Red Flags to Watch for in Terms of the Compliance Aspect of Hospital/Physician Contracting

1. Declining financial performance with less conservatism in contracting
2. No action plan to monitor impact of new legislation or market shifts
3. High turnover in senior leadership
4. Frequent, significant changes in estimates/costs/budgets
5. Complex arrangements not well understood
6. Arrangements appearing to serve little practical purpose
7. Rapid expansion of activities/services without market changes
8. Inconsistent contracting processes
9. Lack of Transparency in Cost & Quality Information
10. Total compensation exceeds FMV
11. Multiple contracts for individual or group
12. Excluding pay for call, directorships or other duties in FMV evaluation of total cash compensation
13. Unsigned or expired contracts
14. The “impossible day”
15. Providing excessive escalation in compensation models with high base compensation and graduated payment formulas
16. Crediting physicians for services rendered by non‐physician providers
17. Contracts that “owned” by certain executives with no compliance review

Notes: The best advice is to pay attention to early warning signs and to ask questions.