Contract Negotiation Provisions

Contract negotiation may not be easy.   Hopefully, this information will help you during the contract negotiation process.  What I plan to cover will be a little about basic negotiation information and then information pertinent to the items of a doctor contract that may be negotiable such as the compensation, responsibilities and benefits.

Contract negotiation is something to prepare for.  It is something to practice.  Don’t feel alone if you have anxiety about contract negotiation, here is one doctor’s comment about negotiation, “The most intimidating thing I did during my residency and fellowship training had nothing to do with patient care.  It was negotiating my first employment contract” wrote a physician

“Good agreements establish good relationships.” According to Mr. Nicastro, a healthcare attorney.  It also “provides a blueprint for a rational separation”.  The point of reviewing a contract is to make sure it contains everything you were promised verbally. Make sure it satisfies all your expectations and that it prevents any surprises from happening down the line so you can be sure to know what’s expected of you.

You need to plan your contract negotiation. What are your negotiations goals?  What must you have and what are you willing to concede? “If you don’t know where you are going, you will probably end up somewhere else.” According to Lawrence Peter, which is why preparation is so important.

Start being contract negotiation-conscious.  Practice it when the opportunity presents itself in life.  Negotiation consciousness describes a willingness to be assertive and challenge items presented to you.

Per the President of the CA PMR Society who is a physiatrist and a lawyer, your first contract is your most important because it sets the base of your compensation so the higher it is, the higher hopefully it will be at the end of your career.  By the time you’re negotiating your second contract, you probably have a wife/husband, kids, a mortgage, a car, etc. and can’t negotiate as well.  He also said to know your goals whether it’s to serve the patient community, make money, etc. and that you can’t get it all

Most physicians require at least 4 practice contract negotiation simulations to get up to speed.

Things to Remember When Preparing for Your Contract Negotiation

Look at the contract discussion from the employer’s perspective.  Ask yourself “How can I help this employer feel satisfied with the contract?”  Per a SC physiatrist, understand that you may be negotiating with an administrator, not a doctor, someone who is business-minded and used to negotiating

Compensation can be a straight salary, salary plus incentive or RVU’s.  If the compensation is based on salary minus expenses, find out what the expenses are? Do they include new ventures of certain physicians in the practice or an above average rent price?  The incentive is usually based on productivity.

In regard to RVU’s, the Medical Group Management Association has RVU benchmarks.  The RVU is based on practice ownership, group type, geographic region, demographics, number of partners and call responsibilities.  If someone had the job before you, you can ask the employer the RVU.  You should know how much the payors pay for each time you see a patient and any service is provided.

The sad fact is that any attempt to calculate your income will never give you the exact amount.  Each employer uses a unique and quite complicated mix of base salary, productivity, patient satisfaction and quality benchmarks.

Is the salary you’re being offered competitive?  Check it against the AAPMR Salary Survey figures, ask your peers and compare it to the Medical Group Management Association figures.

Is the compensation based on your collections or are the doctor’s collections divided evenly, even if you see more patients? See how your income may be affected when you take Paid Time Off.  The base amount may be hard to change in ensuing contracts.

You may want to make sure the base salary is guaranteed for as long as possible without adjustment.  Contracts that are heavily production- or collections-based are not always a good idea for new physicians because it can take time to build up a practice.  The salary could be generous but then after the first-year guarantee, the productivity basis might not be.

You should get specifics on all the activities and metrics regarding compensation e.g. productivity, quality, cost.  Obtain an understanding of how your compensation data will be collected and submitted.

Higher pay may mean more work such as extra calls, rounding in the hospital or driving to remote locations. Understand that driving time will take away from your productivity.  If the contract doesn’t include these items, you may use these items to get more pay.  Read the fine print of the contract regarding your responsibilities before the contract negotiation.

Regarding a sign-on bonus, ask for it.  But be aware that you might have to repay if you leave early. The same applies to moving expenses and student loans.

In terms of benefits, the basic benefits are:  CME ($1,500 – $2,500/year), health insurance, malpractice, 3 weeks vacation, license fees and medical staff dues.  Additional benefits can be life insurance, professional dues, relocation (typical $5,000).  Comprehensive benefits include car allowance, sick leave, journal subscriptions, dental insurance, profit sharing, parking, flextime and loans.  More employers are combining vacation, CME time and sick leave into a “paid time off (PTO)” concept.  Find out when the benefits start.

