How to Help Future-Proof Your 2020 Provider Compensation and Production Data

COVID-19 has thrown a wrench into nearly everything in 2020. Despite the hope that the stroke of midnight on Dec. 31 will bring resounding relief, provider productivity and compensation tracking will continue to see the ghost of 2020 unless preemptive planning has taken place.

The primary provider compensation problem is obvious and nearly universal: How do we account for production interruption(s) and, in some cases, compensation forgiveness that occurred in 2020 while maintaining the integrity and usefulness of our data?

During those months of interruption(s), healthcare organizations had varied responses in regard to compensation paid to providers that had some tie to productivity. Regardless of what specific actions were taken to adjust for these periods, here are the steps that we recommend to assist in limiting the impact of the COVID-19 production interruption for items like forecasting and budgeting, identifying highly compensated providers for review, and more.

• To the extent possible, document 2020 on a monthly basis, as opposed to just annually. This will enable you to have more granularity and greater clarity into the timing and true duration of the interruption in regard to individual providers, specific locations, service lines, and the organization as a whole.
• Document actual compensation paid, including any payments that were made for production-based compensation draws and actual production.
  • Make special note of any production-based payment forgiveness or other payment forgiveness provided (i.e., dollar amount, duration, etc.).
  • Make sure the data does not include any “proxy production” or “formula fillers” (e.g., including work relative value unit amounts in calculations for months that were forgiven to ensure that formulas are generating intended cash compensation amounts).
• Document changes in provider schedules and note any correlation between schedule reductions and production reductions (and vice versa, in subsequent ramp-up periods).
• Develop a well-thought-out and agreed-upon methodology to most accurately project what compensation and production would have been without the COVID-19 interruption for your specific circumstances.
  • For example, use March 1, 2019, to Feb. 29, 2020, data or some other reasonable time range.  Or, was there a complete rebound in production after June 2020 and/or a substantial increase over the subsequent prior periods (e.g., 150% per month) such that calculating compensation based on full 2020 calendar-year production will produce an accurate picture of what 2020 would have likely looked like in a “normal” year? You can verify your projections with a previous period’s data.
  • Document these projected compensation and production amounts, in addition to the already documented actual compensation and production amounts, to use for projections.
  • Make note of these compensation and production differences between actual and projected in order to support the budgeting processes and quantify the previous goodwill to providers, if applicable.
• Determine if there are any additional periods of interruption from the virus resurgence impacting the end of 2020 and/or if 2021 will be impacted, requiring similar considerations for 2021.
• Pay particular attention to any changes or specific requests that surveys make in collecting 2020 provider data for their 2021 publications. For example, is the survey source requesting all compensation to be included, or should forgiveness-type payments be pulled out?
• Make comprehensive notes and summarize the general procedures and methodologies behind the data tracking decisions and individual provider scenarios to the extent possible.
  • Ensure that all documentation can be reasonably followed and understood so others outside of the team and future generations can accurately interpret what was done.

Ultimately, all organizations are different in regard to what they have experienced related to COVID-19, the tracking needs they have, and the systems they have in place. The primary message is this: Do what works for your specific situation but save yourself future headaches by maintaining data clarity as opposed to just marking 2020 with an asterisk.

Visit the KSM COVID-19 Resource Center