Hospitals in the Tri-State Area and elsewhere are struggling to treat the growing volume of COVID-19 patients. Even where they have adequate space, the number of available hospital-based health care providers has not kept up with the demand. There may be opportunities for private medical practices to help fill this need. Practices that have furloughed or reduced the schedule of their providers may be able to utilize those providers to staff hospitals during the COVID-19 crisis.
HOW WOULD THIS BE STRUCTURED?
Practices can enter into a simple professional services agreement (PSA) with the hospital or the hospital’s captive practice. The hospital would pay a per diem or other rate to the practice, and the practice would pay the providers. This might require a simple amendment to providers’ employment agreements.
HOW CAN THE PRACTICE BENEFIT?
This program would be particularly beneficial to practices who receive a loan under the CARES Act program. Those loans will only be forgiven if the practice retains its workforce at pre-COVID-19 levels. Rather than furlough providers, practices would be able to continue to employ providers under this PSA model. Even if the fee charged to the hospital was merely a pass-through of the employee’s total compensation and internal administrative costs, the practice would still benefit by the enhanced loan forgiveness. Even practices that do NOT receive the CARES Act loan might benefit by retaining their staff during this difficult period, thus reducing the risk of understaffing when the crisis ebbs.
ARE THERE REGULATORY CONCERNS?
All financial arrangements between physicians and hospitals create potential regulatory issues under federal and state anti-kickback and anti-self-referral laws; however, CMS has waived certain federal laws during this crisis to encourage providers to enter into relationships necessary to meet the unprecedented needs of patients and hospitals. The specifics of these waivers is outside the scope of this article, but we are happy to discuss them.
WHAT IF PROVIDERS ARE UNWILLING TO RISK THEIR HEALTH TO ENGAGE IN THIS PROGRAM?
Providers should not be forced to staff hospital ICUs filled with COVID-19 patients. Each individual has their own risk tolerance based upon a variety of factors, including their own risk factors (age, chronic illness, weight), family member risk factors, responsibilities for caring for family members, etc. However, there may be services hospitals sorely need that do not involve substantial risk of infection. Additionally, we believe that many providers will elect to participate in a PSA who would otherwise have volunteered for no compensation.
The first step in pursuing a PSA arrangement is to approach your providers and gauge their interest. Then, you should approach your local hospitals and describe the proposal to determine their needs. We’re happy to assist in this process.