When considering the Responsibilities section of the doctor contract, do not agree to language that says call requires you to “reside locally as per the current and past policies of the practice”.  This language is too vague.  Do not agree to language that says the “New physician will share work and call duties with the employees of the company.”  Again, this language is too vague and would be better revised to say “the physician will be on call one weekend per month.”  Do not agree to language that says “full-time work” or “ the employer will decide the call arrangements.”

The contract should spell out: patient appointment hours, hospital rounds, office duties, review of blood work and lab results, telephone calls, medical record documentation, availability of nurses and support staff, coverage, CME requirements, the number of hours you have to work, the number of patients you have to see, weekend and holiday work.

Find out how the patients will be assigned?  You don’t want to do all the work while the partners reap the financial benefits.  Check the work responsibilities and hours.  Who will your patients be?  How will patients be assigned?  They shouldn’t be assigned based on payor type with you handling all the uninsured or underinsured patients particularly if you will be paid based on collections.

What staff resources will be provided?  Will you have sufficient resources to assure your success of the responsibilities and hence the compensation?

Don’t focus too heavily on the base and gloss over the details of how the incentive works.  Is it attainable?  It may be set too high.  Watch out for contract provisions that include the ability of the compensation committee to cancel or prospectively revise the incentive plan or the need for the office to “break even” before the plan takes effect.  Find out the precise calculation of the physician incentive and the definition of key terms like positive net income, negative variance, percentage and gross revenue.

It’s better to have the bonus based on gross income rather than on net income, as net income is more subjective and easier for business owners to manipulate.  If they say that everyone gets an incentive, then great, suggest that they just make it a guaranteed incentive in the contract.

Always go into a contract negotiation assuming you won’t get your productivity bonus.  Make sure your base salary by itself is adequate for your needs.  You don’t want to hear these words at the end of the first contract year, “Sorry you must have misunderstood how the productivity bonus worked.”

You may not worry about the restrictive covenant/non-compete clause because at the start you have no intention of competing with your employer but it ultimately may be important.  The general consensus is that these clauses are unenforceable, but you will have legal fees to fight them.  NY and NJ have strict limits on their use.  Pay attention to the length of the term.  The geographic limitation depends on the area.  The area will be larger in rural areas.  Suburban areas may have fairly large non-compete areas as the territory considered may be a several mile radii from each of the hospitals you work.  If a non-compete clause is more than 10 miles that might be an issue.

There may be contract provisions for an exception to the non-compete provision such as for teaching or working for an insurance company.

You may be able to negotiate the radius or reduce its length of time.  Even if the employer drops the restrictive covenant, he/she may make it hard for you to leave by forcing you to pay your own tail or return your signing bonus or moving stipend.  The bottom line is to consider whether you can live with the restrictions.

It’s easy to get swept up in the excitement of a lucrative contract with a great bunch of people and not consider what happens when the contract is terminated.  Sometimes things don’t work out and knowing what happens gives you options.  If something does happen, always try to leave on the best possible terms.

Employers can terminate you for any cause.  Pay attention to the definitions section.  Perhaps the contract will say that you “may be terminated for professional misconduct” See how professional misconduct is defined.  What events trigger a termination? Is it 90-day notice by the employer or by either party?  Can you be terminated for any event the employer deems to be detrimental such as suspension of privileges, including license suspension or “material” breach of contract?  The contract may say you could be fired for any behavior “contrary to the best interest” of the organization.  Be aware whether the termination of an employment agreement also terminates your privileges at the hospital.  Per a TX physiatrist who took a job with a spine surgeon out of residency and thought it was a good offer, only to find out if he left early that he would owe the doctor $50,000

Additional income may come from the following items:  honoraria for lecturing, royalties for writing articles, consulting work, testifying as an expert witness, inventions, patents, copyrightable works, discoveries or other intellectual property.

Regarding the code of conduct and conflict of interest contract provisions, ensure that the definitions and standards in these policies aren’t so loose that they could be abused by a supervisor who really wants to get rid of you because they don’t like you.  Don’t inadvertently breach your contract by engaging in potentially competitive activities.

Definitions of malpractice terms for Contract Negotiation

Occurrence policy– This is the best because it covers you regardless of when the patient sues, during or after your term of employment.

Claims made policy– With this malpractice coverage if an incident occurs while you were working at the employer, but the suit is filed after you leave, it won’t be covered by the employer’s policy.  It is the most typical type of insurance.

