AHLA's Speaking of Health Law
The American Health Law Association (AHLA) is the largest nonprofit, nonpartisan educational organization devoted to legal issues in the health care field with nearly 14,000 members. As part of its educational mission, AHLA's Speaking of Health Law podcasts offer thoughtful analysis and insightful commentary on the legal and policy issues affecting the health care system. AHLA is committed to ensuring equitable access to our educational content. We are continually improving the user experience for everyone and applying the relevant accessibility standards. If you experience accessibility issues, please contact accessibility@americanhealthlaw.org.
AHLA's Speaking of Health Law
Changes to the Medicare Physician Fee Schedule: How Are Provider Compensation Programs Responding?
Aletheia Lawry, General Counsel, NextCare Holdings, Inc., speaks with Tony Kouba, Principal, ECG Management Consultants, and Kelsey Jernigan, Partner, K&L Gates LLP, about some of the recent changes to the Medicare Physician Fee Schedule (MPFS) and how provider compensation programs are responding. They discuss the split in how health systems are using the MPFS, how 2021 compensation data surveys will be impacted, and how compensation structures may change as more health systems move to value-based care. Sponsored by ECG Management Consultants.
New Health Law Daily Podcast Coming in January 2025
Coming in January 2025, AHLA’s popular Health Law Daily email newsletter will also be available as a daily podcast, exclusively for AHLA Premium members. Listen to all the current health law news from the major media outlets on this new podcast! Subscribe Now
Support for ALA comes from ECG management consultants, former information visit ECG mc.com.
Speaker 2:Welcome. Uh, my name is Tony COBA. I'm a principal with ECG. Uh, I lead the evaluation services practice as well as a leader on the compensation design team. Uh, I appreciate all our listeners joining, uh, for this podcast. Uh, we are, uh, discussing the PFS Medicare physician fee schedule changes in how our healthcare clients are navigating. Those changes. I'm joined today by my two colleagues, uh, Alaia and Kelsey Alaia will act as the overall moderator for the discussion and get, uh, sorry of the discussion going with both Kelsey and I, and I'll let my two colleagues introduce themselves. Maybe starting with you. Kelsey
Speaker 3:Sounds great. Hi, I'm Kelsey GaN. I'm a partner at K and L gates. Um, my practice is healthcare regulatory and we primarily represent institutional healthcare providers. I do a lot of work with stark and the anti kickback statute and physician compensation plans generally.
Speaker 4:Thanks Tony and, and Kelsey. My name is lathe Lari. I'm associate general counsel at honor health in the Arizona market. Um, I am thrilled to be able to pick the brains of, uh, two experts in the field today. We certainly have, have struggled, I think, as in-house counsel with our physician compensation, um, we were just starting to try and think about what are we gonna do to pay our physicians in calendar year 2021? Um, because productivity numbers visits just were, were crazy after COVID. Um, and then in August of 20, they sprung the new PFS rule on us, which had the increase in RBU's for E and M's decreased in the conversion factor. Um, they mitigated that a little bit. We were trying to figure out, um, what we might do with that. Uh, and then, you know, we come along into 2022 and we've got another conversion factor decrease. Um, they did about 3% of mitigation. They delayed sequester for a few months. Um, but to be honest from an in-house council perspective, I, and I'm sure others really, I don't think even have a, a, a grasp on, on responding to what COVID data looks like. Um, let alone what it looks like in terms of, uh, the changes that we've seen in the physician fee schedule. So, um, it's definitely been a challenging time for those of us in house that deal with physician compensation, um, especially on the heels of, of COVID and everything we were dealing with with that. So, um, I'm gonna jump right in and take advantage of your expertise. And so my understanding from my colleagues in the in-house world is that there's really sort of a split in how systems are using the physician fee schedule. Some are using the 2020 fee schedule for compensation. Um, others are adopting 2021 for compensation, but then they're making adjustments to comp rates to try and maintain historical comp. Um, just wanted to get a, a kind of feel from the two of you, what you're seeing with your clients and what they're doing with that physician fee schedule. Um, and maybe Tony, you could start.
