Private practices are rethinking their approach to changing compensation models
Physician compensation is one of the most regulated parts of the US economy, and physician compensation models are notable for their variation and complexity.
The COVID-19 pandemic has introduced even more complexity, but it has also introduced much-needed flexibility on the part of government and private payers, leading to greater adoption of value-based concepts, the firm’s lawyers said. national attorney Polsinelli in “Cutting edge issues and options when designing and monitoring physician compensation,” an AMA webinar.
These developments “continue to add to the kind of darkness of the physician compensation climate,” Neal D. Shah, an attorney in Polsinelli’s Chicago office, said in an interview with the AMA. But a clear trend emerging from the uncertainty is a shift from purely volume-based fee-for-service to more results- and values-based compensation.
“The most important thing we can say about value-based care is that the federal government is still committed to it,” said Shah, who previously worked for the Centers for Medicare & Medicaid Services. “They’ve rolled out this whole fraud and abuse framework that’s designed to promote value-based care arrangements and with a lot of regulatory flexibility that other entities don’t have.”
Payer policies are also often a major driver of how compensation models are set up, as they reflect the actual revenues paid to private practices and can affect rules for coverage, data collection, documentation, payment. risk adjustment and supervision.
“Private medical practices are reviewing their compensation models and rethinking whether the models they are implementing fully reflect their strategic goals,” Shah said.
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Pandemic-related volatility affected patient volumes and payer mix as many patients lost their jobs, then lost their employer health insurance and enrolled in a government plan.
Payers are increasingly willing to engage in non-fee-for-service payments such as capitation or a value-based model, and payors are increasingly aware of the costs associated with retaining physicians and the wisdom to invest in the prevention of burnout.
“My conversations with physicians continue to indicate some dissatisfaction with payer policies on this front,” Shah said. “Where there have been things like encouraging physicians to engage in self-care and wellness efforts, there are also, unfortunately, lingering concerns about the strategic policies of payers, such as the increasing use of pre-authorization, including algorithmic denials, where they preemptively deny requests without necessarily even having a human watching the claims.
The willingness of payers to pay for services delivered through rapidly adopted telehealth and remote monitoring technology is a welcome development, but the unstable nature of telehealth payment adds volatility.
Medicare payment “is directly dependent on the temporary emergency authorization, which makes it a bit difficult to predict the financial impact of the practice in the long run,” Shah said during the webinar. “It calls into question the ability to take that revenue attributable to telehealth and turn it into a sustainable compensation package.”
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“Chief medical officers are in the best position to design the economics of a compensation relationship that aligns the incentives of their physician employees, ensures that everyone feels they are being treated fairly, and ensures that the practice continues to run well as a business,” Shah told the AMA.
“The lawyer’s role is to ensure that this set of economic objectives complies with applicable law, is properly documented, is within policies and procedures, and is generally defensible if a regulator or market launcher alert targets this compensation methodology,” he added.
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