November 25, 2025 • 35 mins
Shad Ritchie, Senior Consultant, Stroudwater Associates, and Stacy Gerber Ward, Shareholder, von Briesen & Roper, discuss the various aspects of a successful physician compensation redesign. They cover anchoring the compensation redesign in compliance, working with legal counsel, starting the compensation redesign process, determining fair market value, structuring and implementing an effective compensation plan, and longer-term governance issues. Sponsored by Stroudwater.
Watch this episode: https://www.youtube.com/watch?v=Ed4QfVsSApI
Learn more about Stroudwater: https://www.stroudwater.com/
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:04):
This episode of AHLA Speaking of Health Law is
sponsored by Stroudwater.
For more information, visitStroudwater.com.
SPEAKER_02 (00:17):
All right.
Well, I am excited to be here.
My name is Shad Ritchie.
I am with StroudwaterAssociates.
I'm a senior consultant withthat organization.
And we are really excited to behere today, and we're going to
be talking about best practiceswhen implementing physician
compensation redesign.
(00:38):
So with that, just a littlebrief introduction about myself.
I've been with Stroudwater foralmost two years now.
But with that said, 28 years inpractical healthcare
administration, I was ledmultiple physician networks.
And then I also have beenworking with physician
(01:02):
compensation since themid-1990s.
So with that said, there's a lotof history that I can bring to
the table.
And I'm excited to talk aboutthat today with Stacy.
With that said, I'll let Stacyintroduce herself.
SPEAKER_01 (01:18):
Hi, Shed.
Thanks so much for inviting meto be with you today.
I think we'll have lots of greatinformation to share.
As you mentioned, my name isStacy Gerber Ward.
I'm a shareholder with the lawfirm of Umbrezen and Roper.
I co-chair our firm's healthsection.
My practice involvesrepresenting hospitals and
(01:39):
health systems and other typesof providers.
I've worked with Stroudwater onseveral occasions regarding
physician compensationredesigns.
So really excited to be heretoday and have this conversation
with Chad.
So Shad, I'll get thingsstarted.
Maybe you can kick us off byjust talking a little bit about
(02:03):
how Stroudwater typically getsinvolved in a provider
compensation redesign for ahospital.
And kind of what are thehospitals looking for when they
come to you?
SPEAKER_02 (02:13):
You know, Stacey, that's a great question.
A lot of times, hospitals ororganizations sometimes they
don't even know that they need acompensation redesign.
Sometimes they hear Stroudwateror other consultants or uh legal
folks talking at conferences.
And it gets them thinking about,okay, well, what is, you know,
(02:36):
should we be looking at ourcompensation redesign plan or do
we have a plan?
And so a lot of times what wefind is that the um these
individual organizations willcall us as a consultant and
they'll say, okay, let's let'shave a quick um call to talk
about where we are with ourcompensation plan.
(02:57):
And a lot of times what we findis that they have some
hesitation or concern aroundregulatory risks based on maybe
some outdated models thatthey're particularly using.
Um sometimes the organizationsalso will say, you know, we have
(03:18):
we've developed a compensationplan, but we've had multiple
CEOs over the last five years,and those plans changed with
every CEO.
So there's no consistency.
And then one of the other thingsthat I think um we get asked
quite a bit is you know, how dowe align ourselves with the
(03:43):
organization goals?
And um, you know, from acompensation standpoint, because
sometimes organizations will payproviders a certain way, but it
doesn't align with the goals ofthe organization.
So I say all that because um weget asked um numerous questions
when we're talking aboutcompensation, as you can
(04:03):
probably imagine.
SPEAKER_01 (04:05):
I love that.
Um so you so there's not justone um, there's not just one
factor that that drives thesediscussions, but I take it often
these conversations uh lead intoregulatory compliance.
Is that right?
SPEAKER_02 (04:22):
All the time, yes.
And so, and I think we we maytalk about this um in a bit, but
you know, obviously when westart an analysis, you know, we
look at numbers and that umgives people pause on, you know,
where are we from a compliancestandpoint and regulatory
compliance.
SPEAKER_01 (04:40):
Right.
And and so maybe I'll just jumpin and just set the foundation
here, right?
I think we're talking about twodifferent sort of regulatory
structures that that at the verybaseline you're trying to ensure
that the hospital has compliancewith.
One is the exception for thestark exception uh for
(05:04):
employment, or the stark, thesecond one is the stark
exception for personal services,right?
And just making sure that thosesort of very fundamentally, the
the key elements of those twodifferent stark exceptions are
being met.
That is primarily you're lookingat fair market value and making
sure that the compensation isnot determined in any manner
(05:26):
that takes into account thevolume or value of the
referrals, right?
So is again as a sort of veryfoundational element.
Those are the key things youhave to keep in mind.
But then on top of it, you haveall these other goals that need
to be met.
SPEAKER_02 (05:38):
Oh, exactly.
You're spot on with alleverything you just said.
SPEAKER_01 (05:44):
So, Shad, do you um uh do you ever work with
attorneys when you're uh workstarting off these compensation
reviews?
SPEAKER_02 (05:54):
That is a great question because we have
multiple clients.
So Stroudwater historically isum focused on rural hospitals,
um, rural health clinics, um,those types.
Um obviously, we also work withurban organizations as well.
But um in a lot of someorganizations, they have
(06:16):
internal counsel and then theyhave external counsel.
So normally, if they haveinternal counsel, they are
usually part of theconversation, but um a lot of
times external counsel is not atthe table.
So I don't know how you feelabout if that is is a pro or a
con.
I don't know.
I'd be interested to hear.
SPEAKER_01 (06:36):
Well, I I um, you know, usually I'm getting a call
from a client about the sametime you're getting a call from
the client.
And I and I do think there'ssome benefit to starting these
engagements at the very leastunder an attorney client
privilege.
Um, so that would be having uheither internal counsel or
(06:57):
external counsel involved in theengagement of Stroudwater.
And I think the the benefit thata lawyer can provide, especially
at the early stages of thesereviews, is to prevent sort of
some unhappy surprises frombeing um unprotected.
Um and we'll probably talk aboutthis a little bit more in a
(07:17):
minute, right?
But sometimes these the initialdata gathering and compensation
review can reveal someuncomfortable realities about a
compensation structure.
And it's certainly to theclient's benefit if that initial
review at the very least is doneunder the attorney client
(07:38):
privilege to give someprotection if there are some
concerning results of thatinitial review.
So I like to encourage clientsto do it.
You might not need it all theway through the system all the
way through the process, but itcertainly can be helpful early
on.
So with that, maybe you couldtalk a little bit about how you
(08:00):
start the review process and howyou are, you know, as I
mentioned before, fair marketvalue is really sort of a key
consideration when you'relooking at compensation um
redesign.
