Physician Contracting Services
defining your needs
We facilitate a consensus with each physician group to prioritize the collective’s goals. For example, is a group subsidy most important, is it hours worked, unpaid responsibilities, etc.?
The average physician generates more than $1.5 MILLION in direct or ancillary income for the hospital(s) in which they serve or are affiliated.
The Brake Group provides the guidance, expertise, and the resources necessary to transform each practice, large or small, to be able to meet and exceed their goals even when it first appears that the hospital(s) and physician group have competing priorities. We almost always find common ground, usually around patient care excellence, and we love to help physicians and hospitals accelerate their collective financial and operational success. Many of our clients have reported having better working relationships and communication dialogue after going through these negotiations
REASONS WHY PHYSICIANS GET PAID LESS THAN FAIR MARKET VALUE
Information is power.
Negotiating in a vacuum is almost always the source of an inequitable deal. So is unequal bargaining power. That's where we come in. You've worked hard to become a physician; let us help you advance your earnings and secure your financial future.
Physicians may be reluctant to negotiate their contract for several reasons: they don't have time, they are worried they will appear too concerned about compensation, they don't have a strong understanding of the salary surveys or industry benchmarks needed to leverage fair exchange, etc. The Brake Group advocates and supports Physicians, recognizing their role – not only in healing humanity but also in generating business. While physicians create jobs for their staff, they enable patients to access quality healthcare - not just with them but through a vast network of specialty providers.
Moreover, we’ve found many physicians don’t feel confident in negotiating on behalf of their group or they don’t have time to conduct a full due-diligence assessment to aid in their negotiations.
Often, the other party (hospital) has an attorney that drafts the contract to overwhelmingly benefit them. Allowing an expert to negotiate the contract details (which often includes negotiating around some pressure points) removes you from any potential back-and-forth that could get contentious. You don't want to forgo negotiating on the right terms simply because it may cause some strain on the relationship. It's important that you start with an unbiased contract and negotiate to achieve an equitable outcome.
Benchmarking
95% of our physician group clients have us do our proprietary benchmarking analysis using gold standard data to set the stage for objective data-driven negotiations. We break down your group’s current compensation and productivity and benchmark it against other physicians with your experience, specialty, health system, and geography, considering the payment models and metrics used to measure all your professional metrics; using customized benchmarking and key indicators as a catalyst to demonstrate value and leverage data for accelerated outcomes.
Hospital Service Agreements
We have extensive experience with negotiating Professional Service Agreements, MSOs Agreements, physician specialty contracts (Anesthesiology contracts), etc. Each contract (and contract negotiation) creates a strong foundation that builds year after year on each other in addition to what is initially negotiated. Over the course of a career, this could amount to thousands or hundreds of thousands of dollars, which directly impacts when a Physician may retire, their overall financial health, and their work-life balance.
Income Guarantees
Income Guarantees are important because:
· Financial Stability: They provide financial security, especially when physicians are transitioning to new practices or starting in a new location. This stability allows them to focus on patient care without the stress of financial uncertainties.
· Attracting Talent: Competitive income guarantees can attract highly skilled physicians to join a practice or hospital, especially in underserved or rural areas where recruitment might be challenging.
· Practice Growth: Guarantees can support the initial phase of practice growth, covering expenses until the physician builds a stable patient base and the practice becomes self-sustaining.
· Reducing Turnover: Offering income guarantees can improve job satisfaction and retention, reducing the turnover rates which can be costly and disruptive to healthcare facilities.
· Work-Life Balance: With assured income, physicians can maintain a better work-life balance, avoiding the pressure to overwork to meet financial needs, which can lead to burnout.
· Community Health: In areas with high healthcare demand and limited medical resources, income guarantees ensure that physicians can afford to serve these communities without financial detriment, thereby improving overall community health.
· Investment in Quality Care: Financial assurances enable physicians to invest in quality care, such as continuing education, technology, and patient-centered services, without worrying about immediate financial returns.
revenue guarantees, Stipends & subsidies
Revenue Guarantees are important for all of the reasons outlined above, but additionally, Physicians are more likely to invest in practice improvements, such as advanced technology, staff training, and patient services, when they have a guaranteed revenue stream, ultimately benefiting patient care and practice growth.
Physician stipends can come in various forms, each designed to address specific needs or objectives within a healthcare practice or system. Here are some examples of physician stipends:
· On-Call Stipends: Compensation for physicians who are available to handle emergencies or provide care outside regular hours.
· Administrative Stipends: Compensation for physicians who take on additional administrative roles or responsibilities, such as department chairs or medical directors.