Tail coverage– This can be very expensive to buy individually,  upwards of $10,000 – $55,000.  Negotiate it such that your employer pays it if they fire you, but you pay for it if you quit. Or you could compromise and offer to pay two-thirds of the tail in the first year with your employer paying two-thirds in the second year and the full premium in the third year and beyond.  A doctor told me, the most economical way rather than purchasing a tail is to make your coverage with the new job retroactive to the last date of your current work.

Need to Know Aspects of Term of the Contract for Negotiation

Regarding the term of the contract, find out if it is renewable and by whom is it renewable?  What are the terms of renewing?  Is it self-renewing?  Is it renewal by mutual agreement or by the employer based on their choice?  Is there automatic renewal without your consent? Will the contract expire in the event of a buyout of the practice?

Understanding Partnership in Your Contract Provisions

Regarding partnership, some practices can deliberately make it hard to reach partner level.  Many contracts don’t spell out partnership terms.  A partnership usually means buying into the practice.  The amount you pay should cover fixed assets, such as real estate and equipment, but not soft assets, such as goodwill, like the estimated value of the patient panel.  The amount you pay should be based on outside financial analysis.

In conclusion, Prepare, prepare, prepare for contract negotiation.  Practice negotiation skills.  Success is an attitude so feel confident and positive while negotiating.  There are many items of the contract that can be negotiated such as the compensation, incentive, benefits, responsibilities.  Other items may be standard contract language not able to be negotiated such as the restrictive covenant, termination, additional income terms and the code of conduct.  Be aware of the language for the malpractice, term of the contract and partnership.  Best wishes to a successful contract negotiation!

Physiatry Billing – No Magic Bullet

What is a magical way to improve your billing and collection function? Unfortunately, there is none – no hidden secret, no “silver bullet.” However, adherence to several fundamentals will work just as well.

How to maximize upfront billings:

Capture all performed services! For outpatient services, medical offices usually employ a pre-printed superbill which can easily be misplaced. Suggestion: Match each patient on the appointment schedule to a corresponding superbill.

For each patient admitted to a rehab facility, there is usually an initial charge, regular followups, and ultimately a discharge code. Suggestion: Any gap in inpatient billings should be brought to the provider’s attention.

Simple data entry errors can cost the practice thousands of dollars. Suggestion: Have a second person, not the data entry person, check all data entry.

How to maximize collections:

Followup, followup, followup!

Pursue vigorously by telephone or in writing all insurance denials, and non-responses. Many billing personnel find calling insurance companies to be stressful and time-consuming, when in reality they are usually helpful in resolving problem claims. TELEPHONE FOLLOWUP IS A KEY COMPONENT OF THE COLLECTION FUNCTION. Suggestions: When calling the insurance carrier to reprocess the denied claim, get a reference number. When calling about a claim with no response, try to fax the claim.

If a telephone call cannot resolve the denied claim, then a written appeal should be sent. Suggestion: Design a preprinted Appeal Form which can be filled in with the necessary information.

Sometimes, the patient’s insurance information is incorrect. Although it is very easy to simply send a bill to the patient, it is not the most effective way. You have a better chance of collecting money from the insurance company than from the patient. Suggestion: Research thoroughly the insurance problem by calling the patient, and by calling the insurance company. Billing the patient should be the last resort.

As has been demonstrated, billings can be maximized by capturing all services performed.

Bruno Stillo,CPA is the owner of Physiatry Billing Specialists, 800-835-4482, [email protected]

Who Owns the Practice?

The answer to this question will guide your practice life with any group.   For several years, while managing physician relations for a local hospital, I recruited physicians for the hospital and affiliated medical practices.   It game me an opportunity to view physician recruitment from both sides of the contracts negotiated.   I think it beneficial to share some of my experiences and personal insights from those times.   I once tried to recruit a physician who was moving back to her hometown.   In the world of physician recruitment, we might call this “a perfect geographic match.”   Ironically, she chose to sign-on with a local group rather than the hospital I was recruiting for because she said she wanted to go into “private practice” which seemed to represent an idealized practice autonomy.   I asked her who owned the practice group.   She didn’t know.

*Private practice refers to a privately-owned practice, especially one operating under s system of free enterprise or laissez-faire captalism.   It describes a physician-owned practice, one that is not owned by an entity such as a hospital, and it is broadly used today to refer to solo and/or partnership practices of varying structures.   Unless you hold some level of practice ownership, you are an employee and you need to identify your employers before you sign a contractual agreement.

