May 17, 2018

QUESTION:        We are analyzing the fair market value of what we pay our employed physicians.  How should we classify physicians who practice in more than one specialty?

ANSWER:            There is no definitive rule as to how a physician’s specialty should be classified for compensation or compensation analysis purposes.  For example, the MGMA Physician Compensation Survey directs survey respondents to list their specialty as the area where they spend 50% or more time.  Others may classify physicians into specific specialties based on their training or the specialty that the physicians hold themselves out in.

The Board certification of each physician is another criterion that can be used. In the end, specialty classification for compensation analysis purposes depends on the criteria used by those conducting the analysis.  The key is consistency.

As the Office of Inspector General stated in its Supplemental Compliance Guidance for Hospitals, that when analyzing physician compensation for compliance with the Stark law,

“hospitals should have appropriate processes for making and documenting reasonable, consistent, and objective determinations of fair market value.”
70 Fed. Reg. 4863 (Jan. 31, 2005). (Emphasis added.)