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Is Your Anesthesia Contract All It Should Be?
When it's time to renegotiate, here are 10 tips to get the best arrangement for your facility.
Judith Lee
Publish Date: October 10, 2007   |  Tags:   Anesthesia

Your anesthesia-provider agreement is as vital to the success of your facility as the all-star doc you recruited, the cohesive staff you trained and the flawless pre-op admission process you developed. Think about it: That one contract can impact everything from patient flow, to surgeon, staff and patient satisfaction, to your facility's bottom line. Whether you inherited an anesthesia agreement from a previous administrator or simply haven't considered the importance of the pact, let's take time to review your contract's language so that you get the most advantageous arrangement for your facility when it's time to renegotiate. Whether you want to renew with your current anesthesia provider or shop around for a provider that can deliver more of what you want, here are 10 tips to give you the edge in brokering the most advantageous anesthesia arrangement for your facility.

Find a compatible match
The compatibility of an anesthesia service with the needs of your facility is one of the most important factors for a successful and lasting relationship.

"Are you providing MAC anesthesia to the majority of procedures? Do your physicians want to focus on post-op pain management with regional anesthesia, or will most procedures be done under general anesthesia with extended recovery times?" asks Diana Procuniar, RN, BA, CNOR, the nurse administrator of the Winter Haven Ambulatory Surgical Center in Winter Haven, Fla. "These are very important questions to ask with the terms of an agreement that will be satisfactory to the physicians performing the procedures."

Outpatient providers only
In addition to experience with specific cases, it's vital that providers have a background in an outpatient surgical setting. Providers with experience exclusively as inpatient anesthesiologists may be unprepared for the types of cases you do and the lively pace of ambulatory ORs. Patient flow and room turnover can make or break a surgical facility. Make sure the anesthesia team you hire will be willing to work as an integral part of your staff with respect to case efficiency.

"The wrong anesthesiologist can delay the entire schedule. The right one can make the day run very efficiently," says Wes Becton, executive director of the Elmhurst Outpatient Surgery Center in Elmhurst, Ill.

Others suggest you specify which anesthesia team members are to service your facility, or set a minimum outpatient surgery-experience level.

Who's Picking Up the Supply Tab?

A key component of any anesthesia provider agreement is which party - the facility or provider - will incur the expenses of surgical supplies and drugs. The contract language should be explicit if the anesthesia service will be required to provide and keep up equipment (anesthesia machines, cardiac monitoring) as well as the associated medication costs. On the other hand, if your facility is on the hook for supplying equipment and medications, establish appropriate expense limits for each surgical procedure. The provider should be held to this cost-per-case standard, with the potential for fines or penalties if the amount is exceeded.

Set on-site requirements
Require your provider to be on-site from the time the first patient of the day is admitted until the last patient of the day is discharged. Agree with the provider on when his day ends. Some administrators want anesthesiologists to stay until all patients have physically left the building; others require that patients only meet discharge standards before letting a provider leave.

"Your contract should leave little gray area when patients become extended stays due to transportation difficulty or are dischargeable, but the staff are still coordinating all post-op care," says Ms. Procuniar.

Marlene Brunswick, RN, CNOR, the director of nursing for the Findlay Surgery Center in Findlay, Ohio, is negotiating an anesthesia-provider agreement. One of her non-negotiable terms: anesthesia coverage in the facility until all patients are gone, not just until the cases are completed in the OR. "This gives you an extra ancillary person in the building if a case goes bad, if you have to go back into the OR or even if you have a question on nausea and vomiting. That can be another hour or so after the cases have ended," she notes.

Ms. Brunswick's facility previously had agreed to pay an extra monthly fee to the anesthesia provider for this service, but she'll no longer agree to that. "We've found if the anesthesia provider wants the contract, it will do what we need without an extra fee," she says.