· Teaching Stipends
· Recruitment and Retention Stipends
· Relocation Stipends
· Sign-On Bonuses
· Quality Incentive Stipends
· Professional Development Stipends
· Research Stipends
· Hardship Stipends
· Payor Mix Stipends: to help offset services provided in areas where the payor mix doesn’t meet average indicators for certain services (E.G. areas with a high uninsured rate).
These stipends are tailored to meet various needs, from addressing the demands of on-call duties to supporting professional growth and ensuring the recruitment and retention of talented physicians.
Reimbursement Optimization
Physician productivity pay models are designed to align compensation with the volume and efficiency of services provided by physicians. Where a physician group may have maximized base salary, it is often advantageous to look at other types of productivity in addition to base pay. Here are some common types of physician productivity pay that can be combined or as an alternative to straight base pay:
· Relative Value Unit (RVU)-Based Compensation: Compensation is based on the RVUs assigned to each service, which reflect the time, skill, and intensity required.
· Capitation: Physicians are paid a set amount per patient enrolled in their care, regardless of how many services the patient uses.
· Percentage of Collections: Physicians earn a percentage of the revenue collected from the services they provide.
· Production-Based Pay: No base pay, straight production pay may result in higher overall income.
· Quality and Efficiency Incentives Pay: A physician earns a bonus for achieving high patient satisfaction scores or for managing chronic diseases effectively.
· Shared Savings Programs: A group of physicians earns a percentage of the savings from reduced hospital readmissions and efficient use of resources.
· Bundled Payments: Physicians are paid a single, comprehensive payment for all services related to a specific treatment or episode of care.
· Hybrid Models: Combines elements of various compensation models to balance productivity, quality, and patient outcomes.
· Panel Size Payments: For example, a physician receives additional pay for every 100 patients added to their care panel, encouraging the management of a larger patient base.
· Case Rate or Episode-Based Pay: Physicians are paid a flat rate for managing a specific type of case or episode of care such as diabetes care.
These models can be used individually or in combination to create a compensation package that incentivizes productivity while ensuring high-quality patient care and efficient use of resources.
efficient Service Delivery
One example includes evaluating whether unpaid staffing requirements are customary and reasonable (e.g., anesthesiologists having to staff Operating Rooms that go unutilized or underutilized). If they aren’t, we provide reimbursement options to offset the cost
Comparative Analysis
We compare what other specialty groups are being paid, including at what percentile of the data benchmarking tools (e.g. if we’re advocating for a radiology group that objectively is performing at the 75%ile but other hospital based groups such as anesthesiologists are being paid at the 85%ile is there a case to be made to increase pay?).
Pay Equity
We also analyze what percentile hospital administrators are being paid at? If they’re at the 90%ile, does our physician group also deserve to be paid accordingly?
Non-Compete Agreements
Generally, non-compete agreements are considered to be a largely unenforceable restraint on trade, except where such a non-compete is necessary in order for the entity to retain patients and staff and they are not well-thought of in the judicial system. Most recently the FTC implemented a ban on Non-Compete Agreements, which is currently being challenged with the potential for an injunction to prohibit it from going into effect. Please review our Blog on the topic. If required, we can draft alternate language to protect your rights and future ability to grow outside of your current agreement.
EMPLOYMENT AGREEMENTS AND 1099 INDEPENDENT CONTRACTOR AGREEMENTS
50% of Physicians leave their first practice within 2 years. This can be hugely disruptive to these physicians, their families, colleagues, patients, and hospital. Negotiating the right terms from the beginning can eliminate the need to leave or start over again elsewhere.
A poorly negotiated contract can impact your life in unexpected ways. For example, you may take an offer and move to a location only to find out that the call coverage shifts to a burdensome (1 in 3) requirement. This can interfere with your practice hours. Or, you may take a poorly negotiated position that becomes untenable after a year or two. Both examples may result in you having to move at a time when it is not convenient for your family. This could also result in repayment obligations for sign-on bonuses or income guarantee losses while setting up your practice.
It is crucial that an Employment Agreement or Partnership Agreement specify whether the new physician will be expected to take all new patients, including Medicaid. Your ability to generate a competitive income will depend in large part on this one factor. It may even be enough that your revenue-generated numbers could delay your partnership track if they are too low.
Furthermore, this preserves your ability to come into the job with a fresh and positive working relationship and a clean start with your colleagues. The same applies to renegotiations; it is exponentially beneficial to have a third-party advocate from outside your practice to help you navigate the details with colleagues with whom you want to maintain a good working relationship on a day-to-day basis.