*       Identify the group’s short-term and long-term goals.   This will help you decide if your goals match the goals of the group.   If you want a busy outpatient practice then you must step in to fill a vacancy in a busy, established practice or your must build it. How will the group help you to do that?

I brought in one physiatrist who interviewed with the hospital CEO and administrators to consider an opportunity to either take over an established hospital-based and staff-supported inpatient/outpatient practice or to become a hospital employee with benefits.   Benefits were the dealmaker, but at dinner the CEO offered an unplanned glimpse into the practice environment when he asked the physician her thoughts about his idea to restructure the inpatient unit.   It was a very astute physician who later told me that the CEO wasn’t really asking for an opinion;he was simply trying to determine if she would buck him.

*       You are primed to be an employee in a system when you can identify and happily live within an organizational structure that neither seeks nor desires your input.

I met with a physician who had just given notice to his group that he was leaving.   He was extremely frustrated and had no alternative practice plan in place.   Two years earlier he had signed a contract to join that group with the understanding that he would be offered a partnership.   Time passed with minimal partnership discussion and he became so disgruntled that he finally made the decision to leave.   As I spoke with him, it became clear that the particulars of that partnership had never been provided.

*       A well-organized group will provide you with key information even before you ask.   A group that is not organized will barely be able to respond to your questions.   All groups fall somewhere along that continuum and you will want to gauge the level of the group’s organization since it will play a major role in your practice satisfaction.

Most physicians have a primary desire to practice medicine.   Most would choose to forego the cumbersome paperwork and the persistence required to advocate for the patient when arguing with insurers.   One physiatrist told me of the time spent in justifying the need for a wheelchair for a quadriplegic patient.

One physiatrist expressed an interest in building a part-time practice performing only EMGs. That physician was obviously well-informed about medical billing and he desired to build a practice with only high-level billable codes. If you entered into practice with this physiatrist on production-based compensation, what type of practice could you expect to build and how much money might you earn monthly?

    • Determine the primary needs of the patient population in the practice area.

As an employee, you will receive financial compensation based on a salary guarantee, production, or a combination of both. A salary guarantee is an amount you can bank on, literally, and it may be a great way to start up your practice. However, no group will want to continue to pay you more   than you earn. It just isn’t good business. That means it is expected that your gross charges will increase as you build your practice. Your earning potential will typically be tied to the revenue you generate (production-based) for your group and this is an important point to consider as you begin your contract negotiations.

  • Production is typically not the best option for a start-up practice for several reasons. It takes an investment of time and money to build a practice and this may be one of the most underestimated aspects of medical practice start-up.
Retirement benefits within a group practice may exceed those available in hospital-owned practices, a notable advantage. Group practices tend to invest the maximum allowable amount, $30,000 annually, into each retirement plan for each physician in the group. In some groups that money is self-directed so each physician can elect his or her own investment options independently of the group. Hospitals, however, have a different set of governmental guidelines as not-for-profit or for-profit entities, and are thereby limited in the amount that they can invest in the retirement plan for their employed physicians. In addition, there may be limited investment options for physicians in those plans. This is an important point to include in physician compensation when comparing practice opportunities and negotiating salary compensation.

By Kathy Jeffries, MyraPhyx A Physician Resource Group, [email protected], 573-680-3105

National Provider Identifier

NPI, stands for national provider identifier.   CMS initiated this reform to simplify filing claims.   The rest of the carriers are being forced to follow suit.   The NPI will replace all numbers that you were previously using to file claims, i.e., your Medicare numbers, BC/BS numbers, etc.
The website NPPES (https://nppes.cms.hhs.gov?NPPES/Welcome.do) is where you go to create your login and password, and get your NPI number(s) issued.   If you enter your information incorrectly, you will get denied on every claim you submit.   The NPPES site has to match what your local intermediary has on file for you.   Your clearinghouse has to match everything in their electronic file to send to the local intermediary.
Article contributed by Ken Lee, PRS, Inc., a physiatry practice management company to include billing services, [email protected], 1-800-324-4777

Will Physiatry Employers Negotiate?

Yes, most physiatry employers will negotiate.  That’s the obvious answer; everything is negotiable!  Some items you can negotiate are the start date, some aspects of the work schedule and fringe benefits.

Some contract provisions are non-negotiable as all the doctors in the practice/hospital abide by these same provisions and it would be unfair to them and the practice/hospital to bend them just for you.  These may include the productivity incentives and issues about termination.