Let the provider bill for his services
Not only is it simpler for you if the provider does his own direct billing, but it's also safer. If you pay the provider for his anesthesia services, and the fee is over fair market value, that exchange can be considered an inducement of patient referral. And an inducement of patient referral is, of course, illegal.

Understand the terms of malpractice insurance
Beware of anesthesia providers with claims-made policies, warns Alan Schabes, Esq., a healthcare lawyer with Benesch Friedlander in Cleveland. This type of policy covers a claim only if it's made during the coverage period. The provider can buy an extended reporting endorsement (also called the "tail"), which is a provision that will insure a claim even after the coverage period is over. If a provider has a claims-made policy, require that he also purchase the tail. And be prepared to negotiate who pays the often outrageous rate of this supplement. In Ohio, the tail can cost 200 percent of the annual premium.

Set supervision requirements
If you'll have a mix of anesthesiologists and CRNAs, make sure their staffing pattern complies with your state laws and appropriate supervision reimbursement guidelines. Ms. Brunswick insists the anesthesiologist be available at all times in the OR and PACU and doesn't circulate to the pre-op area to get cases started. "That might be a more efficient use of their time, but it does not comply with Ohio's laws for supervision," says Ms. Brunswick.

Also ensure your contract with the provider not only stipulates the definition of an anesthesia provider as an anesthesiologist or a CRNA, but also requires that providers hold proper certifications.

Negotiate a non-compete clause
You probably don't want your anesthesia provider to supply services to a competitor. "When the anesthesia group does not have an exclusive contract with a facility and it shares its resources across many other centers, it can often lead to shortages of providers at facilities and may force a facility to close rooms," warns Paula Russo, RN, director of Same Day Surgery Center in St. Petersburg, Fla.

Your ability to negotiate a non-compete clause is a function of your relative bargaining power. A reasonable clause is a one-year non-compete; in a populated area, draw a narrow radius, but in a sparse population, draw a wide geographic area.

Anesthesia providers may negotiate for exclusivity so that you can't bring in another provider. "Once anesthesia providers have exclusivity, they can run things their way," says Jay Horowitz, CRNA, president of Quality Anesthesia Care Corp., in Sarasota, Fla..

Define caseload
Contract language should define the caseload of your facility. Determine the amount of cases you require from your anesthesiologists; they should never dictate the facility's volume of work. "At no time should the schedule be adjusted to accommodate lack of anesthesia personnel," says Ms. Procuniar. "Don't give the anesthesia provider the ability to close ORs to cover provider vacations, leaves of absence or staff turnover."

Understand supply and demand
Everything is negotiable, but your position in the negotiations is affected by the supply of providers in your area. "If there are plenty of providers, you can hold out for a more favorable agreement. If there's a shortage of providers, you may have to give more ground to get the coverage you need," says Mr. Schabes.

Get a lawyer
Once you've found a provider you feel comfortable with, seek legal council to hammer out a deal. "Make sure you have a good lawyer, and I mean a healthcare lawyer," says Mr. Horowitz. "An inexperienced lawyer won't know many of the details and technicalities."

A typical length of an anesthesia provider agreement is one to three years. Some contracts have an evergreen clause, which lets the agreement automatically renew at the end of the term if neither party opts for termination of the deal.

If an evergreen clause isn't included, establish grounds for termination of the contract for cause, such as a provider's loss of his license to practice. Including a provision for termination without cause isn't as simple. Mr. Schabes suggests you strive for mutuality because both sides usually want stability and an escape door when entering into a binding contract. Negotiate a suitable length of time; say the first year, when there can be no termination without cause.

To determine how much notice you would require for the contract's termination, consider how much time it would take to bring in another anesthesia provider. In a large city, you might be able to get away with 90 days notice, but in a rural area you might want to require 180 days.

Mr. Horowitz suggests you think ahead to possible disputes that you can't foresee at the time of negotiation. "Have an agreement that, if there are conflicts, you'll go to arbitration nearby before you start suing each other," he says.

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