Thanks For The Check. What’s It For? Are You Paying Medical Directors That Don’t Know They’re Medical Directors?

Working with all sizes of hospitals and their physician partners at Ludi, I see a lot of interesting things. Once, I met a Chief Medical Officer that carried around his physician agreements in a folder that had an orange stain on it. The stain was reminiscent of cheese puffs, but who am I to judge?

I asked, “Hey what’s that folder about?” He responded, “I can’t remember what contract I am logging against, so I just carry them with me.” He was the Medical Director for an OB unit, had an on call agreement, and was president of the employed physician group. This is normal in a hospital system where one or several individuals are tapped to lead (the same poor suckers over and over again.) That paycheck is messy. Who’s tracking the hours, the units, when it’s paid, when the stipend runs out? Do you think it’s your physician partner, given their load of STUFF?

 Calling all CFOs, revenue cycle leaders, and physician compensation specialists…When was the last time you sat down with your physician partners and walked them through the deal? At Ludi, we work with thousands of physicians and their assigned contracts with their hospital partners. The whole ball of wax takes an army of folks to handle and is fraught with issues.

Let’s Start with the Basics

Does your physician partner know how they are paid and what they are paid to do in terms of work and expectations? This brings everyone to their knees and I can stop the music now. Physicians are clinicians and medical service leaders. Their days are overflowing with STUFF. Understanding that a compensation model, with its bells, whistles, and the “tucked in” Medical Directorship shoved in the back of their contract, may never hit their radar without a conversation. Sound crazy? It’s pretty normal here in healthcare land.

Hospitals have created physician compensation departments, as employment of physicians is a valid strategy for both parties. Compensation models are varied, can have many layers with requirements for patients seen in a day, quality scores, and patient feedback. Hospitals also need a physician partner to lead clinical endeavors such as a birthing center. This type of paid leadership is known as a physician administrative agreement and many physicians may know they get paid for this, but the details of the role fall away.

And Now the Details

Crack open that physician contract, review it within the hospital physician compensation team. Ask some basic questions, as this tends to catch issues. Is this what we meant? Does the math work? What’s the fair market value (FMV)? Do we have an audit trail? Is this the same group we want to partner with around this initiative? After all of the health system’s chores around this contract are complete, (passes all the sniff tests and standardization of templates are created, and more importantly, followed), sit down with your physician partner and walk through every line. It will pay off in terms of face time, trust, and transparency. It’s a good business practice that everyone mentioned on the paper understands exactly how the paper works.


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