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Physician Payment Automation: 3 Steps to Evaluate Your Hospital’s Options

As we move into 2024, a critical focus for hospitals will be to cut costs, increase operational efficiencies and improve physician satisfaction. One way for hospitals to achieve this is by simplifying physician payment processes, which are often manually taxing, time-consuming, and come with both financial and compliance risk. 

Even in a recent survey from Deloitte of health system executives and clinicians, participants said organizations should “invest in technology to give time back to workers.” The fact is tools that can save providers hours out of their weeks should be a no-brainer in today’s climate. And for those that manage physician payments, that means going beyond an Excel spreadsheet and leveraging automation. When used effectively, physician payment automation can speed up calculations and operationalize your current spreadsheets, while also providing a holistic view of every provider you’re paying, how much you’re spending and opportunities to eliminate unnecessary costs. 

But for hospitals, where do you even begin when it comes to a physician payment automation? What’s right for your organization based on your specific needs? And how do you properly evaluate your options? 

Here’s my advice, based on a new guide we put together for hospitals.

Step 1: Bring Together Key Internal Stakeholders

Like any software purchase, physician payment automation purchases can get derailed if you don’t have the right people involved in the process. But unlike many other software purchases that are clearly owned by one single group, physician payments tend to be fragmented across different departments. For example, different people may be managing employed contracts vs. independent, and different people may own wRVUs vs. medical director payments. Physician payment processes are usually siloed across multiple departments, including physician comp, finance, medical teams, compliance, legal and other departments. Therefore, it’s important to understand the unique needs, goals and responsibilities of each department that is involved. It’s also important to make sure you get the feedback from people on the ground who are close to the payment processes and understand where the real pain points are. Three key questions to ask each group are: 

Step 2: Secure Executive Sponsorship

Like any project, no clear leader and too many “cooks in the kitchen” can prevent your organization from moving forward with physician payment automation. After you identify the requirements of each group, you need a dedicated project manager and executive sponsor who has budget authority and will own the project going forward. Making sure this person is armed with the business case and ROI of a physician payment automation system is a critical step that increases the likelihood in your organization adopting a solution. It’s important to highlight that without streamlining physician payment processes, a hospital opens itself up to potential compliance risk (Stark Law, etc.) and wasteful spending on unneeded services and administrative burden. And with staffing challenges, it is a key component of helping remove burdens and prevent gaps as staff transitions in key finance roles.

Step 3: Plan for a Successful Rollout

Once you have your organization in alignment on the need for automated physician payments, it’s important to craft the right strategy for rolling out this technology. Here are a few best practices which can increase your likelihood of a successful rollout: 

Start small and do not try to do everything at once.

Start with one specific payment type, group or hospital first.

Identify leaders in your organization who will be project champions

and help ease buy-in for later groups as you seek to expand across your organization.

Start with your highest risk payments.

Identify the types of payments that are most manual and have the biggest administrative burden on your team, and start with those. Where is your team still using paper? Where are they manually hardcoding spreadsheets? Where do you have the least visibility from a payment standpoint? What is the heaviest burden on your physicians? Where are staff spending time reworking paper?

Make sure your contracts are ready for automation.

The last thing you want to do if you are moving to an automated system is to go through a big implementation project, only to have to redo it because a month after you “go live,” you change all your comp plans. If your organization is going through major redesign on specific types of contracts, it probably doesn’t make sense to include those in your initial roll-out.

Once you’ve begun these steps, you’re well on your way to having a successful implementation! I also have tips on evaluating and selecting vendors – the final step in all of this – should you choose to partner externally. You can check that out and much more on this topic in my team’s  Physician Payment Automation Buyer’s Guide.

At the end of the day, implementing a physician payment software solution that has the hospital’s needs in mind can ensure three critical things: all physician arrangements are paid properly, administrative burden on staff is reduced and compliance safeguards are enhanced. Ultimately, this can result in generating 5 – 6x ROI on a hospital’s initial investment. That’s a win-win for everyone. Good luck! 

This blog post originally appeared on the American Association of Provider Compensation Professionals (AAPCP) website.

Learn more about this topic by checking out our Physician Payment Automation Buyer's Guide.

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