Blog Post

Beyond the Benchmarks – Data is the Best Defense


Hospitals across the nation are increasingly turning to call coverage compensation arrangements as a means of providing vital medical services and remaining compliant with federal law. While the number and complexity of these agreements have grown, many healthcare organizations are entering into such contracts despite uncertainty that the terms are both legally defensible and financially prudent.

Why is it so important for these agreements to be specific and supported by data?

Healthcare systems are under more pressure and scrutiny than ever before in paying for call. The threat of harsh penalties ranges from large fines to the loss of Medicare status if even a single contract fails to meet complicated and strict governmental regulations. The uncertainty and high stakes involved have prompted the Office of Inspector General to release three opinions on call coverage in the past several years, sending a message to hospitals that the fair market value (FMV) of call coverage services must take into account a broad set of factors that benchmarks alone cannot fully provide. Failure to do so can result in investigation and possibly civil and criminal penalties, even when the transgressions are seemingly minor or unintentional.

Proactive hospital administrators should explore methods to protect themselves as they enter into the business arrangements necessary to continue providing the critical services their communities require. And while most health systems rely on legal counsel in drafting agreements to ensure the documents are appropriately protective and binding to the parties involved, the terms of the contracts themselves demand an additional level of analysis by a qualified expert with an understanding of both regional and national trends. This additional insight helps ensure that payments do not exceed FMV and are commercially reasonable.

Our next post in the series will focus on national median payments and FMV.

If you’d like to know more now, read the full article.