Increased Physician Compensation and the End of the PHE

Considering the difficulties physicians faced during the pandemic, it may not be surprising to find that compensation increased during the past few years. In Medscape’s newly released 2023 Physician Compensation Report, which surveyed 10,000 physicians in 29 specialties, Medscape found that average physician salaries increased by more than 17% since 2018 and 4% against the previous year. 

Medscape’s Press Release stated, “The rise in physician incomes is the result, in part, of a physician shortage, exacerbated by retirements and the impact of burnout, with more physicians making career shifts within medicine, including reduced shifts, shift work, and a move to virtual care.”

We know there were many healthcare entities that had to get physicians into place or change their financial arrangements quickly as they faced physician shortages and other issues. The HHS Public Health Emergency Declaration related to COVID-19 (the PHE), allowed CMS to provide blanket waivers to certain requirements under the federal self-referral law (the Stark Law). Among other things, this allowed entities that rely on physicians to nimbly and legally make the changes they needed, without following certain requirements. As specifically related to increasing a physician's compensation, two blanket waivers of the Stark Law may have been relied upon by certain entities which allowed for:

1. Remuneration from an entity to a physician (or an immediate family member of a physician) that is above or below the fair market value (FMV) for services personally performed by the physician (or the immediate family member of the physician) to the entity.
2. Referrals by a physician to an entity with whom the physician (or an immediate family member of the physician) has a compensation arrangement that does not satisfy the writing or signature requirement(s) of an applicable exception but satisfies each other requirement of the applicable exception unless such requirement is waived under one or more of the blanket waivers set forth above.

Are you ready for the end of the PHE?

As the provider community approaches the end of the PHE on May 11, 2023, all of the blanket waivers will expire. If a provider took advantage of the above blanket waivers it will be important to determine, among other issues, whether:

•  All of your physician independent contractor and employment arrangements are FMV as required under the Stark Law; and
• All of your independent contractor arrangements are documented in writing, and signed by both parties.

There were numerous other waivers during the PHE from onerous Stark Law requirements, but as the end of the PHE nears, confirming that providers have compliant arrangements and establishing/re-establishing compliant processes is essential.