So, how do you get the processstarted?
And then how are you working onfiguring out what fair market
value is for the compensationsystem?
SPEAKER_02 (08:22):
Yeah, that's a good question.
Um, so usually the clients are,you know, we've talked about the
reasons why they're calling us.
And so um they they are usuallynot um well versed in the
process.
And so what we do is we we tryto have a kickoff call and we
like to educate um the leadersof the organization as well as
(08:46):
maybe board members of why arewe going through this
engagement?
Why are we talking aboutcompensation redesign?
Um, there's reasons behind that,which we've talked a little bit
about.
But um usually the the firstthing that we do is obviously we
we educate, then we do a kickoffcall, we get data specifically
(09:08):
from the organizations, and kindof like what you talked about
with um attorney clientprivilege, we make sure that um
everything is sent to us in asecure portal because we would
not want to have any PHI outthere, obviously.
So um we when we when we ask fordata, they send everything to a
(09:29):
secure portal and we get umusually compensation information
from the provider as well asproductivity.
And that's what we start with.
And we benchmark basically thatagainst um uh using industry
standard benchmark data.
Uh we use MGMA sometimes, we useuh a blended approach, sometimes
(09:51):
with MGMA and AMGA.
So it just depends on thesituation, um, what approach we
use.
SPEAKER_01 (09:59):
So, Shad, sometimes I have encountered clients who
like to do this all themselves.
Um, they think, okay, well, Ihave the MGMA surveys and I can
just benchmark all of ourcompensation to the median for
the specialty that I'm dealingwith.
What do you think?
(10:19):
Is that a good idea?
SPEAKER_02 (10:21):
Oh gosh, you would not believe how many
organizations will call us andsay, uh, we set everybody's base
salary at the median of MGMA.
Well, that may be a goodstrategy for that market, and it
may not be a good strategy forthat market.
And most likely it's not,because it probably is not
(10:42):
aligned with the productivity ofthe providers.
And when we say providers, we'retalking about um physicians.
We, you know, we we work withphysicians, we work with nurse
practitioners, PAs, CRNAs, allof all of the above.
But when we take into account umfair market value, and when we
(11:02):
look at that, we have to, from avaluation approach, we have to
look at three approaches.
We have to look at the incomeapproach, we have to look at the
market approach, which is thatuse what you just referred to as
like using MGMA data.
And then lastly, we look at thecost approach.
Um, and that's a normal, so CMSsays um they don't tell you how
(11:26):
to value, but um that is betindustry best standard is to
consider all those approaches.
But most often the marketapproach is is what comes out as
the leading um indicator forfair market value.
SPEAKER_01 (11:42):
So and Shad, if a if a client is trying to sort of do
this on their own and just lookat the median according to the
MGMA, you know, are there otherbusiness factors that might
impact even whether the medianis fair market value?
SPEAKER_02 (12:03):
Gosh, I would say um a lot of times, and and I'm not
sure if I'm answering yourquestion, so make sure I'm I'm
answering your questioncorrectly.
But what we a lot of times findis that um, you know, they they
think they have a compensationproblem.
And a lot of times they do.
But um a lot of times it's notbecause the provider is
(12:26):
unproductive.
It could be that the operationsof the uh practice is um
inadequate, it's inefficient forthat particular provider.
And so what we find is that apractice assessment needs to be
done in addition to thecompensation redesign to see
what's causing there to be adiscrepancy in compensation
(12:49):
versus productivity.
SPEAKER_01 (12:50):
So I think what you're saying, right, is that
there you sometimes find there'sa misalignment or disalignment
between productivity andcompensation, right?
And and that might be justifiedbased on the type of provider,
based on the market, but itoften requires a deeper dive
(13:11):
because if you're at the 20thpercentile uh for productivity
and the 80th percentile forcompensation, you need to at
least be taking a look at that.
Oh is that is that fair?
SPEAKER_02 (13:23):
Yeah, that's what we call a red flag right there for
sure.
Anything that's a 20-pointdifference between your
compensation percentile and yourproductivity percentile, if
there's a 20-point difference,then that really gives us pause
to really need to researchfurther.
SPEAKER_01 (13:39):
And to be fair, right, it that might be
justified.
Again, you do work with a lot ofrural providers, right?
So you might be in a hospitalthat needs a number of
providers, uh, certain types ofproviders, and the volume isn't
there.
But but again, this is allthings that really should be
factored in by a consultant whocan render an opinion on fair
market value, right?
SPEAKER_02 (14:01):
Right, right.
SPEAKER_01 (14:03):
So so once you have all of that data gathered, um,
what are the factors that areyou're considering when
structuring a compensation modelfor a hospital?
SPEAKER_02 (14:18):
Yeah, so I'm glad you asked that question because
a lot of times um what what wereally like to do in the first
part of the process, and Ifailed to mention this earlier,
is we like to do interviewsspecifically with uh the
providers because um wesometimes we we get an answer
(14:40):
from the leadership and then weget a whole different answer
from the providers as to whatdrives them from a uh personal
standpoint is that are theyfinancially motivated?
Are they um just they love towork in rural communities, for
instance, um, because we workwith rural.
(15:02):
Um so a lot of factors willdrive that, but I will say
knowing and understanding thethought process of the providers
really guides us into what is agood uh compensation design
model for the organization.
But we also need to know uh onething we do ask organizations is
(15:23):
what is your five-year strategicplan?
We need to know that becausethat really will also drive
should should an organizationhave just straight salary or
should they incorporateincentives as well?
SPEAKER_01 (15:37):
So are you um is the outcome of of this process uh I
mean, do you typically recommendthat clients have and end up
with provider compensationplans, um, something in writing
uh to move this process forward?
SPEAKER_02 (16:00):
Yeah, that's our recommendation, yes.
So those organizations thatchoose to um accept our
recommendations, obviously we wepropose that a document be
created that basically outlineswhat is the compensation plan of
the organization.
(16:20):
That obviously not onlydocumentation is key, and I I
know you'll you may talk aboutthis um as well from an attorney
perspective, but just havingthat a document where a provider
can go and say, This is how Iget paid, and understanding it,
because a lot you would notbelieve how many providers we
(16:41):
have interviewed that have noidea how they get paid or why
they get paid the way they do.
And so having a document thatoutlines it from start to finish
really is beneficial for theorganization.
SPEAKER_01 (16:54):
So I love that, right?
I mean, because I think thatactually has sort of dual
benefits.
One, you're emphasizing, right,the importance of the provider,
him or herself understanding howthey're compensated.
And I think that provider buy-into that process is really
important.
