Alameda Health System: Contracts, Compensation, and Care

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The Contracting Department’s rigorous validation process for physician invoicing requires independent verification of claimed services by the AHS department administrators overseeing said services. Department administrators are assisted in this review by AHS-employed clinical leaders and staff that validate the provision of claimed services. In addition, the Quality Department assesses performances against contract metrics. To date this validation process has resulted in a robust and sound protocol that is both transparent and defensible. This process is highly effective and routinely flags invoices for follow-up when any element is unclear or inappropriate. Payment will, and has been, denied if investigation fails to corroborate invoiced services. Similar invoice validation protocols are in place at other organizations, including Sutter Health and Dignity Health. [See Attachment 2]

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Recurring internal audits of physician contracting processes and contracts by AHS Compliance to help ensure scrupulous adherence to all governing laws, regulations and AHS policies and procedures. The above elements of AHS’ monitoring efforts are ongoing and evolve as required to ensure a robust and defensible compliance posture and sound performance by our contracted providers. Recommendation 18-23: “Alameda Health System must establish and enforce policies and procedures related to the use of public resources by private contractors.” 8 AHS Response to Recommendation 18-23: This recommendation has been implemented. AHS has policies in place that require personnel to use AHS resources exclusively for the benefit of AHS. The following are examples of such policies: purchasing policy which requires all purchases and disbursements made by AHS to be made exclusively for the benefit of AHS; a computer system policy that makes clear that computer resources are the property of AHS and may only be use for a legitimate business purpose; a telephone system policy that prohibits the use of postage meters, printers, copiers, fax machines and the like for personal use; and a vehicle policy that forbids the use of AHS vehicles for personal use. In addition, AHS is presently reviewing and updating policies related to: - Gifts - Expense Reimbursement - Nonmonetary Compensation to Physicians - Expenses Related to the Graduate Medical Education Program These policies are incorporated by reference in contracts with medical groups. As mentioned above, AHP/AHS also has contract language that is required in all physician contracts that makes it clear that space, equipment and the like are to be used only in furtherance of the services to be provided under contract. The Internal Audit/Compliance Department is tasked with enforcing these policies and contract terms. There have been instances where equipment has been improperly used by an outside entity, in which case, the Internal Audit/Compliance and Legal Departments quickly moved to remedy the violation and take any remedial measure necessary to protect the interests of AHS. With respect to OakCare, the medical group is provided office space and staff to carry out the services required under contract. OakCare has its own administrative office that is offsite and is not located in any AHS facility. Recommendation 18-24: “Alameda Health System must establish and enforce policies and procedures related to the acquisition and management of private and public contracts and grants by affiliated physicians.” 9 AHS Response to Recommendation 18-24: The recommendation has not yet been fully implemented, but will be. A policy/process regarding grant approval and administration has been drafted and is currently under review. As noted above, the current contract with OakCare requires that grants be processed through the AHS Grants Department and are subject to contract and legal review by AHS. This contract provision/process has been audited by the AHS Internal Audit/Compliance Department. That audit determined that there have only been two grants that the Compliance Department identified that were initiated by OakCare outside of this process and the administration of both of these grants has been moved to the Grants Department. Management has worked with OakCare to educate them on the proper process going forward and will advise them when the policy has been finalized. The target date for completion is September 30, 2018. Additionally, the Compliance and Grants Departments are working with OakCare staff to identify all research projects currently in process at AHS. This project is intended to identify any projects that are not administered through the Grants Department and bring them under administrative control of the Grants Department. The target date for completion is September 30, 2018. Recommendation 18-25: “Alameda Health System should aggressively pursue the expansion of its medical staff and leadership along the employed medical staff model. This is the most effective way to fully align physician services, service lines and the public mission of Alameda Health System.” AHS Response to Recommendation 18-25: This recommendation will be implemented. Considering this recommendation broadly (i.e. as applying to all AHS providers, not just OakCare), AHS is actively pursuing the goal of transitioning the majority of our contracted providers to AHP with a particular emphasis on physician leadership positions. This is an intermediary step on the path towards a staffing model with the preponderance of providers serving as AHP employees. This goal serves to align providers more closely with AHS through the physician-led medical group model while simultaneously better positioning AHS to remain viable in the transition from fee-for-service to population health based reimbursement. Importantly, this is a long-term strategy that is in its beginning stages. Due to the sheer number of providers and the time-intensive complexities of transitioning existing providers to AHP, it will not be possible to fully implement this recommendation in a single year. Realistically, this is a multi-year strategy that with respect to OakCare AHS leadership anticipates completing by June 2020 when the current contract expires. Respectfully submitted, ALAMEDA HEALTH SYSTEM By Joe Devries President, Alameda Health System Board of Trustees cc: Chief Executive Officer, Alameda Health System 11 Physician Contracting ATTACHMENT 1 [General Workflow] Start Step 1 – Request to Step 2 – Needs Step 3 – Initiate Contract Assessment Contracting Process  Assess enterprise, medical Analysis/ Due Diligence  Request for new contract staff and community need  Contract Terms: Duties incl. or renewal/modification for new/renewed contract Go staffing levels, compensation, of existing contract  Leadership communicates facilities served  Compensation benchmarking “go” or “no go”decision  CMO/AHP analysis w/legal review  CMO/CAO/AHP  CMO/CAO/CFO/AHP/Legal/ Physician Contracting Step 4 – Negotiations & Step 5 – BOT Approval Step 6: Final Contracting Legal Review  Determine if draft contract Processes  Negotiate and finalize requires BOT approval (per contract terms Governance Policy)  Acquire signatures on  Draft contract documents,  Prepare BOT packet appropriate contract documents including BOT packet prep documents (summary, draft  Distribute communications and as needed contract, supporting fully executed contract  Legal review and sign-off on documents)  Upload executed contract and draft contract and BOT • Finance Committee supporting documents in documents • BOT contracting database (TractManager)  CAO/CFO/CMO/AHP/Legal/  CAO/CFO/CMO/AHP/Legal/  Physician Contracting Physician Contracting Physician Contracting End Physician Contracting ATTACHMENT 2 [Payment Process] Start Step 1 – Receipt of Step 2 – Initial Review Step 3 – Department Invoice Review  Logs invoice  CAO directs invoice to relevant  Invoice received by  Reviews invoice and department for verification of Accounts Payable (AP) assesses compliance with services and forwarded to  Department managers review contract requirements Physician Contracting  Invoice forwarded to invoice and validate services (PC)  CAO validates invoices and/or relevant Chief identifies discrepanciess to PC Administrative Officer (CAO) and Quality Dept Step 5 – Reconciliation  PC reviews reported Step 4 – Quality Review discrepancies and contacts vendor to discuss  Quality reviews performnce  Consultation with Legal as against metrics Step 6: Payment needed  Validates request for  PC approves invoice for incentive award payment and returns to AP  Notifies PC of discrepancy with vendor claim End