blog updates

Follow KSM
Search

KSM blog

KSM Blog | Katz, Sapper & Miller CPA

Physician Employment Substitute? - Clinical Lease Physician Compensation Models are Gaining Momentum

Posted 7:23 PM by

As the current wave of physician acquisitions grows, we are seeing some of our clients, both hospitals and physicians, wanting to and entering into clinical lease arrangements as an alternative to direct physician employment. 

The Basics

The general arrangement is as follows:

  • The physician remains independent, but assigns the right to bill and collect for services provided to a third party, usually a health system.
  • The health system, in turn, guarantees a clinical rate to the physician.
  • Payment is generally paid on a production basis -- typically in a rate per wRVU fashion.

As always, the compensation paid under a clinical lease model must be consistent with fair market value. 

Physician Perspective

This has been a good option for physician groups that are not interested in an immediate sale, but want stability with respect to income and an opportunity to develop a closer working relationship with a health system. 

Health System Perspective

Health systems also get the opportunity to more closely evaluate the relationship. Sometimes this is an interim step towards a full employment arrangement / practice acquisition.  This can also be a good relationship structure for a health system if it has insufficient resources to acquire and/or manage a practice.

Conclusion

This type of physician compensation model has been successfully implemented in a number of markets for a variety of reasons, including the few mentioned above, but certainly in other situations as well.  We anticipate increased utilization of this type of arrangement in the market for the next two to three years.

About Us
Katz, Sapper & Miller’s Healthcare Resources Group serves healthcare providers, including physicians, hospitals and health systems, surgery centers, and long-term care facilities. Our team of healthcare professionals has the scope and depth to meet client needs. Learn more.

link
Comments (0)
Post a Comment
Name:
Email: (Not Displayed)
Website: (optional)
Comment (HTML tags will be stripped):
Please type the alpha-numeric code above (case sensitive):
Error