I also think there's a reallykey regulatory consideration
(17:16):
when you're trying, when you'redocumenting the compensation
plan that, and that is ifthere's ever a concern that's
raised, right, the theorganization is able to provide
the compensation plan and thedata to show, you know, that
that the compensation plan hasbeen blessed by a consultant.
(17:36):
And here, we're complying withthat compensation plan.
So that does, it can provide alot of regulatory um protection
for a client if it's um everneeded.
Um so Shad, what are the whatare some of the factors that you
use that go into a compensationplan, right?
I mean, everybody traditionallythinks about work RVUs, right?
(17:59):
The the physician'sproductivity.
Are there other and you talked alittle about mission-driven.
Maybe you could give someexamples of those factors that
you can include in acompensation plan that are
mission-driven.
And are there otherconsiderations or other factors
that you use in structuring acompensation plan?
SPEAKER_02 (18:17):
Yeah, I think um in today's market, and hopefully
everybody that's on this call orlistening to the podcast is
going to relate to this, but weknow that um providers are gonna
be there's gonna be a largeshortage in the future.
Um, there's already shortages ina lot of um areas in the United
States.
(18:38):
So obviously, uh recruitment andretention is really key when
you're building a compensationdesign.
Um, one, you of course you wantto make sure it's um fair market
value, but you have to figureout what's going to incentivize
somebody to come to yourorganization.
It's not always about money, butmoney does help drive people to
(19:01):
your organization.
So I say all that to say that,you know, organizations will get
um uh what's the word I'mlooking for?
They will get um innovativesometimes and they will want to
incorporate not only a basesalary and a productivity model,
but they may also want toincorporate, you know, what are
(19:22):
some maybe sign-on bonuses couldthat are within fair market
value?
Maybe there's um housingallowances because the cost of
living is going up.
Um, there are people that areadding citizenship components,
um, and that's a whole notherconversation we can have.
But um there's a lot ofdifferent types of compensation
(19:44):
models.
There's not there's not one thatfits any type of organization.
Um, I think there's um bestpractices, but whatever works
when when I you mentionedmission, um, obviously it needs
to tie to the mission of theorganization and what is what is
that?
SPEAKER_01 (20:02):
Awesome.
Okay, so so now you you you takeall of those factors, right?
And Stroudwater comes up andsays to the organization, here's
the proposed compensation plan,right?
And the the leadership in thatorganization is you know buys
into that.
(20:23):
You've got your structure.
How do you actually implementthis, right?
This is you got a lot of peoplethat are involved.
Hospitals are complicatedorganizations.
So how do you how can youeffectively implement a change
in compensation uh as we'vediscussed?
SPEAKER_02 (20:40):
Yeah.
Um, I love your feedback on thisthis initial component.
Um, whenever we engage areengaged with a redesign project,
um, we really want someproviders at the table because
you really want to develop thattrust with the organizations and
maybe physician or providerleaders.
(21:02):
Um, so what we do is werecommend a compensation
committee, and it's differentfrom the board, and you can
probably explain a little bitabout that, but um, we
Stroudwater, we would not wantto engage with any client that
would not have some sort ofcompensation committee that we
could educate and help them helpus make um what what is the
(21:27):
design going to look like.
SPEAKER_01 (21:30):
So, and I would say sort of the collateral benefit,
right?
I I didn't mention this at thebeginning, but I'm a former
assistant U.S.
attorney and I did a lot ofwhistleblower litigation.
You know, I think the realbenefit to, well, one of the
benefits to what what you'rereferring to, and that's getting
some uh provider buy-in earlyon, is to sort of mitigate the
(21:51):
risk that there's awhistleblower, right?
I mean, these are these can bedifficult conversations, right?
The compensation plan may havecompensation going down, it may
have operational changes.
Providers like, you know, theythey like consistency and and so
change can be concerning.
(22:12):
And whenever you're in a climateor an ecosystem where there's
change going on, I think yourisk whistleblowers.
So what you're talking about interms of engaging providers in
the process is, you know, reallycritical.
They can also be frontlineadvocates if there are other
providers who are unhappy aboutthe proposed changes being made.
(22:36):
Um, again, this isn't you can'thave everybody on your
compensation committee, buthopefully part of the process
that you're talking about is tobuild some sort of internal
champions for for why um whythis process uh is necessary and
what the practical implicationsare going to be uh for the
(22:58):
organization and for theproviders.
So really an important step ofthe process.
Chad, does Stroudwater ever doum sort of education for the
providers in an organization asa whole?
What does that look like aboutthe compensation redesign
process?
SPEAKER_02 (23:17):
Yeah, so um we we really like to um at the onset
of the process really educate umthe organization as a whole.
So we we do not mind, and thiswould be best practice for my
opinion, is that you know, thewhether it's the physician
leaders and the hospital ororgan organization executives,
(23:41):
they at least, and maybe some ofthe board members need to be
educated on why is a redesignnecessary.
But I don't disagree that it'sreally beneficial if you have a
physician network, let's educateeverybody at one time because
they're gonna be they're gonnabe asking questions.
And it's never a it's it's neveran easy conversation when you're
(24:05):
talking to a provider aboutcompensation and their money.
And so, yeah, so you really wantto educate them, and it's easier
sometimes coming from a thirdparty versus a CEO or maybe
their legal counsel and saying,well, this is why we have to do
it, but sometimes it's easierfor you know a third party to
educate them.
SPEAKER_01 (24:26):
And Shev, do you ever provide board education,
board of director education onthe compensation redesign?
And when when when might that beimportant?
SPEAKER_02 (24:36):
Yeah, we really like to do that also at the onset
because a lot of board membersreally don't understand us.
It's you would not believe thenumber of organizations we go in
where the board members are, youknow, members of the community
and they don't really know whatthey don't know.
And so the CEO drives day-to-dayoperations and that that may
(25:00):
work fine.
But from my understanding, aboard member needs to understand
and be aware of everythingthat's going on in their
organization, especiallycompensation designs.
SPEAKER_01 (25:13):
And I would say from a practical perspective, you
know, sometimes in smallercommunities, especially, it's
not unheard of for a provider toactually call a board member and
say, hey, what are you guysdoing?
Right.
And and much, and again, to mypoint earlier, trying to build
organizational champions of theprocess.
(25:34):
If you can educate the board onthe need for the compensation
redesign, uh, the and what thecompensation redesign is going
to look like and what thebenefits of the redesign are,
again, you're you're buildingchampions that that may they'll
they'll interact for sure withthe community, but they also
(25:55):
potentially could interact withproviders that have questions or
concerns about the compensationredesign.
So I I really advocate forreally strong board education in
this process.
Um I think it can only paylong-term dividends.
Um so once you've sort of rolledout your your plan um and
(26:21):
started the implementationprocess, can you talk about some
of the longer-term governanceissues uh that a hospital will
need to consider to maintain uhthe compensation redesign
long-term?
