How to Make Hospital Pain Practice Profitable. PLEASE HELP!!!!

[DrCabral3074]

I work for a private practice anesthesia group an exclusive contract for providing anesthesia services and staffing the pain department in a non-profit hospital. The group collects the professional fees and the hospital keeps the facility fees. The hospital only gives the group a stipend for the medical director which I believe is 80k. The pain department losses money for the group as it has to cover admin costs for staff for scheduling, obtain pre-authorization, and billing which is high overhead. To my understanding, the way to make this relationship profitable for the anesthesia group is to keep overhead at less than 5% and to have a "Pain Line of Service". The Pain Line of Service is so supposed to recapture the enormous facility fees given to the hospital without violating Stark and Anitikickpack laws. Does anyone have an idea how to negotiate for a Pain Line of Service and what is normally involved in the agreement?

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[deleted131481]

I don't know what Pain Line of Service is. But why doesn't the hospital pay admin costs/overhead? The hospital collects facility fees and pays 80k and that's it for them? How about dropping pain services and let the hospital hire someone and pay them on salary/wRVUs?

 

[gdub25]

You can set up a co-management agreement which is a legal structure to share in the overhead costs as well as profits of a service line in a hospital. Attached is a description of how such an arrangement is legally structured. This is the most complex way as well as the most profitable for the physician group. Currently you guys are getting screwed in a big way. There’s no possible way with your current setup that you guys could be successful from a financial standpoint. Also, not sure where you came up with the 5% overhead estimation. If you guys are simply billing pro fees you should be paying zero overhead. The hospital should be footing the bill for all staff, supplies, etc.

 

[drusso]

I work for a private practice anesthesia group an exclusive contract for providing anesthesia services and staffing the pain department in a non-profit hospital. The group collects the professional fees and the hospital keeps the facility fees. The hospital only gives the group a stipend for the medical director which I believe is 80k. The pain department losses money for the group as it has to cover admin costs for staff for scheduling, obtain pre-authorization, and billing which is high overhead. To my understanding, the way to make this relationship profitable for the anesthesia group is to keep overhead at less than 5% and to have a "Pain Line of Service". The Pain Line of Service is so supposed to recapture the enormous facility fees given to the hospital without violating Stark and Anitikickpack laws. Does anyone have an idea how to negotiate for a Pain Line of Service and what is normally involved in the agreement?

I'm confused. You know how much a facility is, right? You know how much your "enterprise value" is, right? Why are you letting the hospital be so greedy? Tell them that they are being greedy. You need a piece of that action. The Truth is that they can pay you whatever they want. Read that again...they can pay you whatever they want. It just requires "thinking outside the box."

 

[Ducttape]

the hospital is supposed to be paying for all administrative costs, from nurses, to techs, to secretaries, and all the OR costs.

if all you are collecting is professional fees, that is only the physician component. there is no room for your group to pay for any admin.


of course there is no way this situation would make money.

as a group, you should threaten to pull out unless they agree to cover everyone's salaries but the physicians.

or shut down the pain part completely and only provide anesthesia services.

 

[Ferrismonk]

The professional fee is for the professional (physician) services. All the "overhead" stuff you mentioned, staffing, supplies, schedulers, authorizations, etc is the responsibility of the hospital and comes from the super fat facility fee.

 

[callmeanesthesia]

You are getting screwed. They collect the facility fees but you have to pay for staff? Pull all your billing numbers for the past year, and calculate out the facility fee they have been paid for your work (ASIPP fee schedule I think has it, if not, the Medicare website). Now remember that’s just a baseline, since the private payors likely paid much more than Medicare. Just stare at that gargantuan number for a while in comparison to the pennies you and your group were paid.

At this point your best move is probably to just go to the hospital and tell them you are going to have to stop offering interventional pain services unless they provide full administrative support and a stipend. Make sure they know how much money they stand to lose, not only in facility fees but ancillary referrals for PT and imaging, as well as sending cases to the hospital’s spine surgeons. You might also quietly have your practice attorney see whether your exclusivity contract with the hospital would allow you to open a separate private practice, office-based pain practice so you have a little more leverage.

