Contract reports by facility and service• Total facility costs + benchmarks

Compliance Documentation• Contract-specific FMV documentation

reports• Reports to assist with real-time

monitoring and annual reviews

Research and Support• Resources for education and training• On-call experts to help subscribers

use benchmarks and tools

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The foundation of your compliance process

Standardize processes and rates across the

organization

Look up and document physician

rates for FMV

Access 250+ payment

benchmarks

Review contracts

annually and monitor with

ease Have smarter, data-driven physician

negotiationsMitigate

compliance risks with

comprehensivesource of

benchmark data

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Our subscribers

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Our benchmarks• Call Coverage• Medical direction• Administrative• Medical Staff Leadership• Hospital-based services• Diagnostic/other services e.g.

ROP, autopsy, dialysis• Hospital-based stipends• Clinics, professional services• Telemedicine• Residency/teaching/GME

• Uncompensated care• Meeting attendance, peer

review, IT/EHR and quality initiatives

Hospital-characteristics drill down for ADC, bed size, trauma status, urban/rural, stroke centers, and more

Our methodology: key differences

• Providers vs. facilities• Verified data• Thorough data audits• Physician contract experts on-

call to review/advise on challenging contracts

• Comprehensive scope of benchmarks based on full hospital contracting practices

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Extensive education and analysis for subscribersContracting• What You MUST Know About Compensating Call Coverage

(video)• Benchmarking Total Physician Costs (video)• Making Physician Contracting More Efficient (white paper)

Compliance:• Defining, Determining, and Documenting FMV (video)• Stark Law and Physician Contracting (video)• Audit Smart (video)• Four Signs Your Organization Could Have Risky Contracts

(checklist)

Your speaker

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• Ten years experience in healthcare consulting and technology; specializing in physician marketing, recruitment, engagement, compensation, negotiations

• Helps MD Ranger subscribers leverage data, analyze internal costs and structure physician contract compliance programs

Physician Contract Attributes and Components

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PHYSICIAN LEADERSHIP: A BRIEF HISTORY

Growth over time

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Physician leadership roles have grown and proliferated as the delivery system has grown in complexity and the need for coordination has increased

Examples of leadership roles are:

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ü Medical directorsü Medical staff officersü Committee chairs and membersü Non-director administrative positions ü Physician champions

Payments increasing

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Direction and admin total

hospital payments now $1.8M, up 25% from 2014

Leadership position payments

at the 75th percentile grew from $52,630 in

2015 to $60,000 in 2016

Chief of Staff median payments

increased from $36,000 in 2015 to

$48,500 in 2016

Time commitments can be significant

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Healthcare organizations must acknowledge time commitment required – which can run into dozens of hours a month, particularly when an accreditation or merger is happening

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MEDICAL STAFF LEADERSWhen to payHow much to payPayment structures

The role of the medical staff

• Assists with quality oversight, credentialing, accreditation, and operations

• Leaders are chosen by the medical staff

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Payment source is evolving

• Historically, officers often volunteered their time; however, many hospitals now pay at least for the top positions

• A growing number of hospitals are paying, or splitting the cost of stipends with the medical staff, at least for Chief of Staff positions

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Growth in median Chief of Staff annual payments

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

2013 2014 2015 2016

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Factors driving increased payments

Increased demands of physicians in the positions• JAHCO requirements for physician involvement• Technology and quality initiatives• Peer review• Committee and meeting attendance• Board responsibilities

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Factors driving increased payments

• Trend of increased hospital-based medicine

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Factors driving increased payments

• Other economic and market forces, such as:• lower reimbursements, • larger group practices with productivity incentives, • more part-time and employed physicians, and • competing internal governance demands of a practice are

These factors are likely reducing the pool of physicians interested in committing time without reasonable payment for their time.

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Competing priorities for doctors

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More physicians are reluctant to volunteer and run for office if it results in lower revenue and fewer patients, or if duties impinge on either clinical or after-hours activities.

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When to pay

• First: is it reasonable to pay for this position? What is the precedent at your organization? How frequently do other organizations pay for the service?

• There are no hard and fast requirements for payment unless the facility’s Medical Staff Bylaws specify payment.

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Help is hard to find

• If finding volunteers to run for office is a challenge, or if the duties of a position involve a significant time commitment that can reasonably be expected to impact a physician’s clinical practice, payment may be justified.

Adopt a formal policy

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• Define which positions are paid

• Formulate a method for determining payment rates and have the medical staff approve it

• It may not be necessary to pay all medical staff officers

Paying for leadership positions

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Distribution of payment methods

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73%

23%

4%

Calendar (annual, monthly, weekly)HourlyPer Meeting

How to determine payments

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• Use market data• Make contract language as specific as possible• Hours can be difficult to pay due to the nature of this role and

responsibilities• Stipends or annual payments usually make the most sense

Monitor higher payments and riskier contracts

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• Chief of staff• 340 hours• Annual payment: $50,000• Calculated hourly rate: $147

Monitor higher payments and riskier contracts

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• Vice Chief of Staff• 60 hours• Annual payment: $30,000• Calculated hourly rate of $500 is unlikely to be FMV

Comply with regulations

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ü IRSü StarküAnti-Kickback

Hot Topics in Physician Contracting

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OTHER ADMINISTRATIVE POSITIONSWhen to payHow much to payPayment structures

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Non-director positions grow• As health care delivery becomes more complex, more

administrative positions are needed to coordinate care, manage patients, etc.

• Positions that have emerged in recent decades or are new to getting compensated are:• Care/Case Management• EHR Initiatives• IT Directors• Data Management• Quality Initiatives• Peer Review • Physician Champions

How frequently they are paid

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More positions• Many organizations pay one physician for these types

of roles, but some pay more than five

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Paid Administrative Position CountPaid Position Count

Service 1 2 3 4 5+Case/Care Management 75% 17% 0% 0% 8%Committee/Meeting Attendance 32% 21% 5% 16% 26%Peer Review 62% 8% 31% 0% 0%Utilization Management 74% 13% 4% 4% 4%

Deciding when to pay (and how much)

• Specific initiatives or issues such as a medical staff merger, major quality initiative, or EHR implementation may warrant payment to ensure goals are achieved

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Sometimes there are special circumstances

• Hospital size and complexity may also impact the need to pay and the amount

• Academic institutions often pay for resident supervision, mentoring, training, department chiefs, research, etc

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How much to pay?

• Hourly rates remain fairly stable across non-director administrative roles, though there are some exceptions

• Remember: opportunity cost for certain specialties may not be justified in these types of roles, particularly if a physician of any specialty may perform them

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How many hours?

Hours per year can and do vary

For example:• IT/EHR: 240• Case Management: 300• Quality Initiatives: 180

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Payment types & options

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Distribution of Payment Methods

Service Calendar Hourly PerMeeting

Other

Case/Care Management 29% 69% 0% 2%

Committee/Meeting Attendance

31% 53% 15% 1%

IT/EHR 4% 95% 1% 0%

Peer Review 6% 76% 18% 0%

Research and Data Management

12% 61% 26% 1%

Best practices for all physician leadership agreements

• Comply with all federal regulations• Adopt formal policies about when and how to

compensate leaders• Always monitor riskier agreements

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Document, document, document

• Particular circumstances

• Background information

• Demands and scope of the position

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Don’t just sit on less than ideal agreements: do something.

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Ø Do you feel confident in your organization’s physician contracting and FMV documentation process?

Ø Are you confused how much to pay physician leaders for their time?

Ø Do you feel like your organization has risky agreements?

We can help! Reach out: apullins@mdranger.com or 650-692-8873