SPEAKER_02 (26:39):
Yeah, so hopefully when when organizations are
going through this redesign,they're they're really being
aware of making decisions that'sgonna have a long-term impact on
what this design is gonna be.
And what I what I mean by thatis that it's not gonna change
within a year.
It's gonna be something that youcan build on.
(26:59):
So, this new compensationredesign that you've just built,
you've spent a lot of timeworking on it.
And redesign doesn't happenovernight.
It usually takes between sixmonths to a year to really get
to a good point.
Um, so with that said, you'vegot to um make sure that
whatever you develop is gonna besustainable and you can build
(27:20):
off of it.
So, what we recommend is thatyou know you you carve out
whether you start with basesalary production and then you
can add maybe quality metrics ifyour um EMR is able to produce
those kind of reports.
And I won't go into all of thosedetails, but obviously you
(27:42):
wanted something that's gonna besustainable.
And when I say sustainable too,you need to make sure that that
um compensation committee umalso stays active because I feel
like um if that after theredesign, if that compensation
committee disbands, then umpeople are not gonna know what's
(28:04):
going on and what the next stepscould be.
So that's our recommendation isthat there continues to be
communication.
If you don't communicate withyour providers and the folks in
your organization, then a lot ofthese redesigns are not going to
be successful long term.
SPEAKER_01 (28:21):
I guess I would add a comment, building on the
discussion we had about theboard's involvement, you know,
one of the things for I thinklong-term governance that I
encourage my clients to thinkabout is, you know, how how what
role does the board um what dowhat role, ongoing role, does
(28:43):
the board play?
Or in some cases, right, boardshave compensation subcommittees
that could provide someoversight.
You know, I think um it's hardto in any compensation model
take into account everysituation that's going to
happen, right?
So you may have somecompensation arrangements that
(29:03):
kind of fall outside of, youknow, the sort of norms, you
know, it might fallsignificantly above the median.
And so, you know, I like tobuild in uh to these to the
written compensation plans, youknow, some benchmarks to engage
the board for review ofcompensation um arrangements
(29:24):
that go over and above certainbenchmarks.
So, for example, and again,there's nothing magic about
this, but if you're proposingtotal compensation that exceeds
the 75th percentile, that mightbe a good time for uh the
leadership to go back to theboard or the board subcommittee
that's dealing withcompensation, right, to get the
(29:46):
board's approval on thosearrangements.
I think that helps ensure youknow um uh the compliance with
the IRS intermediate sanctionsrules and frankly it's just a
good governance practice.
So something Another strategythat I think can be considered
for sort of long-term governanceconsistency for these
(30:09):
compensation plans.
SPEAKER_02 (30:12):
And I'm assuming those would be documented with
meeting minutes.
And so obviously you would havethe documentation should
anything occur.
SPEAKER_01 (30:22):
A hundred percent, yes.
The board minutes are oftenharder to draft than you would
think.
But yes, good board minutes arereally critical here.
So that the board, right?
Because again, if you'reconsidering a sort of above
average compensationarrangement, there certainly
could be business factors thatsupport that type of
(30:43):
compensation arrangement.
And again, this gives theorganization another opportunity
to document what thoseconsiderations are.
Again, one great example is arural provider that has
difficulty recruiting in aparticular specialty, right?
If you're trying to recruit in aspecialist and there just aren't
(31:04):
a lot in your in your region orin your state, um, and you may
have to pay a little bit more inorder to recruit somebody like
that into your organization.
And so those are all things thatcan be taken account of and
documented as part of this boardcommittee documentation.
So another strategy to beconsidered in all this.
(31:25):
Um well Shad, that that I thinkthat we've covered a lot of
grounds here.
Are there any sort of sort of uhuh uh comments you want to make
and to to wrap all this up?
SPEAKER_02 (31:37):
I think the one thing that I probably failed to
talk about too is, you know, asyou're designing these
compensation plans, um,obviously you want to make sure
it's fair and equitable acrossyour providers.
Um, I feel like that umsometimes, you know, like you
just said, there might be acertain specialty that the CEO
(31:59):
or a board member may think, ohmy goodness, we need a urologist
here, or we need an ENTspecialist here.
And sometimes they'll go aboveand beyond from a compensation
perspective to get thoseindividuals.
But it really um thecompensation plan design should
be something that is fair andequitable, equitable across the
(32:22):
board for all your providers.
So that is something to thinkabout too.
Um obviously, sometimes you dohave to pay more for a
particular provider, but um youwant to make sure that it's um
within reason.
SPEAKER_01 (32:36):
Right.
And that it's you can articulatethose reasons to the other
providers, right?
So um, and again, having gooddocumentation of those.
SPEAKER_02 (32:48):
Um and as we know, they always providers always
talk.
SPEAKER_01 (32:52):
So providers always talk, yes, indeed.
SPEAKER_02 (32:55):
So that is that does happen, and they will find out
that the orthopedic surgeonmakes X amount, and um, then
they'll wonder why they don'tmake that much.
SPEAKER_01 (33:07):
I I will just my my I'll say my wrap-up comment
about this is that indeed thatis this often the scenario that
can lead to a whistleblower.
In fact, we had a uh a Wisconsinum Stark case that was settled a
few years back for$10 million,with with frankly just that
(33:30):
scenario.
Um, so again, I think reallyimportant are building your
internal champions,transparency, consistency, and
really strong documentation uh,from my perspective, are all
really important factors asyou're as you're going through
this process.
SPEAKER_02 (33:47):
Yeah.
So and the last thing I'll saytoo is that you know, I
mentioned earlier that acompensation redesign does not
happen overnight.
It it really takes six months to12 months.
Sometimes provide organizationsare going through an EMR
transition as well.
We definitely don't suggest evergoing to do a compensation
(34:10):
redesign during an EMR change.
SPEAKER_01 (34:13):
But um there's a lot of how to make providers really
unhappy.
SPEAKER_02 (34:17):
Oh, yes, exactly.
The first time you give themwrong data, they're not gonna um
they're they're not gonnabelieve anything.
So definitely make sure that youknow when you start this
process, make sure you know whatthe barriers could be.
Um and just make sure that theyou set a good timeline, you
(34:37):
have consistent uhcommunication, and um always
make sure that uh you youutilize the right um individuals
to make sure you're at fairmarket value.
SPEAKER_01 (34:50):
Right.
Well, that's the I think that'sgreat advice.
Um and uh Shad, thanks so muchfor inviting me to participate
with you today.
This has been a lot of fun, andum we'll we'll be talking to
you.
SPEAKER_02 (35:06):
Exactly.
Well, good luck to everybody ifthey're doing compensation
redesigns.
