Home

  • Home
    • » e-Newsletters

When your hospital demands performance criteria, meet it head on with demands of your own

Radiology Administrator's Compliance and Reimbursement Insider, April 1, 2005

The growing shortage of qualified radiologists is forcing hospitals into direct competition with health plans-and justifying the large salaries and other perks that come with the territory. Today, more hospitals are inserting performance criteria into their contracts with radiologists and proposing benchmarks or goals to measure performance that practices must meet under the terms of the agreement.

Although they have positive aspects, the performance-based criteria also can hammer away at hospital-based radiology practices-many of which are justifiably wary about agreeing to such language in their contracts with hospitals, explains Philadelphia healthcare attorney Joan Roediger, who counts several large radiology practices and medical staffs among her clients.

Some radiology practices are offended by hospitals' attempts to quantify and qualify their performance. So if the hospital you're affiliated with isn't flexible on this point and wants to continue to provide radiology services, you may have to bend your rules. If you're willing to spend time negotiating, you may be able to work out performance criteria that both you and the hospital can live with. You also may be able to add performance criteria that you want the hospital to meet under the contract. We'll explain how to make a hospital's demand for performance criteria work to your benefit.

Performance criteria is probably here to stay

There are several factors motivating the trend toward hospitals inserting performance criteria into contracts with physicians, Roediger says, including the following:

  • Competitive pressure from managed care plans. Managed care plans penetrate even the most resistant markets, making it difficult for hospitals to survive if they're not approved by the plans that operate in a given area. Just as managed care plans judge hospitals based on quantifiable data, hospitals are beginning to apply this method to their staff. By establishing performance criteria and proving that staff meet or exceed those criteria, hospitals offer plans a basis for comparison and strengthen their ability to compete for plan business, says Roediger.

  • 'Private inurement' concerns. Not-for-profit hospitals have a legal obligation to work toward a charitable purpose and can get into trouble with the Internal Revenue Service, the Centers for Medicare & Medicaid Services, and state regulators if a private individual reaps an "excess benefit" through his or her affiliation with the hospital. Paying an excess benefit is called "private inurement," Roediger explains.

    Although it may seem like a reach to think that a radiologist's salary could be considered a private inurement, if the salary is considered excessive for the required duties, it could be construed that way. So hospitals that demand performance criteria are being extra prudent by spelling out exactly what's expected in return for a salary, Roediger says. They also give themselves a way to measure performance against those expectations.

  • Typical performance criteria demands. Hospitals are generally looking for contractual assurances that their radiologists provide quality services, meet patient satisfaction goals, and conduct their practices in accordance with hospital policy by

    - performing services promptly

    - documenting services appropriately

    - billing for services correctly (if the practice handles its own billing)

    - maintaining productive relationships with treating physicians

    - educating medical residents, students, colleagues, and other staff

    - caring for patients sensitively

    Hospitals likely will want to quantify these demands to give themselves some method of measuring your practice's ability and willingness to pursue these goals, Roediger says. To this end, she has seen contracts in which a hospital attempts to insert clauses that do one or more of the following:

    - Require that patients receive radiology services within a certain period after the physician order is entered in the chart.

    - Require that tests be interpreted and a report entered in the patient chart within a specified period after the test is performed.

    - Demand that charts be subject to, and pass, periodic audits meant to determine adequacy of documentation.

    - Demand that billing records be available to the hospital for periodic audits, if the practice handles its own billing.

    - Mandate that a certain number of hours per month be devoted to education through teaching clinics, grand rounds, mortality and morbidity conferences, seminars, etc.

    - Demand that radiologists participate in a specified number of attempts to market hospital-based radiology services to referring physicians/the patient community.

    - Demand that the radiology department achieve a particular score on patient satisfaction surveys. Some of these demands can be couched in terms that may be acceptable for your practice, Roediger says. You may need to reject others outright.

    Make performance criteria work for you

    If your hospital wants to incorporate performance criteria into, Roediger advises the following:

  • Determine which criteria you can control -and firmly refuse to agree to those criteria you don't have control over. Example: Your hospital may want you to agree to a clause mandating a minimum average score on patient-satisfaction surveys. But obstacles you can't control (e.g., the attitude of orderlies or the length of waiting time for a procedure to be performed) are likely to affect your scores. For this reason, don't agree to this clause, Roediger says.

  • Try to negotiate reasonable performance expectations.Example: If the hospital wants to require your practice to read a minimum number of images per week, make sure that number is in line with your present workload. If the hospital aims too high, negotiate a lower number, Roediger suggests.

  • Try to persuade the hospital to reward you if you exceed the performance criteria.Example: Using the situation above, get the hospital to agree to bonus payments for every time you exceed the mandated image counts by 5%.

  • Agree to accept performance criteria only if the hospital will agree to certain performance standards.Example: If the hospital handles your billing and collections, make it agree to increase its collection rate. Or if the hospital handles transcription for your practice, make it agree to transcribe reports within a certain time period.

    Make hospital demand benefit you

    Here's an example of how you can negotiate a hospital's demand for certain performance criteria: The hospital wants to insert a clause that will obligate your practice to complete interpretive reports and forward them to medical records within 96 hours of a patient's examination. This may seem like a tall order, and maybe it is. Depending on your practice's circumstances, Roediger suggests the following ways to adapt the clause:

  • Set a more reasonable goal. Agree to complete the interpretive report within four business days for at least 80% of the radiological examinations you perform, and agree that the practice will make its best effort to forward complete interpretive reports to the medical records department within five business days.

  • Demand a bonus if you exceed the goal. For example, demand a cash payment for each incremental improvement of performance over and above the stated goals.

  • Set goals for the hospital. If the hospital performs transcription services for your practice, set a standard for its transcription turnaround (e.g., two business days). By considering how to make performance criteria work to your benefit, a clause such as this can be a win-win situation. With a little negotiating, the clause may look like the one below, which assumes the hospital provides the transcription.

    Insider says: Depending on your preferences, you may want to personally negotiate your practice's contract with the hospital or have your attorney do it. If you negotiate the contract yourself, it's crucial to have a competent and experienced health law attorney review it before you sign, Roediger says.

    Insider source

    Joan Roediger, Esq., Obermayer Rebmann Maxwell & Hippel, LLP, 1617 John F. Kennedy Blvd., 19 th Fl., Philadelphia, PA 19103.

    Model language

    A. Interpretive reports. Radiology practice shall make its best efforts to complete interpretive reports for 80% of all radiological examinations within four business days of the patient's examination, and to complete all interpretive reports no later than five business days after the patient's examination. Radiology practice will take all necessary steps to ensure that complete interpretive reports are forwarded to the medical records department promptly.

    B. Bonusfor exceeding "success rate." The percentage of the total interpretive reports completed and sent to medical records within four business days of the patient's examination shall be termed the practice's "success rate." Should radiology practice's success rate exceed 80% at the end of six months, radiology practice shall be entitled to a bonus equaling [insert amount, e.g., $10,000] for each 5% by which practice's success rate exceeds 80%.

    C. Transcription of reports. Hospital agrees that transcription of radiological reports shall be completed and returned to the radiologist within two business days of submission to the transcription department.

    1. Radiologist shall notify hospital within one business day should any interpretive reports not be transcribed within the agreed time period.

    2. Any such reports not properly transcribed shall not be counted toward the calculation of radiology practice's success rate as that term is defined in paragraph B.

    • Most Popular