The COVID-19 Effect on Physician/APP Arrangements and Compensation Plans

As the COVID-19 pandemic continues to evolve, hospitals and health system leaders are being proactive to ensure they have the physician and advanced practice provider (“APP”) coverage needed to provide sustainable care for a growing influx of coronavirus patients. In addition, health systems are being faced with unique issues on redeployment of physicians and APPs into different specialties and service lines and on the corresponding compensation issues that may result.

These matters always require analysis and proper documentation under the Federal Anti-Kickback, Stark and Civil Monetary Penalties Laws, and that still remains the case. While we await information as to whether any waivers will be available in this space, here are a few actions we are seeing health care leaders take with respect to provider arrangements as part of their COVID‑19 response:

Review current service, call, administrative and provider contracts, compensation plans and coverage capabilities, and develop immediate and long-term staffing and contingency plans;
Review current lease arrangements and evaluate and anticipate any potential defaults that may arise;
Forecast future needs and examine potential adjustments to service hours, shifts and coverage levels from providers;
Engage providers on anticipated adjustments to service hours, shifts and coverage levels to obtain physician buy-in on service level changes and strategies;
Develop COVID-19 specific coverage templates to address potential spikes in coverage needs;
Develop new/modified arrangements with providers as necessary to address potential immediate and long-term needs and/or excess provider capacity within identified specialties as well as default situations;
Approach other individual providers and local health care organizations (health systems, hospitals, medical groups, independent providers, ambulatory surgery centers) about potential cross-coverage and staffing options to address needs and/or excess provider capacity;
Re-purpose certain providers with excess capacity and expand their privileges as appropriate to meet coverage needs in high-demand service lines and to align with future contingency plans;
Analyze current contracts and compensation formulas to ensure they will be sustainable under immediate and long-term pandemic type coverage;
If current compensation plans are not sustainable, develop defensible arrangements that appropriately align with physician work effort and that meet current and evolving regulatory requirements;
Update contracts and compensation plans as necessary to implement immediate and long-term compensation models and staffing strategies;
Analyze available affiliation options regarding independent groups, each of which will require separate analysis; and
Stay up-to-date with evolving regulatory requirements, information and resources through Hall Render’s COVID-19 Resource Page and COVID-19 hotline (317‑429-3900).

As health care organizations take stock of their staffing and coverage arrangements under the actions outlined above, they should continue to be mindful of the above-referenced laws. As of the time of this alert, HHS and CMS have not provided a blanket waiver of these laws and their underlying regulatory requirements, but we do anticipate that some waivers and/or related guidance will be released in the next few days.

If you have any questions or would like additional information, please contact: