In 2001 I co-founded Senior Care of Colorado.  We were a small group of six geriatricians and a couple of physician assistants working out of two clinics who provided primary care geriatrics in local nursing homes. We immediately had offers from several local nursing homes to take positions as medical directors.  Naively, we thought that these offers reflected a desire for these facilities to gain expertise in geriatrics. Realistically, they probably thought that hiring us would bring them more patients. Within a year we were under investigation from the OIG. They interviewed several nursing home administrators.

Fortunately, as a private practice that was completely beholding to Medicare reimbursement, we had begun our practice with a commitment to following Medicare guidelines to the letter.  As medical directors, this meant submitting monthly time sheets to our nursing facilities, listing specifically what we did over the course of each month. Our average administrative time was between 10 and 14 hours for a facility. We had precise documentation of the administrative tasks performed over each month. After a year of investigation, with nothing in hand but our excellent documentation and services performed on behalf of the facilities we were contracted with, the OIG turned its focus onto our billing records.  Seven years later, they finally stopped investigating our practice, having found absolutely nothing over the entire eight years. That’s a story for another article. This article is about the inflated risk that today’s nursing homes are taking in relation to their medical director contracts.

Many nursing home administrators believe that hiring a medical director will result in that physician directing patients to their facility.  First of all, this is a myth. It is actually rare for a physician to be able to direct patients to a specific facility. Patient and family choice, and the influence of hospital discharge planners, not to mention managed care and ACO arrangements, precludes most physicians from having an impact on directing patients to a facility.  The focus of medical direction should always be on providing high quality care, and never on providing patients to a facility. The House of Delegates of The Society for Post Acute and Long Term Care (AMDA), passed a resolution this year affirming this very fact. When we took on medical directorships at Senior Care, it was our intent to help those facilities provide the highest quality of care.  If we achieved that goal, new patients would come, regardless of who their physician was. I wish that I could say that the majority of nursing homes and medical directors pay strict attention to this issue.

The greatest risk is to a facility paying a medical director a significant stipend, say $3-4,000/month, and having that physician only delivering an hour or two of administrative services to the facility.  That will ultimately give the perception that the medical director is being paid for admissions, even if that’s not truly the case! Which makes even less sense from a business perspective! It is obviously even worse if the medical directors actually manages to direct patients to a facility where he isn’t actually providing significant medical direction.

It is critical that medical directors document every minute of administrative time that they spend. They can even account for their “on call” time being available to the facility for emergencies.  In my experience, a very reasonable fair market value for that time ranges from $250-350/hour. For a 99 bed facility, 10-14 hours a month of medical director times also quite reasonable. These numbers can flex with higher acuity and complexity.  The facility should NOT take responsibility for documenting the medical directors hours. An administrator should NEVER “guess” or estimate a medical directors administrative time in PBJ. Any facility administrator that is doing that today is putting themselves and their facility at unnecessary risk.

Fortunately, there is an App to assist medical directors and facilities in the documentation of medical director hours.  It is called CareAscend. CareAscend was developed by nursing home medical directors and is approved by AMDA. It has other beneficial applications that are pertinent for Chief Medical Officers and Chief Compliance Officers, but first and foremost, facilities should be making sure that their medical directors are accurately documenting their services.  There is no need to put a red flag out in front of the OIG. If you do, the next thing you know they’ll also be looking at your billing records!