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the hospital or health system’s staff
is providing?
– Are any “excess”
physicians engaged?
2. Confirm that the value or volume of
referrals is not considered as a basis
for compensation.
– The mechanism for payment to the
physician should not fluctuate with
the value or volume of referrals.
– The establishment of the payment
must be based on sound valuation
theory absent any consideration for
the value or volume of referrals.
3. Ensure the transaction or compensation terms are clearly outlined, set in
advance, and agreed upon in writing.
– This process must be consistent
with regulatory guidelines. This
will be critical if an arrangement
was reviewed.
– Engage legal teams that are aware
of this requirement and can help
with documentation.
4. Properly document the supporting
evidence for establishing the compensation is at fair market value:
– The valuation analysis or docu-
mentation for the payment amount
should reflect and match the terms
of the agreement.
– If a third-party appraiser was
engaged to provide the analysis,
they should have appropriate
credentials and a sound methodology reflective of current
regulatory guidance.
– The appropriate party representatives to the arrangement should
review, understand, and verify the
assumptions and value drivers
relied upon in the analysis.
5. Monitor the arrangement to ensure
the services are still necessary and
being performed in accordance with
the agreement terms.
– Ongoing review of the necessity for
the arrangement is crucial to pass
the common sense test.
– Confirming services are actually
rendered, ideally through documentation, will be important if the
arrangement was to be reviewed by
regulatory authorities.
Numerous moving parts to physician
alignment strategies will complicate compliance. That said, these five simple steps are a
solid beginning to ensure your health system
is on the right track.