And thank you so much.
SPEAKER_01 (35:13):
All right, take care.
SPEAKER_00 (35:19):
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(35:42):
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SPEAKER_02 (00:17):
All right.
Well, I am excited to be here.
My name is Shad Ritchie.
I am with StroudwaterAssociates.
I'm a senior consultant withthat organization.
And we are really excited to behere today, and we're going to
be talking about best practiceswhen implementing physician
compensation redesign.
(00:38):
So with that, just a littlebrief introduction about myself.
I've been with Stroudwater foralmost two years now.
But with that said, 28 years inpractical healthcare
administration, I was ledmultiple physician networks.
And then I also have beenworking with physician
(01:02):
compensation since themid-1990s.
So with that said, there's a lotof history that I can bring to
the table.
And I'm excited to talk aboutthat today with Stacy.
With that said, I'll let Stacyintroduce herself.
SPEAKER_01 (01:18):
Hi, Shed.
Thanks so much for inviting meto be with you today.
I think we'll have lots of greatinformation to share.
As you mentioned, my name isStacy Gerber Ward.
I'm a shareholder with the lawfirm of Umbrezen and Roper.
I co-chair our firm's healthsection.
My practice involvesrepresenting hospitals and
(01:39):
health systems and other typesof providers.
I've worked with Stroudwater onseveral occasions regarding
physician compensationredesigns.
So really excited to be heretoday and have this conversation
with Chad.
So Shad, I'll get thingsstarted.
Maybe you can kick us off byjust talking a little bit about
(02:03):
how Stroudwater typically getsinvolved in a provider
compensation redesign for ahospital.
And kind of what are thehospitals looking for when they
come to you?
SPEAKER_02 (02:13):
You know, Stacey, that's a great question.
A lot of times, hospitals ororganizations sometimes they
don't even know that they need acompensation redesign.
Sometimes they hear Stroudwateror other consultants or uh legal
folks talking at conferences.
And it gets them thinking about,okay, well, what is, you know,
(02:36):
should we be looking at ourcompensation redesign plan or do
we have a plan?
And so a lot of times what wefind is that the um these
individual organizations willcall us as a consultant and
they'll say, okay, let's let'shave a quick um call to talk
about where we are with ourcompensation plan.
(02:57):
And a lot of times what we findis that they have some
hesitation or concern aroundregulatory risks based on maybe
some outdated models thatthey're particularly using.
Um sometimes the organizationsalso will say, you know, we have
(03:18):
we've developed a compensationplan, but we've had multiple
CEOs over the last five years,and those plans changed with
every CEO.
So there's no consistency.
And then one of the other thingsthat I think um we get asked
quite a bit is you know, how dowe align ourselves with the
(03:43):
organization goals?
And um, you know, from acompensation standpoint, because
sometimes organizations will payproviders a certain way, but it
doesn't align with the goals ofthe organization.
So I say all that because um weget asked um numerous questions
when we're talking aboutcompensation, as you can
(04:03):
probably imagine.
SPEAKER_01 (04:05):
I love that.
Um so you so there's not justone um, there's not just one
factor that that drives thesediscussions, but I take it often
these conversations uh lead intoregulatory compliance.
Is that right?
SPEAKER_02 (04:22):
All the time, yes.
And so, and I think we we maytalk about this um in a bit, but
you know, obviously when westart an analysis, you know, we
look at numbers and that umgives people pause on, you know,
where are we from a compliancestandpoint and regulatory
compliance.
SPEAKER_01 (04:40):
Right.
And and so maybe I'll just jumpin and just set the foundation
here, right?
I think we're talking about twodifferent sort of regulatory
structures that that at the verybaseline you're trying to ensure
that the hospital has compliancewith.
One is the exception for thestark exception uh for
(05:04):
employment, or the stark, thesecond one is the stark
exception for personal services,right?
And just making sure that thosesort of very fundamentally, the
the key elements of those twodifferent stark exceptions are
being met.
That is primarily you're lookingat fair market value and making
sure that the compensation isnot determined in any manner
(05:26):
that takes into account thevolume or value of the
referrals, right?
So is again as a sort of veryfoundational element.
Those are the key things youhave to keep in mind.
But then on top of it, you haveall these other goals that need
to be met.
SPEAKER_02 (05:38):
Oh, exactly.
You're spot on with alleverything you just said.
SPEAKER_01 (05:44):
So, Shad, do you um uh do you ever work with
attorneys when you're uh workstarting off these compensation
reviews?
SPEAKER_02 (05:54):
That is a great question because we have
multiple clients.
So Stroudwater historically isum focused on rural hospitals,
um, rural health clinics, um,those types.
Um obviously, we also work withurban organizations as well.
But um in a lot of someorganizations, they have
(06:16):
internal counsel and then theyhave external counsel.
So normally, if they haveinternal counsel, they are
usually part of theconversation, but um a lot of
times external counsel is not atthe table.
So I don't know how you feelabout if that is is a pro or a
con.
I don't know.
I'd be interested to hear.
SPEAKER_01 (06:36):
Well, I I um, you know, usually I'm getting a call
from a client about the sametime you're getting a call from
the client.
And I and I do think there'ssome benefit to starting these
engagements at the very leastunder an attorney client
privilege.
Um, so that would be having uheither internal counsel or
(06:57):
external counsel involved in theengagement of Stroudwater.
And I think the the benefit thata lawyer can provide, especially
at the early stages of thesereviews, is to prevent sort of
some unhappy surprises frombeing um unprotected.
Um and we'll probably talk aboutthis a little bit more in a
(07:17):
minute, right?
But sometimes these the initialdata gathering and compensation
review can reveal someuncomfortable realities about a
compensation structure.
And it's certainly to theclient's benefit if that initial
review at the very least is doneunder the attorney client
(07:38):
privilege to give someprotection if there are some
concerning results of thatinitial review.
So I like to encourage clientsto do it.
You might not need it all theway through the system all the
way through the process, but itcertainly can be helpful early
on.
So with that, maybe you couldtalk a little bit about how you
(08:00):
start the review process and howyou are, you know, as I
mentioned before, fair marketvalue is really sort of a key
consideration when you'relooking at compensation um
redesign.
So, how do you get the processstarted?
And then how are you working onfiguring out what fair market
value is for the compensationsystem?
SPEAKER_02 (08:22):
Yeah, that's a good question.
Um, so usually the clients are,you know, we've talked about the
reasons why they're calling us.
And so um they they are usuallynot um well versed in the
process.
And so what we do is we we tryto have a kickoff call and we
like to educate um the leadersof the organization as well as
(08:46):
maybe board members of why arewe going through this
engagement?
Why are we talking aboutcompensation redesign?
