Physician's Compensation Measurement, Benchmarking, and Implementation

by Carter, Lucy R.; Lankford, Sara S.

• ISBN13: 9780471323617
• ISBN10: 0471323616
• Edition: 1st
• Format: Hardcover
• Copyright: 2000-10-04
• Publisher: Wiley

Summary

Physician Compensation Means More Than Money Physician compensation planning and methodology is a complex area that is influenced by many key factors. It takes experience and sharp analytical skills to manage. This invaluable handbook will serve as a guide for the physician compensation process and provide the medical practice industry with various alternatives, as there are no simple solutions to physician compensation modeling. This volume: * Provides the foundation to build compensation plans that are easily understood and accepted by physicians * Covers compliance with government regulations * Includes models addressing Stark, cost allocations, departing physicians, and new recruits * Discusses hospital-owned practices * Includes production measurements covering relative value units, charges, and collections CPAs and health care management consultants and administrators, physician management companies, hospital CEOs and CFOs, attorneys, and actuaries will find the information in Physician's Compensation indispensable to designing effective, equitable, and appropriate compensation plans. www.wiley.com/accounting

Author Biography

LUCY R. CARTER, CPA, is the President of Carter, Young, Lankford & Roach, PC, located in Nashville, Tennessee. She currently chairs the Valuation and Litigation Services Committee for the Tennessee Society of Certified Public Accountants and serves on the Group of 100 for the American Institute of Certified Public Accountants. Ms. Carter is also a member of the Nashville Estate Planning Council and the Medical Group Managers Association, and serves on the CEO Roundtable for the Nashville Chamber of Commerce. A frequent speaker and author of numerous articles on medical management and compensation topics, Ms. Carter is also an editorial advisor for the Practicing CPA.

Table of Contents

Introduction	1	(4)
Factors Impacting Physician Compensation	5	(15)
Managed Care	6	(1)
Product Development	7	(1)
Financial Implications	7	(3)
Consumer Demands	10	(4)
Merger and Integration of Practices	14	(3)
Government Regulation	17	(3)
The Shrinking Pie	20	(8)
Reimbursement Trends	21	(1)
Medicare	21	(1)
Participation versus Nonparticipation	22	(2)
Medicaid	24	(1)
Managed Care/Commercial Payors	25	(1)
Overhead Trends	26	(1)
Competition and the Impact on Physician Compensation	26	(1)
Disease of Me, Defeat of Us	27	(1)
Defining the Pie	28	(4)
Net Cash Available	28	(1)
Net Income	29	(1)
``Eat What You Kill''	30	(1)
Bonus versus Incentive	31	(1)
Financial Reporting	31	(1)
Regulatory Considerations in Physician Compensation Arrangements	32	(24)
Tax-Exempt Organizations	33	(1)
Recruitment Agreements	33	(2)
Tax-Exempt Financing	35	(2)
Fraud and Abuse	37	(1)
Antikickback Statute	37	(7)
Stark I and Stark II	44	(8)
Fair Market Value Compensation	52	(1)
De Minimis Compensation	53	(1)
Discounts	54	(2)
Four Principles of Compensation	56	(6)
Physicians in the Group Must Trust the Formula	56	(1)
The Formula Must Be Clearly Understood	57	(2)
The Formula Must Be Equitable	59	(1)
Group Incentives Must Be Promoted	59	(3)
Tax Considerations for Physician Compensation	62	(13)
General Partnerships	62	(1)
Limited Liability Companies	63	(1)
Professional Corporations	64	(11)
Employment Agreements	75	(8)
Base Salary	83	(11)
Preparing the Budget	85	(1)
Revenues	86	(2)
Expenses	88	(1)
Capital Budgets	89	(1)
Determining Base	90	(4)
Incentive Compensation	94	(7)
Physician Benefit Plans	101	(8)
Measuring Productivity	109	(5)
Gross Charges	109	(1)
Adjusted Charges	110	(1)
Collections	111	(1)
Relative Value Units	112	(1)
Weighted Average Production	112	(1)
Points System	112	(1)
Other Methods	113	(1)
Relative Value Units	114	(7)
Work RVUs	116	(2)
Practice Expense RVUs	118	(1)
Malpractice RVUs	119	(1)
Geographic Practice Cost Index (GPCI)	119	(1)
Conversion Factors	120	(1)
Using Relatives Value Units to Measure Productivity	121	(4)
RVUs in Capitation	123	(1)
Costs per RVU	124	(1)
Cost Allocation	125	(8)
Direct Expenses	126	(1)
Equal Expenses	127	(1)
Utilization	128	(1)
Volume	128	(1)
Prior Year Allocation Method	129	(2)
Stark Revenues	131	(2)
Administering the Compensation Plan	133	(6)
Academic Group Practice Compensation Models	139	(6)
Physician Integration Systems	145	(10)
Management Services Organization Model	146	(2)
Foundation Model	148	(2)
Hospital-Owned Physcian Practice Model (Integrated Delivery System)	150	(5)
Compensating the Physician CEO	155	(9)
Medical Administration	160	(1)
Evaluation and Management of Physicians	160	(1)
Committee Responsibilities	161	(1)
Quality Management	161	(1)
Miscellaneous Duties	161	(3)
Physician Compensation Case Studies	164	(12)
ABC Internal Medicine Practice	165	(5)
XYZ Surgical Group	170	(6)
Common Pitfalls	176	(3)
Appendix A Sample Physician Encounter Budget and Comparison	179	(1)
Appendix B Sample Practice Budget	180	(3)
Appendix C Sample financial Statements	183	(5)
Appendix D Revenue Ruling 97--13	188	(9)
Appendix E Glossary of Terms	197	(4)
References	201	(4)
Index	205