Please note that some large organizations have standard contracts and will not negotiate.

Checklist for Preparing to Negotiate a Physiatry Doctor Agreement

PHYSIATRY CONTRACT NEGOTIATION

o Practice negotiation in daily life and for your contract negotiation
o Consider the contract terms from the employer’s perspective
o Set targets/goals for what would be the features of the best negotiation outcome (salary, benefits, etc.), the features of your
expected negotiation and the features of the least acceptable negotiation outcome
o Make a list of the strong points of you for the position
o ID how much risk you’re willing to take in the negotiation
o Do you have something special to offer, e.g. a business background, moonlighting, marketing activities?
o Is the compensation competitive?
o What is the compensation and incentive based on, e.g. productivity, quality, cost, etc.?
o How will the compensation data be collected and submitted?
o Does the sign-on bonus have pay-back requirements?
o When do the benefits (health insurance, etc.) start?
o What is the call schedule?
o Is there a basis e.g. payor for what patients you will see?
o What if any resources (PA, tech, etc.) will I be provided?
o Is the incentive attainable?
o Is there a restrictive covenant and, if so, what is its length, geographic limitation, etc.?
o What are the terms of terminating the contract?
o What type of malpractice will be provided?
o What is the contract term? Is it renewable? By whom is it renewable?

Burn-out among physiatrists high

A recent slideshow on MedScape says that burn-out is a major issue for physicians.  44% of physicians report burn-out.  Believe it or not, physiatry is the third highest specialty reporting burn-out.  It is only preceded by urology and neurology.

For more information, visit https://www.medscape.com/slideshow/2019-lifestyle-burnout-depression-6011056#4

Action needed by 12/31/18 – MIPS Reporting for Physiatrists Working in Free-Standing Facilities

As part of MIPS reporting,  providers are required to report under the “Promoting Interoperability” category (formerly known as Advancing Care which was formerly known as EHR(Electronic Health Records)). For most hospital-based providers, whose practice is in a free-standing rehab facility (such as Healthsouth), there is no capability of using an EMR system which satisfies CMS’ physician requirements – Healthsouth’s system does not meet physician reporting requirements.

In order to avoid losing 25% of points in the MIPS Scoring system, these providers can submit a very simple Hardship Exception indicating “Lack of Control over the availability of CEHRT.” If approved, the application will move the 25% scoring from “Promoting Interoperability” to “Quality,” thus avoiding a loss of 25% scoring in the MIPS program.
The Promoting Interoperability Hardship Exception application can be found at:
https://cmsqualitysupport.service-now.com/exception_application.do
The deadline is December 31, 2018, so there is still time to submit this simple application.

This information has been provided by Bruno Stillo, CPA, MBA, President, Physiatry Billing Specialists, 800-835-4482,
www.physiatrymedicalbilling.com
[email protected]

What to Expect in a Physiatry Contract

Physiatry contracts may have many provisions such as the:

  • Term of the agreement
  • Termination terms – the number of days for notification of termination
  • Duties
  • compensation terms and how collection will occur
  • Benefits
  • Exclusive Employment, non-competition, restrictive covenant
  • Powers of the Hiring Entity
  • Relationship Between you and the hiring entity
  • Assignment terms
  • Amendments-how they’re handled
  • Confidentiality and medical records
  • Professional Policies and Procedures
  • Requirement to have hospital privileges
  • Admissions decisions

Physiatry Interview Questions That Reveal What Type of Person Will Get the Job

There are so many questions  that you can ask during your physiatry job interview.  Some of these questions can be found on my website under the Practice Search Tips tab.  However, some of the most important questions are those that you ask that are ultimately about how well you fit the job and the job fits you.

During the interview you certainly want to be keen to listen to what is being said by the interviewer(s).  However, you also want to use the interview to get the information that you want that isn’t being said.  Of course, this requires preparation on your part.

Some of the information you want to obtain is about the nuts and bolts of the job.  However, as much if not more important than the nuts and the bolts of the job are the subjective aspects of the job such as the type of person that the interviewer thinks will best fit it.  The personality nature of the position is equal to and almost more important than the job itself.

Some potential questions to ask about the subjective nature of the job are:

  1. What personal qualities are you seeking for in this position?
  2. What type of person will best be able to fulfill the job responsibilities?
  3. As you’ve come to learn more about me during this interview, is there anything about me that you have questions or even a concern about?
  4. What type of person has been most successful in this position in the past?