Um, there's reasons behind that,which we've talked a little bit
about.
But um usually the the firstthing that we do is obviously we
we educate, then we do a kickoffcall, we get data specifically
(09:08):
from the organizations, and kindof like what you talked about
with um attorney clientprivilege, we make sure that um
everything is sent to us in asecure portal because we would
not want to have any PHI outthere, obviously.
So um we when we when we ask fordata, they send everything to a
(09:29):
secure portal and we get umusually compensation information
from the provider as well asproductivity.
And that's what we start with.
And we benchmark basically thatagainst um uh using industry
standard benchmark data.
Uh we use MGMA sometimes, we useuh a blended approach, sometimes
(09:51):
with MGMA and AMGA.
So it just depends on thesituation, um, what approach we
use.
SPEAKER_01 (09:59):
So, Shad, sometimes I have encountered clients who
like to do this all themselves.
Um, they think, okay, well, Ihave the MGMA surveys and I can
just benchmark all of ourcompensation to the median for
the specialty that I'm dealingwith.
What do you think?
(10:19):
Is that a good idea?
SPEAKER_02 (10:21):
Oh gosh, you would not believe how many
organizations will call us andsay, uh, we set everybody's base
salary at the median of MGMA.
Well, that may be a goodstrategy for that market, and it
may not be a good strategy forthat market.
And most likely it's not,because it probably is not
(10:42):
aligned with the productivity ofthe providers.
And when we say providers, we'retalking about um physicians.
We, you know, we we work withphysicians, we work with nurse
practitioners, PAs, CRNAs, allof all of the above.
But when we take into account umfair market value, and when we
(11:02):
look at that, we have to, from avaluation approach, we have to
look at three approaches.
We have to look at the incomeapproach, we have to look at the
market approach, which is thatuse what you just referred to as
like using MGMA data.
And then lastly, we look at thecost approach.
Um, and that's a normal, so CMSsays um they don't tell you how
(11:26):
to value, but um that is betindustry best standard is to
consider all those approaches.
But most often the marketapproach is is what comes out as
the leading um indicator forfair market value.
SPEAKER_01 (11:42):
So and Shad, if a if a client is trying to sort of do
this on their own and just lookat the median according to the
MGMA, you know, are there otherbusiness factors that might
impact even whether the medianis fair market value?
SPEAKER_02 (12:03):
Gosh, I would say um a lot of times, and and I'm not
sure if I'm answering yourquestion, so make sure I'm I'm
answering your questioncorrectly.
But what we a lot of times findis that um, you know, they they
think they have a compensationproblem.
And a lot of times they do.
But um a lot of times it's notbecause the provider is
(12:26):
unproductive.
It could be that the operationsof the uh practice is um
inadequate, it's inefficient forthat particular provider.
And so what we find is that apractice assessment needs to be
done in addition to thecompensation redesign to see
what's causing there to be adiscrepancy in compensation
(12:49):
versus productivity.
SPEAKER_01 (12:50):
So I think what you're saying, right, is that
there you sometimes find there'sa misalignment or disalignment
between productivity andcompensation, right?
And and that might be justifiedbased on the type of provider,
based on the market, but itoften requires a deeper dive
(13:11):
because if you're at the 20thpercentile uh for productivity
and the 80th percentile forcompensation, you need to at
least be taking a look at that.
Oh is that is that fair?
SPEAKER_02 (13:23):
Yeah, that's what we call a red flag right there for
sure.
Anything that's a 20-pointdifference between your
compensation percentile and yourproductivity percentile, if
there's a 20-point difference,then that really gives us pause
to really need to researchfurther.
SPEAKER_01 (13:39):
And to be fair, right, it that might be
justified.
Again, you do work with a lot ofrural providers, right?
So you might be in a hospitalthat needs a number of
providers, uh, certain types ofproviders, and the volume isn't
there.
But but again, this is allthings that really should be
factored in by a consultant whocan render an opinion on fair
market value, right?
SPEAKER_02 (14:01):
Right, right.
SPEAKER_01 (14:03):
So so once you have all of that data gathered, um,
what are the factors that areyou're considering when
structuring a compensation modelfor a hospital?
SPEAKER_02 (14:18):
Yeah, so I'm glad you asked that question because
a lot of times um what what wereally like to do in the first
part of the process, and Ifailed to mention this earlier,
is we like to do interviewsspecifically with uh the
providers because um wesometimes we we get an answer
(14:40):
from the leadership and then weget a whole different answer
from the providers as to whatdrives them from a uh personal
standpoint is that are theyfinancially motivated?
Are they um just they love towork in rural communities, for
instance, um, because we workwith rural.
(15:02):
Um so a lot of factors willdrive that, but I will say
knowing and understanding thethought process of the providers
really guides us into what is agood uh compensation design
model for the organization.
But we also need to know uh onething we do ask organizations is
(15:23):
what is your five-year strategicplan?
We need to know that becausethat really will also drive
should should an organizationhave just straight salary or
should they incorporateincentives as well?
SPEAKER_01 (15:37):
So are you um is the outcome of of this process uh I
mean, do you typically recommendthat clients have and end up
with provider compensationplans, um, something in writing
uh to move this process forward?
SPEAKER_02 (16:00):
Yeah, that's our recommendation, yes.
So those organizations thatchoose to um accept our
recommendations, obviously we wepropose that a document be
created that basically outlineswhat is the compensation plan of
the organization.
(16:20):
That obviously not onlydocumentation is key, and I I
know you'll you may talk aboutthis um as well from an attorney
perspective, but just havingthat a document where a provider
can go and say, This is how Iget paid, and understanding it,
because a lot you would notbelieve how many providers we
(16:41):
have interviewed that have noidea how they get paid or why
they get paid the way they do.
And so having a document thatoutlines it from start to finish
really is beneficial for theorganization.
SPEAKER_01 (16:54):
So I love that, right?
I mean, because I think thatactually has sort of dual
benefits.
One, you're emphasizing, right,the importance of the provider,
him or herself understanding howthey're compensated.
And I think that provider buy-into that process is really
important.
I also think there's a reallykey regulatory consideration
(17:16):
when you're trying, when you'redocumenting the compensation
plan that, and that is ifthere's ever a concern that's
raised, right, the theorganization is able to provide
the compensation plan and thedata to show, you know, that
that the compensation plan hasbeen blessed by a consultant.
(17:36):
And here, we're complying withthat compensation plan.
So that does, it can provide alot of regulatory um protection
for a client if it's um everneeded.
Um so Shad, what are the whatare some of the factors that you
use that go into a compensationplan, right?
I mean, everybody traditionallythinks about work RVUs, right?
(17:59):
The the physician'sproductivity.
Are there other and you talked alittle about mission-driven.
