Healthcare Financial Management
Frequently Asked Questions
Designing a physician compensation model starts with analyzing relevant productivity metrics, such as relative value units (RVUs), and possibly incorporating value-based incentives tied to quality outcomes and patient satisfaction. It’s then important to analyze different ways that overhead expenses can be allocated. Some physician owners may prefer to split all overhead evenly, while others prefer a system that allocates more overhead to physicians who utilize more resources. At the same time, a model must comply with Federal and State laws governing payment methodologies for physician owners. The result is a customized compensation formula that meets healthcare compliance requirements while providing appropriate performance incentives and a method of expense allocation.
A fractional CFO leads insurance payer contract negotiations by reviewing historical reimbursement data, benchmarking rates against standards for the specialty, and modeling the financial impacts of proposed terms. Key contract elements include reimbursement methodology, consideration of CPT carve-outs, payment timeliness, value-based care clauses, escalation for inflation, and claim filing requirements. The overall objectives are to preserve market-adjusted reimbursement rates over time, mitigate risks from underpayment or contract disputes, and avoid burdensome administrative processes.
A fractional CFO can help set pricing for bundled surgical cases by conducting a detailed cost analysis, including direct costs (material supplies and labor), indirect costs (overhead), and external provider costs (anesthesiology). It’s imperative to consider market benchmarks, variations in payer reimbursement levels, and speciality-specific risk adjustments. Pricing for bundles may include pre-surgical activities such as initial consultation, x-rays, and MRI, as well as post-surgical follow-up visits, durable medical equipment, and physical therapy.