Employing Hospital-Based Specialists…Now What? A Discussion with Joe Aguilar and Natalie Bell from HMS Valuation Partners

Episode Date: February 6, 2024

In this episode of Stark Integrity, Joe Aguilar and Natalie Bell, Partners at HMS Valuation Partners, provide a practical roadmap for one of the most complex issues facing healthcare organizations today:

What happens after you decide to employ hospital-based specialists?

From anesthesia to emergency medicine to hospitalist programs, these arrangements are essential—but they come with financial, operational, and compliance challenges that cannot be ignored.

“Meet in the Middle” – Sharing the Risk

A central theme from the discussion is the concept of risk sharing.

As Aguilar and Bell emphasize:

If you’re able to meet in the middle, you can share the risk.

Hospital-based specialties often:

• Do not fully cover costs through professional collections
• Require hospital financial support (stipends or subsidies)
• Involve ongoing operational losses

The key is structuring arrangements that balance:

• Physician expectations
• Hospital sustainability
• Compliance requirements

You Have to Do the Math

One of the most practical takeaways from this episode is straightforward:

Do the math.

Organizations must understand:

• Total revenue streams (professional + technical)
• True cost of staffing and coverage
• Gap between collections and required compensation

Without a clear financial picture:

• Stipends can become arbitrary
• Arrangements can drift away from FMV
• Compliance risk increases

As reinforced throughout the discussion:

Numbers drive defensibility.

Determining the Stipend

A core focus of the episode is how to structure and justify stipends.

Hospital-based specialties often rely on stipends to:

• Support call coverage
• Ensure 24/7 service availability
• Maintain essential service lines

But these payments must be:

• Consistent with fair market value (FMV)
• Commercially reasonable
• Not tied to referral volume or value

This is critical under Stark Law, which prohibits compensation arrangements that reflect referral activity rather than the value of services performed.

What Happens After You “Take the Leap”

Employing specialists is not a one-time decision—it is an ongoing operational commitment.

As Aguilar and Bell explain, organizations must be prepared for:

• Continued financial support
• Evolving compensation models
• Ongoing compliance review

Once specialists are employed:

You own the model—and the risk that comes with it.

Revenue Cycle and Operational Complexity

The discussion also highlights the importance of revenue cycle management.

Even strong clinical programs can struggle if:

• Billing processes are inefficient
• Documentation is incomplete
• Collections are not optimized

Optimizing revenue cycle performance can:

• Reduce required subsidies
• Improve sustainability
• Strengthen the overall business case

The Compliance Overlay

While operational and financial considerations are critical, the compliance overlay remains constant:

• Compensation must reflect actual services performed
• Payments must be independent of referral generation
• Arrangements must be defensible under Stark and AKS frameworks

Given increasing enforcement activity around physician compensation, these arrangements are under significant scrutiny.

Final Thoughts

This discussion with Joe Aguilar and Natalie Bell of HMS Valuation Partners highlights a key reality:

Employing hospital-based specialists is not just a strategic decision—it is a long-term financial and compliance commitment.

To do it right, organizations must:

• Understand the economics
• Structure defensible compensation
• Share risk appropriately
• Continuously monitor performance

Because in today’s environment:

The success of these arrangements depends on getting both the math—and the compliance—right.

Click here to listen to this Stark Integrity Podcast Episode:
https://podcasts.apple.com/us/podcast/employing-hospital-based-specialists-now-what-a/id1588939373?i=1000644435577&l=fr-FR