Maybe you could give someexamples of those factors that
you can include in acompensation plan that are
mission-driven.
And are there otherconsiderations or other factors
that you use in structuring acompensation plan?
SPEAKER_02 (18:17):
Yeah, I think um in today's market, and hopefully
everybody that's on this call orlistening to the podcast is
going to relate to this, but weknow that um providers are gonna
be there's gonna be a largeshortage in the future.
Um, there's already shortages ina lot of um areas in the United
States.
(18:38):
So obviously, uh recruitment andretention is really key when
you're building a compensationdesign.
Um, one, you of course you wantto make sure it's um fair market
value, but you have to figureout what's going to incentivize
somebody to come to yourorganization.
It's not always about money, butmoney does help drive people to
(19:01):
your organization.
So I say all that to say that,you know, organizations will get
um uh what's the word I'mlooking for?
They will get um innovativesometimes and they will want to
incorporate not only a basesalary and a productivity model,
but they may also want toincorporate, you know, what are
(19:22):
some maybe sign-on bonuses couldthat are within fair market
value?
Maybe there's um housingallowances because the cost of
living is going up.
Um, there are people that areadding citizenship components,
um, and that's a whole notherconversation we can have.
But um there's a lot ofdifferent types of compensation
(19:44):
models.
There's not there's not one thatfits any type of organization.
Um, I think there's um bestpractices, but whatever works
when when I you mentionedmission, um, obviously it needs
to tie to the mission of theorganization and what is what is
that?
SPEAKER_01 (20:02):
Awesome.
Okay, so so now you you you takeall of those factors, right?
And Stroudwater comes up andsays to the organization, here's
the proposed compensation plan,right?
And the the leadership in thatorganization is you know buys
into that.
(20:23):
You've got your structure.
How do you actually implementthis, right?
This is you got a lot of peoplethat are involved.
Hospitals are complicatedorganizations.
So how do you how can youeffectively implement a change
in compensation uh as we'vediscussed?
SPEAKER_02 (20:40):
Yeah.
Um, I love your feedback on thisthis initial component.
Um, whenever we engage areengaged with a redesign project,
um, we really want someproviders at the table because
you really want to develop thattrust with the organizations and
maybe physician or providerleaders.
(21:02):
Um, so what we do is werecommend a compensation
committee, and it's differentfrom the board, and you can
probably explain a little bitabout that, but um, we
Stroudwater, we would not wantto engage with any client that
would not have some sort ofcompensation committee that we
could educate and help them helpus make um what what is the
(21:27):
design going to look like.
SPEAKER_01 (21:30):
So, and I would say sort of the collateral benefit,
right?
I I didn't mention this at thebeginning, but I'm a former
assistant U.S.
attorney and I did a lot ofwhistleblower litigation.
You know, I think the realbenefit to, well, one of the
benefits to what what you'rereferring to, and that's getting
some uh provider buy-in earlyon, is to sort of mitigate the
(21:51):
risk that there's awhistleblower, right?
I mean, these are these can bedifficult conversations, right?
The compensation plan may havecompensation going down, it may
have operational changes.
Providers like, you know, theythey like consistency and and so
change can be concerning.
(22:12):
And whenever you're in a climateor an ecosystem where there's
change going on, I think yourisk whistleblowers.
So what you're talking about interms of engaging providers in
the process is, you know, reallycritical.
They can also be frontlineadvocates if there are other
providers who are unhappy aboutthe proposed changes being made.
(22:36):
Um, again, this isn't you can'thave everybody on your
compensation committee, buthopefully part of the process
that you're talking about is tobuild some sort of internal
champions for for why um whythis process uh is necessary and
what the practical implicationsare going to be uh for the
(22:58):
organization and for theproviders.
So really an important step ofthe process.
Chad, does Stroudwater ever doum sort of education for the
providers in an organization asa whole?
What does that look like aboutthe compensation redesign
process?
SPEAKER_02 (23:17):
Yeah, so um we we really like to um at the onset
of the process really educate umthe organization as a whole.
So we we do not mind, and thiswould be best practice for my
opinion, is that you know, thewhether it's the physician
leaders and the hospital ororgan organization executives,
(23:41):
they at least, and maybe some ofthe board members need to be
educated on why is a redesignnecessary.
But I don't disagree that it'sreally beneficial if you have a
physician network, let's educateeverybody at one time because
they're gonna be they're gonnabe asking questions.
And it's never a it's it's neveran easy conversation when you're
(24:05):
talking to a provider aboutcompensation and their money.
And so, yeah, so you really wantto educate them, and it's easier
sometimes coming from a thirdparty versus a CEO or maybe
their legal counsel and saying,well, this is why we have to do
it, but sometimes it's easierfor you know a third party to
educate them.
SPEAKER_01 (24:26):
And Shev, do you ever provide board education,
board of director education onthe compensation redesign?
And when when when might that beimportant?
SPEAKER_02 (24:36):
Yeah, we really like to do that also at the onset
because a lot of board membersreally don't understand us.
It's you would not believe thenumber of organizations we go in
where the board members are, youknow, members of the community
and they don't really know whatthey don't know.
And so the CEO drives day-to-dayoperations and that that may
(25:00):
work fine.
But from my understanding, aboard member needs to understand
and be aware of everythingthat's going on in their
organization, especiallycompensation designs.
SPEAKER_01 (25:13):
And I would say from a practical perspective, you
know, sometimes in smallercommunities, especially, it's
not unheard of for a provider toactually call a board member and
say, hey, what are you guysdoing?
Right.
And and much, and again, to mypoint earlier, trying to build
organizational champions of theprocess.
(25:34):
If you can educate the board onthe need for the compensation
redesign, uh, the and what thecompensation redesign is going
to look like and what thebenefits of the redesign are,
again, you're you're buildingchampions that that may they'll
they'll interact for sure withthe community, but they also
(25:55):
potentially could interact withproviders that have questions or
concerns about the compensationredesign.
So I I really advocate forreally strong board education in
this process.
Um I think it can only paylong-term dividends.
Um so once you've sort of rolledout your your plan um and
(26:21):
started the implementationprocess, can you talk about some
of the longer-term governanceissues uh that a hospital will
need to consider to maintain uhthe compensation redesign
long-term?
SPEAKER_02 (26:39):
Yeah, so hopefully when when organizations are
going through this redesign,they're they're really being
aware of making decisions that'sgonna have a long-term impact on
what this design is gonna be.
And what I what I mean by thatis that it's not gonna change
within a year.
It's gonna be something that youcan build on.
(26:59):
So, this new compensationredesign that you've just built,
you've spent a lot of timeworking on it.
And redesign doesn't happenovernight.
It usually takes between sixmonths to a year to really get
to a good point.
