Mercy Payments


This is story is as interesting as it is crazy. It seems that Mercy Springfield Communities last week had been paying more than 250 physicians bonuses that violated the law.  Pediatricians were getting bonuses up to $48,000 per doctor per year in the 2013 fiscal year.  The system had to pay the Feds over $5 million but admitted no wrongdoing and they went on record stating that none of the physicians had any knowledge of what the system dubbed an “accounting error.”

No wrongdoing?  Accounting error?  Child, please.  There are 30 administrators to one doctor in hospitals and these guys fudge numbers all day (in between eating bagels, drinking coffee, having meetings and going on vacation).

Here is what Mercy did.  They set up up a bonus structure for some of its doctors that violated the Stark law and the anti-kickback statute.  How it worked was that physicians who were specialists in the clinic system were “taxed by the Clinic such that a portion of their profits were redistributed to primary care physicians”, which resulted in “PCP value payments” to primary care physicians within the clinic network of about $23,000 annually.

PCP value payments!  I just love the “administralian” language.  Make up a term and it sounds real.  What does it mean?  Well, as far as this article goes, they believe that these payments were “not linked to productivity” and were paid only to certain categories of physicians. Who were those docs?  Well, they were the ones who “routinely refer patients for procedures and hospitalization to the hospital owned and operated by Mercy Health.”

So, to sum this up.  You get “PCP value payments” if you refer to the hospital owned specialists.  You’re a good doctor for keeping referrals in the family, so here is some money.

This is just another example of why doctors being employed by hospitals is an unholy marriage.  By, the way, you can calculate the numbers but $23K x 250 doctors is $5.75 million.  So, their penalty is less than what they were paying in bonuses in one year and this has been going on since 1999.  Guess who really won here?   No administrators got fired for this andI bet they got bonuses for this “PCP value payment” scam.

If you have a similar story please send them my way.  It will be kept anonymous.

Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected]

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4 Responses

  1. Jason V says:

    so you have this article preceded by the other article where you complain about how hospital administrators get the bonuses but doctors never do.

    The reason doctors can’t get the raises and bonuses from the other article are found in this article.

    • Doug Farrago says:

      Docs can’t get kickbacks. That’s the law. There is no law against administrators doing it though. That being said, I have worked for two hospital systems. It is an unholy matrimony when they are your boss. All bonuses and pay structures are questionable because we shouldn’t be their employees.

      • Kurt says:

        Gee whiz, I wouldn’t mind a bonus for being in primary care. Where I’m at we have to take whatever itinerant specialist we can get. There’s no “competing” starving specialists here and
        I suspect someone complained. I’m lucky I get more than one letter back and most of the time one has to wade through the computer generated BS. I miss the old stream of consciousness letters I used to get.

        Surely there isn’t a law for be rewarded for just “being me”? 😉 Kurt

  2. Steve O' says:

    Pete Stark wasn’t a mean guy – he really wanted to take some of the conflicts of interest out of medicine. He tried to neutralize any connection that doctors had with decisionmaking at hospitals, imagining that trained professional managers would make fair and balanced decision. I thought Pete was dead now – but he just got pitched out of Congress in 2012, and gets to see FrankenHealth in all its glory.
    ‘K, Pete, here’s your MHA’s and MBA’s and other Mustelids (members of the weasel family) that ONLY know how to screw grandma out of money, like Enron – remember Enron, Pete? And now, Pete’s eighty years old and retired. Good luck with your healthcare, Pete. You thought you got in the lifeboat in time. Sorry, take a number, Mac.

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