Speaker 2:Yeah. Uh, so we, we completely understand, you know, um, or try to understand all the internal chaos that our clients are going through, um, because of COVID and, you know, a lot of times as a, uh, consulting firm, one of the first questions we get asked is just, you know, where do we stack up relative to others on, on cha this challenging, uh, change and the, you know, depend how you look at it. The good news is, is that, you know, like minority of, of, of health systems have actually implemented the new, uh, fee schedule. So, uh, ECG conducted a pulse, a recent pulse survey, um, in, in roughly a third of those organ healthcare organizations did implement the new updated fee schedule, um, the remaining two thirds, uh, or really split, um, half, uh, uh, a plan to, um, update, uh, likely this year, the other half, um, uh, are, are still undetermined and then potentially looking to do it in 2023 and make those changes. So there, so, so the good news is, is that you're not alone, that, you know, many of, uh, of your colleagues, uh, across the country are still sort of lack of a term kicking the candle of the road, just because of some of the other challenges you're currently facing. Um, and I maybe I'll give a little perspective of, of, of that third that actually did implement the new, uh, fee schedule essentially did it to, to be budget neutral. So they would, you know, decrease the, the pay rates or increase work thresholds. Um, there might be some temporary comp guarantees, but ultimately the, the goal was, is levers of compensation sort of budget slight.
Speaker 3:That's exactly been our experience with, with our hospital clients in particular. Um, most of our clients have not implemented a new change, or as Tony mentioned, the changes that they've implemented have been to, um, maintain budget neutrality. So, you know, like as you mentioned, it's been chaos in the healthcare industry during the pandemic, and, um, everyone has been focused on COVID and these changes did not come with a lot of notice. And so, you know, most of our hospital clients have performed short term solutions. And so, um, they've either delayed the transition together, or they've assessed the compensation per work RVU, um, in a way that, you know, doesn't implement these major changes to compensation plans. Um, I think that's probably coming in the future, but, you know, we've just not been able to, um, work it in as, as you know, in your experience with everything else that's going on in the industry.
Speaker 4:Right. Well, it, it is always nice to know that we're not standing alone on an island. Um, I was talking with a colleague of mine the other day, uh, at a conference and she said one of the best things about the conference is, um, just hearing that other people are struggling with the same things that we're we are struggling with. So, um, it, it's very good to hear that.
Speaker 2:Well, uh, uh, go ahead, Tony, probably an important thing to mention as well is when I talk about the, the third that have implemented the fleet schedule, a lot of times that's mostly around their employed provider networks. Um, if you have professional service arrangements, we're seeing a lot of those just because the agreements are in place and they're not up for renewal that, you know, those are left still untouched, even for those that implemented, uh, the new fee schedule for their employee providers. And ultimately that also leads to, you know, additional challenges, right. Cuz you're sort of monitoring both kind of both, uh, feeding both worlds, right. Uh, between the two schedules,
Speaker 4:Right? Yeah. And it, and at least I know for us, in some specialties on some of those professional services arrangements, um, we, we had to do some interesting things in terms of, uh, comp to get coverage, um, with, with a lot of the COVID surges. So, um, that was just another layer, I think of complexity that was in there. Um, but I, I guess one of my, my next big questions, right. We're we're lawyers, um, some of us went to law school, so we never had to deal with numbers again. Um, but I think in general, we like to leave the numbers to, uh, to some other people. And I'm, I'm really, we've got a third implementing, we've got half planning to maybe implement this year, half haven't determined what they're gonna do. I know that doesn't add up to a hundred percent, but you get my point. Um, you know, people are trying to maintain budget neutrality. Um, we had to offer some, uh, you know, extra dollars in some specialties for coverage during COVID. Um, and, and what is this gonna do to the next set of comp data that, that comes out from the various, um, survey, uh, companies? I, I, I just don't know how that's, what that's gonna look like. And I'm wondering if we're even gonna have reliable comparable data.