Um, so with that said, you'vegot to um make sure that
whatever you develop is gonna besustainable and you can build
(27:20):
off of it.
So, what we recommend is thatyou know you you carve out
whether you start with basesalary production and then you
can add maybe quality metrics ifyour um EMR is able to produce
those kind of reports.
And I won't go into all of thosedetails, but obviously you
(27:42):
wanted something that's gonna besustainable.
And when I say sustainable too,you need to make sure that that
um compensation committee umalso stays active because I feel
like um if that after theredesign, if that compensation
committee disbands, then umpeople are not gonna know what's
(28:04):
going on and what the next stepscould be.
So that's our recommendation isthat there continues to be
communication.
If you don't communicate withyour providers and the folks in
your organization, then a lot ofthese redesigns are not going to
be successful long term.
SPEAKER_01 (28:21):
I guess I would add a comment, building on the
discussion we had about theboard's involvement, you know,
one of the things for I thinklong-term governance that I
encourage my clients to thinkabout is, you know, how how what
role does the board um what dowhat role, ongoing role, does
(28:43):
the board play?
Or in some cases, right, boardshave compensation subcommittees
that could provide someoversight.
You know, I think um it's hardto in any compensation model
take into account everysituation that's going to
happen, right?
So you may have somecompensation arrangements that
(29:03):
kind of fall outside of, youknow, the sort of norms, you
know, it might fallsignificantly above the median.
And so, you know, I like tobuild in uh to these to the
written compensation plans, youknow, some benchmarks to engage
the board for review ofcompensation um arrangements
(29:24):
that go over and above certainbenchmarks.
So, for example, and again,there's nothing magic about
this, but if you're proposingtotal compensation that exceeds
the 75th percentile, that mightbe a good time for uh the
leadership to go back to theboard or the board subcommittee
that's dealing withcompensation, right, to get the
(29:46):
board's approval on thosearrangements.
I think that helps ensure youknow um uh the compliance with
the IRS intermediate sanctionsrules and frankly it's just a
good governance practice.
So something Another strategythat I think can be considered
for sort of long-term governanceconsistency for these
(30:09):
compensation plans.
SPEAKER_02 (30:12):
And I'm assuming those would be documented with
meeting minutes.
And so obviously you would havethe documentation should
anything occur.
SPEAKER_01 (30:22):
A hundred percent, yes.
The board minutes are oftenharder to draft than you would
think.
But yes, good board minutes arereally critical here.
So that the board, right?
Because again, if you'reconsidering a sort of above
average compensationarrangement, there certainly
could be business factors thatsupport that type of
(30:43):
compensation arrangement.
And again, this gives theorganization another opportunity
to document what thoseconsiderations are.
Again, one great example is arural provider that has
difficulty recruiting in aparticular specialty, right?
If you're trying to recruit in aspecialist and there just aren't
(31:04):
a lot in your in your region orin your state, um, and you may
have to pay a little bit more inorder to recruit somebody like
that into your organization.
And so those are all things thatcan be taken account of and
documented as part of this boardcommittee documentation.
So another strategy to beconsidered in all this.
(31:25):
Um well Shad, that that I thinkthat we've covered a lot of
grounds here.
Are there any sort of sort of uhuh uh comments you want to make
and to to wrap all this up?
SPEAKER_02 (31:37):
I think the one thing that I probably failed to
talk about too is, you know, asyou're designing these
compensation plans, um,obviously you want to make sure
it's fair and equitable acrossyour providers.
Um, I feel like that umsometimes, you know, like you
just said, there might be acertain specialty that the CEO
(31:59):
or a board member may think, ohmy goodness, we need a urologist
here, or we need an ENTspecialist here.
And sometimes they'll go aboveand beyond from a compensation
perspective to get thoseindividuals.
But it really um thecompensation plan design should
be something that is fair andequitable, equitable across the
(32:22):
board for all your providers.
So that is something to thinkabout too.
Um obviously, sometimes you dohave to pay more for a
particular provider, but um youwant to make sure that it's um
within reason.
SPEAKER_01 (32:36):
Right.
And that it's you can articulatethose reasons to the other
providers, right?
So um, and again, having gooddocumentation of those.
SPEAKER_02 (32:48):
Um and as we know, they always providers always
talk.
SPEAKER_01 (32:52):
So providers always talk, yes, indeed.
SPEAKER_02 (32:55):
So that is that does happen, and they will find out
that the orthopedic surgeonmakes X amount, and um, then
they'll wonder why they don'tmake that much.
SPEAKER_01 (33:07):
I I will just my my I'll say my wrap-up comment
about this is that indeed thatis this often the scenario that
can lead to a whistleblower.
In fact, we had a uh a Wisconsinum Stark case that was settled a
few years back for$10 million,with with frankly just that
(33:30):
scenario.
Um, so again, I think reallyimportant are building your
internal champions,transparency, consistency, and
really strong documentation uh,from my perspective, are all
really important factors asyou're as you're going through
this process.
SPEAKER_02 (33:47):
Yeah.
So and the last thing I'll saytoo is that you know, I
mentioned earlier that acompensation redesign does not
happen overnight.
It it really takes six months to12 months.
Sometimes provide organizationsare going through an EMR
transition as well.
We definitely don't suggest evergoing to do a compensation
(34:10):
redesign during an EMR change.
SPEAKER_01 (34:13):
But um there's a lot of how to make providers really
unhappy.
SPEAKER_02 (34:17):
Oh, yes, exactly.
The first time you give themwrong data, they're not gonna um
they're they're not gonnabelieve anything.
So definitely make sure that youknow when you start this
process, make sure you know whatthe barriers could be.
Um and just make sure that theyou set a good timeline, you
(34:37):
have consistent uhcommunication, and um always
make sure that uh you youutilize the right um individuals
to make sure you're at fairmarket value.
SPEAKER_01 (34:50):
Right.
Well, that's the I think that'sgreat advice.
Um and uh Shad, thanks so muchfor inviting me to participate
with you today.
This has been a lot of fun, andum we'll we'll be talking to
you.
SPEAKER_02 (35:06):
Exactly.
Well, good luck to everybody ifthey're doing compensation
redesigns.
And thank you so much.
SPEAKER_01 (35:13):
All right, take care.
SPEAKER_00 (35:19):
If you enjoyed this episode, be sure to subscribe to
AHLA Speaking of Health Lawwherever you get your podcasts.
For more information about AHLAand the educational resources
available to the health lawcommunity, visit American Health
Law.org and stay updated onbreaking healthcare industry
news from the major mediaoutlets with AHLA's Health Law
Daily Podcast, exclusively forAHLA comprehensive members.
(35:42):
To subscribe and add thisprivate podcast feed to your
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