Physician Payment Compliance: 3 Strategies for Avoiding Risk

By Jerry E. Lear, CIA, CISA, and Ronald K. Wolf, CHFP
| 8/7/2018
Physician Payment Compliance: 3 Strategies for Avoiding Risk
Federal regulations require all hospitals to document the time that physicians spend on activities for which they are contracted, and this time is documented in a variety of categories depending on hospital type. On a hospital’s annual cost report, which is submitted to Medicare and Medicaid, physician time studies serve as a primary source of supporting documentation of physician and other practitioner compensation costs. Failure to properly document physician time, including discrepancies in reported time, can result in costly fines and penalties, audit adjustments, and lost hospital reimbursement.

To avoid the serious risks associated with noncompliance, hospital leadership should consider the following three strategies for documenting physician time studies:

1. Use an automated system
Many organizations still complete time studies using paper forms or computer-based spreadsheets. The benefits of using an automated time study reporting system, however, cannot be overstated.

Automation provides a seamless, integrated process for reporting time studies and is overall a more effective and efficient way to capture, document, and report physician time. A paperless, automated time study process streamlines reporting and can result in a more organized and more accurate database.

An automated time study system should possess several key capabilities. It should:
  • Be accessible on smartphones, tablets, laptops, and personal computers, allowing physicians to enter and approve their time from any location
  • Have customizable views that allow for input of information pertaining only to the individual physician’s activities, minimizing risk of errors
  • Allow for administrative support and automatic email reminders, which can promote acceptance and increase participation by physicians
  • Serve as a single repository for any supporting documentation needed for an audit
  • Be capable of delivering information in real time
  • Include reporting capabilities related to topic areas such as allocation agreements, administrative time, teaching time, emergency department availability, transplant time, and research grants
These and other features associated with an automated time study process can improve organizational workflow related to time studies while reinforcing adherence to regulatory requirements.

2. Gain physician buy-in
As with many hospital initiatives, such as implementation of electronic health records systems, successful transitions often rely on physician buy-in and creating an organizationwide culture that accepts the new technology or process. For time study processes, ease of use is one critical factor in gaining physician buy-in.

No physician is interested in completing excessive paperwork, and automated time studies are a logical solution that can make it easier and more desirable for physicians to complete the task. Automation gives physicians control of and accountability for accurately recording their time worked and receiving compensation for that work. A technology-based process also appeals to younger generations of physicians who already are embracing the use of smartphones and tablets in their daily work.

Making sure the automated time study process fully integrates with existing contract management systems – which physicians are already comfortable with – is another consideration when attempting to gain physician buy-in.

3. Consider real-time monitoring
An effective automated time study system that is integrated with an organization’s contract management system should provide real-time monitoring capabilities to accounts payable staff, payroll staff, and others within the organization who are responsible for managing payments. This allows staff to make sure physicians’ time entries are completed correctly and contemporaneously and that physicians are not being overpaid or underpaid, minimizing risk in this area.

For example, real-time monitoring may identify when a physician is exceeding monetary caps for activities that he or she is contracted to do. In addition, real-time monitoring allows staff to flag an error and make an adjustment right away versus finding an error months later or, worse yet, during an audit.

Furthermore, the compliance and reimbursement staff can use real-time monitoring to assist with fulfillment of regulatory requirements such as Medicare reporting. Improper and untimely physician compensation documentation can result in missed reimbursement for hospitals, making immediate documentation processes even more important.

Mitigate risk
With heightened scrutiny of physician compensation arrangements by the federal government becoming a new reality, an efficient process for documenting physician time is essential to close risk gaps related to physician payment. An automated physician time study reporting system that is easy for physicians to use and that provides real-time compliance monitoring encourages physician participation and helps administrative staff mitigate risks and avoid potential penalties, steep fines, and lost reimbursement associated with noncompliance.