Speaker 2:Yeah. Yeah. We, we at ECG agree, um, we hope thankfully we're your numbers, your numbers, people so can help. Um, it might be helpful just to set the stage again, just remind, uh, folks about how the surveys, you know, or what the makeup is. So, you know, if, if the current survey year that we're all using is 2021, um, and we're gonna likely get the 20, 22 surveys again over the next few months, the update, but the, the survey year at lag, right? So the, the 2021 survey is used as 2020 data. The 2020 surveys used in 2019 data. So there's, there's a leg there. And so the current surveys that we're utilizing, um, you know, thankfully don't have the, the Medicare resistant fee schedule changes yet because it's using 2020 data, but, uh, not thankfully it has the COVID effect, right? So the, the data is not reliable because a lot of physicians had seen guarantees in compensation, but their productivity drop due to, to, to COVID and, and freeze on, on seeing patients. And ultimately what you find is that many of our comp models are based on, you know, conversion factors. So the, the conversion factors have gone up significantly. So they're not that reliable for using the 20, 21 survey. So, um, a lot of organizations, uh, have continued to, to use the 2020 surveys. And again, as I, I mentioned earlier, if only a third have implemented the new fee schedule, it means two thirds of not. So majority of our, our clients and, and, and health systems are working with continue to use the 20, 21 surveys and, and, and likely are leg adjusting those forward to provide some level of market adjustments to, to draw some comparables, uh, between the, the specialties. And so what we're finding is that, you know, when we look at healthcare systems, what they're doing is a lot of times they're using both 20, 20 surveys as well as 2021. And one of the things I should comment quickly of, of, of why the 2021 survey is still useful is that the actual compensation, Prete numbers are fairly reliable. It's just any of the benchmarks that include the productivity elements to it. Um, like comp work overview or comp collections are not really all that reliable. So, um, that is why clients would use the 20, 21 surveys in addition to the 2020, uh, surveys as well.
Speaker 3:And I think our experience, you know, a lot of our hospital clients are, are reaching out to evaluators more frequently, um, because of this uncertainty. And so, you know, whereas previously they may have just, you know, referenced survey data now there's that caution and uncertainty based on the COVID effect that Tony described. And, you know, we're just more hesitant to, to make that decision on our own. And so, um, a lot of clients are just excluding the 2020 numbers altogether because it's not reliable, um, in their experience, they, they paid over what, you know, they relied on the COVID waivers to pay in excess of what they typically would have to make sure that they were fully staffed. So, you know, some clients think that the 2020 compensation members aren't even as reliable in their personal experience, productivity certainly is lower, um, because of the free zone electives cases in many cases, and, you know, just lower volumes during COVID. So we're seeing, um, you know, clients that, that do reference survey data exclude the 20, 20 numbers and the 2021 survey, um, or, you know, implement a rolling average of multiple years kind of as you, you referenced Tony looking at both. Um, but more often than not, I think we're just, you know, going to the experts and, and referencing, um, engaging evaluators to give us the, the true opinion that we should look at.
Speaker 2:Yeah. And I, and I'll, I'll add that, you know, I talked about 20, 21. I didn't really talk about 20, 22 in, in, in the future. So the challenges then obviously are gonna be that COVID, didn't go away right in 20, uh, 21 and into 2022. So now when our 2022 survey using 2021 data, it's gonna have both the, no continue to have the COVID effect, uh, in particular markets, as well as now, we're gonna have this sort of, you know, uh, two sort of divergent data sets where we're gonna have organizations that the third, that didn't move to the, the new fee schedule and the, uh, uh, all the, all the others that have not. And so, uh, you know, survey firms like ours will likely, uh, report different data sets depending on the fee schedules that were used to at least have some level of reliable information. And, um, as you know, when we start separating data sets, again, it just affects the sample size. And the way we effect affects sample size also can have, uh, more variability from comparing from prior years, right? So, um, even the 2022 surveys are gonna be coming out, there is gonna be some challenges there as we sort of look at multiple data sets that are gonna be reported that are different than the traditional, just national, regional type data sets that we would report on.
