Compliance & Best Practices: Medical Directorships and APP Supervision

Many of the hospitals and health systems that HSG consults with on provider compensation, employed practice operations, and hospital-based services arrangements lack a robust strategy and/or approach for managing and reviewing compliance related to physician agreements for medical directorships and advanced practice providers’ (APP) collaboration and supervision. Because these functions are typically outside of (or ancillary to) an agreement for clinical/direct patient care services (the primary focus of the agreement), they often do not receive the oversight and attention they deserve. Hospitals and health systems across the industry often, inappropriately, view these agreements as legitimate mechanisms through which the compensation of a physician, or group of physicians (if referring to a Professional Services Agreement (PSA) for clinical services) can be “padded.” A fair share of these organizations has admitted that the proliferation of these types of arrangements escaped the control of their management. One slightly frustrated health system executive quipped, “We’ve passed out medical directorships like candy.”

In this article, we will review the concerns and problems we’ve encountered through our consulting work with hospitals and health systems across the country. First, we will focus on some common missteps (what not to do), followed by a discussion of best practices for management and compliance connected with medical directorships and APP oversight programs and associated stipends.

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Best Practices: Medical Directorship Program

1. Educate and communicate
2. Provide tools and resources for time tracking and reporting
3. Have someone “close to the action” review submitted timesheets
4. Make sure timesheets reflect the job description
5. Periodically audit timesheets for accuracy, completeness, and relevance
6. Periodically review compensation rates for fair market value
7. Ensure no duplication or overlap with other agreements
8. Don’t use a medical directorship merely as a vehicle to increase compensation
9. Don’t use a medical directorship to obtain or encourage leadership in a practice

Best Practices: APP Oversight Program

1. Develop a robust policy that comprehensively defines the organization’s APP Oversight Program
2. Ensure that the APP collaboration/supervision agreements meet state requirements while explicitly outlining the organization’s program and expectations
3. Establish a standardized approach to APP collaboration/supervision stipends

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