Should we pay physicians for performing peer review?

Patient Safety Quality Monthly

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January 19, 2007

Last month, one of our readers submitted the following question:

"During our Medical Staff Quality Committee meeting, one member commented that committee members should be compensated for their time, especially those committees that involve reviewing material prior to the meeting. I have inquired with my counterparts at other area hospitals. Consensus was that no one is paying committee members; however, the Chief of Staff, Chief Elect, Department Chairs, and Vice Chairs do receive a stipend. 

"What are your thoughts on compensating committee members? Would it be all committees or only those who would be required to spend additional time outside the actual meeting (i.e., credentials, quality)? Would you pay a flat fee across the board no matter what the physician's specialty-or-would the fee reflect the physician's specialty?"

These are great questions facing a number of medical staffs today. As physicians are more pressed for time to devote to medical staff responsibilities, the burden falls unequally on some more than others. In the past, this was seen as our duty and compensation was unheard of. And in many medical staff cultures, even today, physicians who are paid for non-clinical work, such as case management physician advisors or medical directors, are viewed as being in the pocket of administration. 

So what is the right course? My response to this question should not be construed as either advocating or not advocating physician payment. What I will try to discuss are some ideas on how to approach the issue.

There are really four decisions you must make to address this issue:
1) Should you pay?
2) Who should get paid?
3) Who should pay?
4) How much should you pay?

Should you pay?
Well, there is nothing illegal about this as long as you are within bounds for the last question of how much to pay. The real issue is what does your medical staff think about physicians getting paid? If your culture would react negatively, you need to either work to change that culture or abandon the issue. The best place to discuss this question is at your MEC, not at the committee that potentially would be paid.

Who should get paid?
Most medical staffs focus on those who go above and beyond rather than just showing up at a meeting. Attendance at a committee is your citizenship responsibility as a member of a self governing medical staff. But for those who do more, if you can define what that work is, you can develop a fair compensation mechanism. This may be based on the time spent or on the tasks done. You can pay for meeting attendance if the meeting is seen as more burdensome due to preparation requirements. If someone is a paid medical director and the expectation is that part of their responsibility is to perform review of physician-related patient care issues, you may wish to exclude your medical director from additional payment for quality work.

Who should pay?
Typically, the hospital will be the source of funds. Sometimes the hospital may provide the medical staff with a lump sum of funds to pay physicians for various activities and let the medical staff determine the precise distribution. Or the medical staff may provide some or all of the funds from medical staff dues. Involving the medical staff in the process works particularly well if the medical staff culture is suspicious of physicians who receive funds from the hospital. Whatever mechanism is used, the approach needs to be determined by a consensus of the medical staff, administration, and the board.

How much should you pay?
The legal issue here is based on the Stark Law for Inurnment. You need to establish an administrative hourly rate for physicians and apply it equally to all physicians, regardless of specialty. Usually this rate is between $75 and $150 per hour. Then you need to establish a method to determine how to quantify the actual work done. It can either require the physicians to track their actual time for reviewing cases or establish a general per case rate and pay by the case. For example, if the average time is 30 minutes and your rate is $100 per hour, a physician reviewing three cases in a month would be paid $150.

As I mentioned earlier, this article is not meant as an unqualified endorsement for paying physicians. If you choose to pay physicians for performing peer review because you believe that it is right for your medical staff, this article is intended to help you work through your options.

Regards,

Bob Marder, MD
Practice Director, Quality and Patient Safety
The Greeley Company

For more information on our Patient Safety and Quality consulting services, click here or contact Ali Drayer by e-mail, adrayer@greeley.com, or by phone at 888/749-3054, ext. 3814.

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