Speaker 4:Kelsey. I think you brought up a good point that I'd like to talk just a little bit more about, um, for example, at, at our system, we key the use of evaluators based on some benchmark data, right. Um, if we're bringing in a physician and we're going to offer them a base salary that is, you know, under the 25th percentile of the data that's out there, we, we feel like we're in pretty good shape, right?<laugh> um, as, as long as they're working and producing some VUS, we, we feel pretty comfortable there. Um, but, but those benchmarks or those kind of cutoff points or things we've used to determine when we need to send something out to have it looked at, I, I, I wonder if those are sufficiently safe anymore for us in house. So for example, we might have said at 50th percentile, we need additional documentation of, um, the, the need for this specialty or the need for this physician. Um, at 75th percentile, we might have said, you've gotta send it out for a fair market value opinion. Um, if we were proposing to compensate, um, you know, near the 90th, we might have said, we need all that additional information. We need a fair market value opinion from an, an independent value, and we need, um, you know, a special approval, right? Some kind of a committee approval to look at this, to make sure it's right. But if those benchmarks are so loose now, or you're seeing a lot of people just going to evaluators, you know, more often than they had been, um, are we gonna miss the, the ball, um, the, the movement in the community by not doing that? And do we really need to be sending more out to be safe, um, and protected if against the government or someone coming in and saying we weren't paying at fair market value.
Speaker 3:Yeah, it, it's an interesting question. And I think, you know, I always look back to the, the stark requirements to be fair market value. Um, and the recent commentary from CMS was incredibly helpful on that point in saying you don't have to have a third party valuation to prove that something is fair market value, so that that's incredibly helpful. Um, I think it's, it's likely just a temporary confusion as a result of all these factors that we've talked about in terms of, you know, how safe are these benchmarks. Um, and, and a lot of what our clients are going to evaluators for in this context is the, the overall compensation plan. So maybe not the, the single physician with a professional services agreement, um, or, you know, an employment salary that's below the 25th. Um, but generally structuring the plan, particularly when, you know, we're looking at a full specialty, um, the base salary, what, what are worked are we use is that base salary threshold based on, um, tiered productivity compensation, you know, are we setting those tiers correctly? Um, that's where we've seen evaluators be incredibly helpful in translating the effects of COVID and the fee schedule changes. And, you know, the last two years of low volumes, you know, reliance on COVID waivers, all these factors that we've talked about, um, you know, we've really seen our clients relying on evaluators in the big picture compensation plan structures.
Speaker 4:And how does it complicate structures? Um, you know, if you're starting up on a new specialty and you're starting right, the first time you've looked at any of this is, is now, um, with this data that's sort of all over the place, um, or potentially all over the place, uh, are, is anyone seeing compensation structures, those for those compensation plans starting to change? I mean, I think we've seen a lot of, um, you know, base plus productivity incentive and some quality in there as well. Um, is anyone starting to try and get away from that?
Speaker 2:Yeah, I, I would say that, um, there has been a significant increase in demand for, I would say wholesale compensation, uh, redesign engagements, where, um, because of, you know, the nuances of every time CMS changes, the fee schedule impacts compensation to really deemphasize the work, our view, and start emphasizing other areas like, you know, value based care. And, you know, as CMS is, is moving towards that. And, um, you know, lack of our term, again, the disruptors of healthcare, we're the more non-traditional, uh, providers, um, uh, networks out there they're really maximizing, um, the, the, the income or profitability from moving fee for service revenue, into value based care revenue streams. And, uh, our, our more traditional, uh, uh, healthcare system provider networks are, are, are starting to do the same and taking advantage of that. And so when you think about the compensation methodology, it's, it is sort of deemphasizing the work, our views, and start, you know, looking maybe to sort of answer your question just about sort of, you know, what's really true north. I mean, remember that, as I said, the compensation P Ft benchmarks themselves are actually fairly reliable. Um, you know, and it really is a good, good task to, to the market, right? To be able to recruit and retain that, that arms light negotiation between provider and health system on what they're worth as a provider. And so those, those numbers, and so using that compensation is sort of to test, to sort of set what your target comp value would be. You sort of work backwards and value the various components. And so, uh, of, of the overall pool of compensation for total cash, you might say that, you know, 60% of that should still be tied to sort of work already productivity, uh, let let's pick on primary care, for example, not be measured on work VUS, uh, but maybe the remaining of, you know, 40% is tied to, to capitation or, or panel size, right. And sort of start measuring, um, how you do things differently. And of course have other quality metrics and things built into that. You know, I was just kinda using loose percentages, but, um, but we definitely, I mean, absolutely the answer is we are absolutely seeing that right now, there isn't a comp design engagement that we are not actively on right now that the value based comp discussion isn't happening and, and, and, and there's gonna be some level of pay that's not just tied to VUS.
