Keep hospital-physician co-management agreements legal

Because the co-managment model is relevantly new, hospitals and health systems should clearly discuss with physicians fee structure, quality metrics, benchmarking, historical performance, and legal guidelines, according to an article in the Healthcare Financial Management Association (HFMA) magazine.

Hospitals and physicians may be considering or already involved in co-management agreements as an alternative to hospital physician employment. Under such agreements, the hospital typically contracts a particular service line to physicians with specific pay-for-performance goals. Physicians sometimes prefer the co-management agreements to hospital employment, as they can retain some independence while enjoying the benefits of organizational support.

To ensure compensating physicians at fair market value for federal compliance, the article offers the following tips:

  • Understand the fee (fixed and variable) structure
  • Choose a structure and appropriate metrics, using guidelines from the Centers for Medicare & Medicaid, as well as the Office of the Inspector General
  • Use industry benchmark data to determine variable fees
  • Consider historical performance to decide on compensation
  • Ensure the agreement is legal, within fair market value, and protect patients

For more:
- read the HFMA article

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