Your orders should go into the hospital’s EMR, be scheduled by the hospital’s schedulers, and billed by the hospital’s billers. Furthermore, they can give each of you doing interventional pain some sort of salary for providing those services. It can be structured on a per diem basis to avoid legal issues, just like I’m sure they pay you a call stipend when you take anesthesia call. As drusso points out, there’s plenty of money in that facility fee for them to do so.

 

[mid|ine]

I think you guys are missing what he is saying. His group is paying "staff for scheduling, obtain pre-authorization, and billing". They are not paying OR staff or hospital employees. The hospital is NOT allowed to pay for your PA team or billing.

 

[geauxg8rs]

I had a situation like this and it worked well financially for all. We paid for our own pro fee billing, malpractice, work comp, health insurance, retirement, etc.

We did not pay for any staff other than outside billing company. Prior auth done by hospital a d their staff. Hospital paid for receptionist who did scheduling

 

[Ferrismonk]

I think you guys are missing what he is saying. His group is paying "staff for scheduling, obtain pre-authorization, and billing". They are not paying OR staff or hospital employees. The hospital is NOT allowed to pay for your PA team or billing.

Private practice billing should be done separately, but they 100% can and should do scheduling and prior authorizations.

 

[mid|ine]

Private practice billing should be done separately, but they 100% can and should do scheduling and prior authorizations.

It may come down to who is ordering the injections.

I see patients, order the injections, and when I take my PP patients to the hospital we do the PA. We work our own schedule, but the hospital has its schedulers. Its a PITA, but its the price of a strong referral source.

 

[jsaul]

So you guys are saying that a hospital can pay my rent, employees, supplies and I keep 100npercent professional fees as long as I do cases in the hospital????? Sign me up for that

 

[Nodolor]

I think you guys are missing what he is saying. His group is paying "staff for scheduling, obtain pre-authorization, and billing". They are not paying OR staff or hospital employees. The hospital is NOT allowed to pay for your PA team or billing.

Hospital should be paying for these things

 

[Ferrismonk]

So you guys are saying that a hospital can pay my rent, employees, supplies and I keep 100npercent professional fees as long as I do cases in the hospital????? Sign me up for that

Um, yeah? As long as by "cases" you also mean all your E/M visits are done at the hospital.

My group covers a hospital based pain clinic. Our staff see's patients in the hospital's pain clinic and does procedures in the hospital's procedure suites. They provide the offices, the exam rooms, the procedure suites, drugs, needles, bandaids, nurses, rad techs, emr, custodial, etc etc etc. We bill our own professional fee and keep 100%.

 

[drusso]

I think you guys are missing what he is saying. His group is paying "staff for scheduling, obtain pre-authorization, and billing". They are not paying OR staff or hospital employees. The hospital is NOT allowed to pay for your PA team or billing.

They can't pay for it directly but ask the hospital CEO to "make it up" in other ways. These folks have a lot of leeway in how they can get things done. They only need to be properly motivated and incentivized to find a workable solution.

 

[lobelsteve]

I think you guys are missing what he is saying. His group is paying "staff for scheduling, obtain pre-authorization, and billing". They are not paying OR staff or hospital employees. The hospital is NOT allowed to pay for your PA team or billing.

What if you are a hospital employee?

 

[Ducttape]

I think you guys are missing what he is saying. His group is paying "staff for scheduling, obtain pre-authorization, and billing". They are not paying OR staff or hospital employees. The hospital is NOT allowed to pay for your PA team or billing.

It may come down to who is ordering the injections.

I see patients, order the injections, and when I take my PP patients to the hospital we do the PA. We work our own schedule, but the hospital has its schedulers. Its a PITA, but its the price of a strong referral source

if you have the choice of where to do your procedure as a nonexclusive entity, then yes, you should pay for your own secretaries and billers and coders and get auth, and essentially do pro bono work for the hospital.

if you do not, then it makes no sense for your hard earned professional fees to be used for this.

So you guys are saying that a hospital can pay my rent, employees, supplies and I keep 100npercent professional fees as long as I do cases in the hospital????? Sign me up for that

please remember how little your professional fees are compared to the facility fees

https://asipp.org/wp-content/uploads/2022PHOPD.pdf

examples:
$634 to the hospital for 62323 (lumbar epidural with imaging) Medicare.
you make $101.
that same injection in your office is $282.

stim trial? you get paid $413. the hospital gets $6326.