Speaker 3:Yeah, absolutely. And, you know, I think just in the context of value based care, we are, our clients are moving towards value based care. Um, I think, you know, some systems that have an existing value based organizational framework such as an ACO or a clinically integrated network, you know, they've of course had a head start on implementing some of the new models that, uh, the industry is thinking about. Um, the stark and anti kickback statute exceptions and waivers for value based care that were finalized, um, in effective in 2021 have really opened up a lot of opportunities, um, for hospitals and, you know, all sorts of healthcare providers to take advantage of. We haven't seen a huge shift yet towards, um, some of the significant and full financial risk models that, you know, are an option under the new exceptions in safe harbors. I think a lot of that is just based on how complex the requirements are. So the, the value based exceptions under stark do not fully overlap with the value based safe harbors under the anti kickback statute. And so, um, health systems that are at the beginning of their value based journey, um, without the organizational framework already in place are trying to figure out how do we structure this, um, in a way that, that we could satisfy both if needed, um, you know, approaching physician compensation conversations with, you know, the discussion about taking on financial risk, and that is newer for many physicians. Um, and so figuring out, you know, how to, how to structure financial risk in the physician compensation area is new. Um, I'm interested Tony, if, if you all have, um, structured many, um, you know, risk based arrangements yet, and, and how, how you've seen your clients, um, proposing those models
Speaker 4:Real quick. Yeah. Before Tony answers that, um, I just have to put a plug in for our wonderful government who keeps us all, uh, with a lot of job security by, you know, creating exceptions that don't match each other, um, and, and giving us this complex world that we have to, um, to navigate. But, but Tony, I am very interested to hear your, your thoughts on that, because I I've sort of wondered, is this gonna push us to value based care faster?
Speaker 2:Yeah. I mean, we, we have a similar experience to Kelsey where, uh, the movement hasn't been as quick as one would think, because we do believe those, those changes and the regulations is probably the most significant thing that happened to us in at least in, in, in healthcare, in, in a, in a quite a long time. Um, and, and really allowing a better opportunity to align, you know, health system goals with, with physician, um, compensation and, and maximizing, you know, uh, increased quality, lower cost, um, and just better overall care and access to, to patients. Um, but because of the resource constraints of COVID, right, just be just like all the, the, the two thirds of the organizations that are kicking the can down the road with the Medicare physician fee schedule changes to Kelsey's point. These, these, these, the, the laws are, are very difficult to navigate. Um, and, and ultimately are also likely probably not taking advantage of them as quickly as, as we probably say you should, right? Because there really is opportunity there, um, to, to have different and, and, and better, um, reimbursement streams that actually provide a different source of, of, of probability to, to the health systems or medical groups. Um, but the, the question that, you know, Kelsey dash is around, you know, how, how we're structuring those again, you know, when we do a comp design plan, you know, from a, from a philosophical standpoint, you know, we want to make sure, again, that we're tying the levers of provider compensation to the levers of reimbursement. So if you are still predominantly fee for service, um, we're gonna wanna make sure we continue to have a productivity measure, uh, or a component into that comp plan. However, as you move your reimbursement over time to value, you're gonna wanna change the lever as a provider compensation. And so, um, Kelsey, we, we, we continue from a design standpoint, want a target comp based on the surveys again, looking at that compt number cause right, no, one's giving it, uh, our, our clients more money right there. There's no more, there's not huge increases in reimbursement that's coming in. So that's really the same sort of framework you say when it comes to physician compensation, just because you're moving into value. Doesn't mean it's additive, right? It's still part of the overall compensation pie, uh, uh, that's being provided to the physicians. And so it's just really how you allocate that pie, those, those dollars into the various components. So, you know, obviously if it's fee for service and volume, you want to continue to look at work VUS. Um, but again, you know, it's kind of hard to have feet in both worlds. So, you know, a lot of times we will recommend pushing towards, you know, start measuring panels appropriately, um, especi, especially for primary care and in aligning those goals with those reimbursement, uh, changes. But yeah, absolutely. We we've Def we definitely worked in that space. We are working in that space, but to your point, Kelsey, it is lower than we probably would've of thought we would see I've seen so far.
Speaker 4:Do you think this is gonna create two, um, two models that may compete in some market areas, one market, one market, um, or system in the market sort of stays with a non value based and, and, you know, a base salary and very productivity based that the physicians have seen and are comfortable with. Um, and another, that's moving to this value based, um, care with, with the physician sharing in some financial risk.
Speaker 3:I think definitely that that's a great point Alaia, and, you know, that is likely where we're going in the short term, um, while everyone is figuring it out. And I know we keep coming back to that, but it it's so new and, um, organizations are approaching it differently. And I think it's just gonna take some time for, um, you know, physicians to understand, you know, what, what is the value based model, what effort is required, how does it change their practice? Um, and, you know, are these value based compensation arrangements? How does the compensation net out ultimately? And so I think it's, it's gonna be interesting to see how the market changes and whether or not, um, you know, hospital systems and clinical and networks can structure compensation in a way that, you know, everyone's satisfied and, and it's competitive. And you know, that the, the traditional payment models, um, are competing as well.
Speaker 4:Yeah. I, I, I don't know how to help physicians understand this, um, because it's so complicated and quite frankly, I'm not even sure, you know, on the business side, we understand it all yet. Right. And I mean, I, I, I still have discussions with physicians about the inverse relationship between their productivity and their dollars per VU. Um, I, I still can't always get them to believe me<laugh>,
Speaker 3:Uh,
Speaker 4:That the more productive you are, the more, the less you tend to, to work, to earn per VU. Um, I don't know how we're gonna, how to have this conversation with them. Um, and, uh, I, I don't know that I anticipate either of you have the magic, um, you know, formula for that, but a, any thoughts on how we, we talk to our physicians about where this is going and what it's gonna really mean for them and, um, how to get them comfortable with it.
Speaker 2:Yeah. I mean, I think as I was sort of saying earlier, I mean, again, making sure from a high level standpoint, you sort of UN have them understand that, you know, that the it's important to know that the health system is not receiving a significant increase in comp and, you know, really it's, it's around, you know, how the payers are moving away from fee for service to value and how that has to align with their comp plan. And, you know, and, and that's the traditional sense, right? And under what, you know, Kelsey is brought up with just these, these, the changes in the star and kickback, um, and to value there is actually opportunity where you could win that, you know, in compensation that doesn't necessarily have to be fair market value, but again, for those, those health systems are still gonna have to probably have some review around the traditional type of services the physician would provide even outside of those exceptions of, of needing to be fair market value under, under those value-based, uh, entities. But you know, it again, it's just, I think, I think the simple answer, I guess I would say is when you're, when you're doing the comp design change, we would just recommend, you know, it's, it's, it's getting physicians away from thinking that, you know, that their compensation is linear based on volume, you know? Right. And it's, it's starting to set aside or fixing compensation. That's tied to other things. And even if it's simply a base salary, um, you set a base salary and then you just set some good performance expectations around that base salary. What does the organization expect of that provider? Just to be a, a, a good valued, uh, good value partner to the organization and having them start think of other things other than work, our views to have that base salary, right? Those are, those are sort of the ways we'd say simply to start those con those conversations.
Speaker 3:I think, you know, the value based framework that, you know, CMS and the OIG is put out in the exceptions in safe harbors. I think it's helpful to just remind everyone that it's not just a hospital physician relationship anymore. And, you know, the whole concept is to have value based arrangements and participants that are more expansive than just the physician and the hospital. And so, you know, the substantial downside risk and the full financial risk, um, and several of these models require that there's a payer participant. Um, and, and it's, it's including the acute care provider and the post-acute care provider and the, um, other participants across the healthcare spectrum. And so, you know, involving everybody on the front end to figure out how can we move to value-based care? What are the populations that we're looking at? What are some of the quality metrics? Um, I think, you know, instead of just a top down approach from hospital to physician, this is what we're gonna pay and it's based on your volume. Um, I think the, the goal is to move towards a more collaborative model and, and, you know, structure financial relationships accordingly,
Speaker 4:Uh, may maybe we can, um, get them to start teaching some business and, uh, start in Annie kickback in medical school.
