Hospital Support

Discussion in 'Pain Medicine' started by ampaphb, May 12, 2008.

  1. ampaphb

    ampaphb Interventional Spine

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    Ortho Group has enough sway with the community hospital that they are able to get them to cover salary of the interventionist they want to bring onboard. The hospital gains a tax advantage, I believe, by declaring there to be a need for pain management in the community.

    Does the hospital outright cut the group a check, or is it a loan that the group ultimately has to repay?
     
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  3. Tenesma

    Tenesma Senior Member

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    1) first thing that comes to mind: why can't the ortho group cover the doctor's salary - usually ortho groups have good income streams, and will likely make sure interventionist stays busy w/ cases... ?

    2) this could be a smart move to get a pain doctor to the area without worrying about financial risks...

    3) the hospital can do two things:

    - they can provide a one-time stipend as a recruitement incentive --- that amount is usually 50-150k (depending on size of hospital and estimated need)

    - they can provide a "guaranteed income" agreement close to the MGMA average starting salary for a pain dr for 1-2 years, that needs to be repaid out of collections, and whatever isn't repaid in first 1-2 years gets forgiven over time as long as doctor stays in town....

    either way, the agreement usually stipulates that if the dr leaves town within a certain time-frame then the stipend or "income" will have to be repaid in full...

    there are tax consequences as this check whether it is a stipend or a loan is considered earned income...

    4) the ortho group benefits by not having to front up any cash - and they can actually be very nefarious with how they do it...

    example: local GI group has the hospital "recruit" a new GI guy - the hospital provides the group 200k/year stipend - they pay him another 50k/year for a total package of 250k/yr - they then keep all of his collections over that amount - and if he stays in the area that loan gets forgiven.... so the GI group scores big time

    now you can block this hiring if it will compete with your practice - just go to that hospital and tell them that you heard they are recruiting an interventionist --- tell them that you will provide those services at the hospital - that would make their "community need" disappear in thin air - however, if the ortho group is persistent the hospital can pretend that there is still need for growth...
     
  4. ampaphb

    ampaphb Interventional Spine

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    so there is no cost to the group, and in the forgivable loan scenario you described, there is no cost to the interventionist if he stays the requisite 2-3 years, correct?

    If that is the case, shouldn't the interventionist's bonus be based on collections minus expenses from the first dime collected? Or is there any justification for the ortho group to keep anything prior to that (other than abject greed, obviously)?
     
  5. Tenesma

    Tenesma Senior Member

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    it's always greed that comes first... the ortho group can structure the deal anyway they want - it would probably better for the interventionist to COMPLETELY bypass the ortho-group and sign the deal directly with the hospital...
     
  6. ampaphb

    ampaphb Interventional Spine

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    OK, but other than greed, is there any legitimate reason the bonus shouldn't start from the first dime collected?
     
  7. tchoupdoc

    tchoupdoc attending

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  8. ampaphb

    ampaphb Interventional Spine

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    Actually, in the setting where the hospital supports the group's hire, they can not impose any non-compete as a result of Stark's provisions.

    As for "fronting" office space, staff, billing and collections, those are accounted for in the charge they impose for overhead

    Finally, the concept of "built in referral base" is one groups often tout. The truth of the matter is they typically get far more than they give. The patients remain in house, and are not at risk for being lost to anther practice. Ancillary revenues inure to the partners, rather than the employee. Plus, the partners typically demand their piece of flesh from your net collections. So is the built in referral base an advantage? Absolutely. but lets not kid ourselves, you are paying dearly for the privilege.
     
  9. tchoupdoc

    tchoupdoc attending

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  10. Tenesma

    Tenesma Senior Member

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    yes pain medicine can be considered a need... anything the hospital describes as a need is a need....

    stark does make it pretty hard for hospitals to sign non-compete clauses, but they have figured ways around it... for example, there is no non-compete in the loan agreement, but a big non-compete in the medical directorship they try to suck you into... etc... also the hospital is usually the big gorilla on the block, and typically the powerful groups have a lot of sway in that hospital - so if you piss off the hospital by leaving and taking business with you, you may (not always, but often) piss off the larger/powerful groups (in terms of referrals etc...)
     

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