 

[BobLoblaw78]

I don't think there is any need for you to figure it out. Tell them it is not profitable and you don't want the pain clinic to lose money. You know they want you to be financially prudent and you should stop offering the service.

(They will look at the money they are going to lose and they will solve the problem for you)

 

[jsaul]

if you have the choice of where to do your procedure as a nonexclusive entity, then yes, you should pay for your own secretaries and billers and coders and get auth, and essentially do pro bono work for the hospital.

if you do not, then it makes no sense for your hard earned professional fees to be used for this.


please remember how little your professional fees are compared to the facility fees

https://asipp.org/wp-content/uploads/2022PHOPD.pdf

examples:
$634 to the hospital for 62323 (lumbar epidural with imaging) Medicare.
you make $101.
that same injection in your office is $282.

stim trial? you get paid $413. the hospital gets $6326.

i understand the difference in the fees
But I thought it would be a violation for the hospital to pay my rent, all my employees and cost of supplies in turn for me doing procedures at their facility. isnt that a stark violation

There was a hospital here that was paying the rent and overhead for an ortho doc and in return he had to do all the surgeries at their hospital and he can keep 100 percent professional fee. That setup got reported OIG and it was consequently shut down

 

[drusso]

i understand the difference in the fees
But I thought it would be a violation for the hospital to pay my rent, all my employees and cost of supplies in turn for me doing procedures at their facility. isnt that a stark violation

There was a hospital here that was paying the rent and overhead for an ortho doc and in return he had to do all the surgeries at their hospital and he can keep 100 percent professional fee. That setup got reported OIG and it was consequently shut down

Stark is a boogeyman. Yes, they can't pay you directly based upon volume, but they have many, many other ways to share the pie. If the Admin is properly motivated, they can pay you almost any way they want...Just ask for a "quality" stipend, directorship, or something.

The Stark Law and Anti-Kickback Statute Final Rules: Value-Based Arrangements | JD Supra

The Office of Inspector General (OIG) and the Centers for Medicare & Medicaid Services (CMS) jointly published final rules that expand upon and modify...

www.jdsupra.com

 

[Ferrismonk]

i understand the difference in the fees
But I thought it would be a violation for the hospital to pay my rent, all my employees and cost of supplies in turn for me doing procedures at their facility. isnt that a stark violation

There was a hospital here that was paying the rent and overhead for an ortho doc and in return he had to do all the surgeries at their hospital and he can keep 100 percent professional fee. That setup got reported OIG and it was consequently shut down

To be clear, the hospital cannot pay you for your rent, your employees, or cost of your supplies.

If the hospital is collecting a facility fee, they can, and should, pay for the building, the employees they hire to facilitate the physician work (including MA's, RN's billers, insurance authorization employees, etc), and all the equipment and supplies necessary to perform your work at their facility.

 

[drusso]

To be clear, the hospital cannot pay you for your rent, your employees, or cost of your supplies.

If the hospital is collecting a facility fee, they can, and should, pay for the building, the employees they hire to facilitate the physician work (including MA's, RN's billers, insurance authorization employees, etc), and all the equipment and supplies necessary to perform your work at their facility.

They can also give you a title, a directorship, consulting stipend, etc. Just need to ask them to "think outside the box."

 

[Ducttape]

i understand the difference in the fees
But I thought it would be a violation for the hospital to pay my rent, all my employees and cost of supplies in turn for me doing procedures at their facility. isnt that a stark violation

There was a hospital here that was paying the rent and overhead for an ortho doc and in return he had to do all the surgeries at their hospital and he can keep 100 percent professional fee. That setup got reported OIG and it was consequently shut down

to reiterated what ferrismonk posted - they don't "pay" the rent since you work out of their office space. the employees are hospital staff.

they collect the facility fee for the office appointments that you collect the professional fees for. you may have to pay for a biller/coder.

 

[mid|ine]

Hospitals around here are a lot less creative with directorships, etc. The juice isn't worth the squeeze for what the hospitals will do.

 

[drusso]

Hospitals around here are a lot less creative with directorships, etc. The juice isn't worth the squeeze for what the hospitals will do.

They shouldn't be so greedy about facility fees, physician enterprise value, and sharing the pie.

 

[mid|ine]

They shouldn't be so greedy about facility fees, physician enterprise value, and sharing the pie.

They would tell you their lawyers and the law are limiting them. I don't know what others are seeing.