Speaker 3:<laugh> we can go
Speaker 4:Prepare the next, um, the next group coming out. Um, do you at we're we're a little far away from the physician fee schedule, and I will bring us back there, but, um, I just had another thought, as we're thinking through that, do, do either of you think that we're gonna see more vertical integration, um, in, in the, the healthcare, um, provider market?
Speaker 2:It's,<laugh>, it's a really interesting question. Cause I think before some of these changes, I would've said we, you know, a couple years ago was the first time, right. That more physicians were employed, um, than independent, um, in, in the market. And, but now we're starting to see, you know, maybe again, we always joke in healthcare, right? There's sort of changes that kind of go back and forth and swing. You know, we are seeing a lot of independent groups that are growing and taking advantage of these reimbursement value based care opportunities and, uh, continue to recruit away from our traditional non, uh, profit, or even for profit healthcare delivery systems and, and causing, uh, a bigger challenge around supply and demand of providers. And so it's a difficult question to answer, cuz I actually feel like it's moving back towards where some, some models are working for independence versus being employed at this point. And it's, it's, it's becoming a challenge for, I mean, obviously regular Athia for even, you know, our, our, uh, our, our client partners where yeah. They're having issues retaining
Speaker 4:It's. It's interesting. Um, so I've worked in the Texas, Oklahoma and Arizona markets, and it's, it's interesting how different those markets were in terms of, um, physician interest in employment. Um, and, uh, and so I, I wonder, um, I feel like Arizona is just sort of very independent streak in Arizona. Um, and so I think we are, we are just sort of getting to where we have a lot of physician interests potentially in employment. Um, and now these changes may, may start moving that the other direction. And I wonder if that'll happen first in the markets where we've had a lot of physician employment and they're ready to, to look at something else or what that'll do to the Arizona market where we're just sort of getting into that. Um, so, uh, Kelsey, did you have any, any more thoughts on that vertical integration, anything you're seeing? I think,
Speaker 3:I think we're still seeing, uh, focus on employment, you know, hospital employment or, um, you know, if independent, larger medical practices. I, I think we, it's not as common to see the solo practitioner and the small groups. Um, we're seeing a lot more consolidation into, you know, among medical practices into larger, you know, multi-state national practices. Um, we're just, you know, within a region, just larger medical groups, if not employment, I think that's still the, the common model for us.
Speaker 2:That's a great point. Yeah, you're right there regardless. There's still more consolidation. Um, you're not seeing the, the small practices anymore. Those, those are continuing to, to, to be less common.
Speaker 4:I, I guess, um, maybe to, to sort of bring us back to that, to the physician fee schedule. Um, do you see a time when the fee schedule data starts to feel in reliability and the rest of that, the way it felt before COVID, um, or do you think the data moving forward is just always going to have this, um, the fact that there's so many different things going on in the market, um, that you're gonna have to do more research, more parsing of the data to get to what the norms are for the way you are compensating physicians. Right. For example, um, you know, if you're, if you're moved really embraced value based care, should you be at some point, will we be comparing ourselves to other people who are, have embraced value based care? And it might look different for people who are just employing physicians, um, on a, you know, a standard sort of base salary with some productivity in it. Um, I know market is, is all of those things and the government, I don't think is gonna let us parse it down that way, but, but are, are we as in house and you all, as you're advising your clients going to start really parsing down that way. Um, and, and again, I think back to that first question I asked, there's a lot to unpack, I think, in here, but are, are we ever gonna feel about the data like we did before? COVID
Speaker 2:Yeah, I mean, I, I think we're gonna always have a significant concerns over the productivity elements of the data. Uh, just because there is a lot of moving pieces where there are these fee schedule changes and those, those, those will stabilize over time. And we, I mean, we generally believe probably by 24, 25 surveys that, that, that would be stabilized. But as we move, uh, these comp plans away from work RVs and start looking at, you know, panel size, you know, there's gonna be different types of measures of, of production that will flow through and, and have to be reported in the surveys. Um, and we have a, we have a value based care survey here at ECG, um, that provides some, some of that information. Um, but you know, it, it, it, there is gonna be again, less focus on the production, but more focused on the, to, I would say this, I would say, you know, a lot of times, you know, again, we're a, a consulting firm, so we get the question a lot, like what's the market doing what's whatever, what is everyone else doing elsewhere? But at the same time, you know, our, our, you know, from where my fair market value had, I would say, you know, look internally to like, you know, how competitive do you need to be with pay, right? As far as recruiting, retaining your providers, what's happening in your local market, as far as where physicians, you know, are seeking employment and at what level of pay, and then also balancing with financial affordability. So it's looking at, you know, what is your overall investment per position FTE, and is that investment reasonable and sort of balancing both those sides, what we have to pay as well as what our overall investment is. And does that investment make sense from a fair market value, commercial reasonable perspective? So a lot of it is, is just sort of, again, starting high level and kind of building going backwards and building out what, what the methodology has to be to pay for that target compensation.
Speaker 3:Yeah. And that I'm fascinated to see where the, um, survey data goes in the future as more organizations, hospitals, you know, the healthcare industry moves towards value based care. Um, I think it's, it's great and interesting that that ECG has a value based survey. I think that will likely be more common. Um, and just generally it's helpful from a, a stark and kickback perspective now that, um, there's a little bit more flexibility in keeping compensation within the fair market value range in the concept of, of value based framework. Um, you know, of course I think it it's the unknown territory, um, in terms of provider compensation taking on risk and what that's ultimately gonna look like in our, our physician compensation structures.
Speaker 4:Well, I think we're getting, uh, towards the end of our time. So I want to, um, ask each of you, if you have any sort of parting thoughts, uh, for, for our audience on, um, physician fee schedule or, or any of the other sort of, um, areas that it touches that we've talked about today. Um, Kelsey, let me start with you.
Speaker 3:I think my, my number one parting thought is led to hope that the major changes from CMS have, uh, have come out and we are, we're not adjusting again with the next physician we schedule, I think, um, you know, our hospital clients and healthcare provider clients need some time to implement these, these changes that have already come out, um, and, you know, value based care and focus on telehealth. I think, I think we've got our hands full. So, um, hopefully we can sit with these changes, implement them before another major change comes out from CMS,
Speaker 4:Uh, from your mouse, right.
Speaker 3:<laugh>
Speaker 4:Tony.
Speaker 2:Yeah. I mean, I would just want to comfort those that are listening and say, if you haven't done anything you're, you're not alone. Um, and, uh, you know, kind of sit back, it's a good opportunity to kind of figure out, you know, where you want to be, you know, so sort of what your philosophy is and, and take the time, you know, over the next, uh, couple years as, as the surveys stabilize, um, to sort of figure out how you want to pay your providers. And, and, and, and I, I guess I just wanna let people know they have time, right. Just, you know, relieve some of that anxiety. Um, obviously not the lawyer on the, on the call and, but as evaluator, I'm making sure you continue to have good, fair market value comp and, and internal processes, but, um, but you, you have time to, to, to align your compensation to, so some of the levers are force changes that are out there.
Speaker 4:Well, I wanna thank you both, um, for sharing your expertise with, um, me and everyone who listens to the podcast, it is incredibly helpful. Um, uh, because as in house, what I can say, I think echoes what, what both of you said in terms of sort of the parting thoughts, which are there have just, it's just been so much and, um, trying to navigate that is, is difficult and it's difficult for multiple reasons, but having good partners, um, that we can talk with and rely on, and who can help us work through what we see, uh, is just so important. And, um, I, I, we appreciate that you all are out there. Uh, and I, I, um, uh, just wanna express that again. Um, I do want to, um, conclude by saying thank you again to, um, Kelsey and Tony for joining us, uh, and to ECG for sponsoring this podcast. I think, um, it's definitely, uh, been some good information for me, hopefully for all of you that are listening. Um, and I am sure that there will be more to come in terms of discussions and, and things from a H L a as we all navigate through what this looks like for us. So thank you again,
Speaker 1:Thank you for listening. If you enjoyed this episode, be sure to subscribe to ALA speaking of health law, wherever you get your podcasts to learn more about ALA and the educational resources available to the health law community, visit American health law.