Cases and Comments on Contracts

Hiding the Buck

by Robert V. West, MD JD FAAEM

I recently read a glowing report regarding the Truth about Contract Management Groups in another newsletter. The author (a recruiter) was impressing upon her readers that the physicians she interviewed were favorably impressed with the CMG’s administrative support services and their individual contract provisions, except one. How much?

The ultimate question however which was not addressed in the article or in any CMG contract is how much are we paying for these services? The convoluted nature of the medical staffing business is that we (the principles) are generating the professional fees from which the CMGs (our agents) are collecting their revenues and our fees without full disclosure. The applicable contract provision usually reads, “the physician agrees to assign to the CMG all of the professional fees in exchange for $X per hour.” Neither the contract nor the CMG will ever intentionally tell you the numbers that are omitted, your gross revenues plus their administrative stipend from your hospital.

Hence the problem with this CMG analysis and the modus operandi for the entire ED staffing industry is nondisclosure. Profits are garnered from physicians’ fees based upon policies and procedures that we the physicians don’t have access to. Hence by keeping us in the dark, there is no bargaining position available other than that one of take it or leave it. If we don’t know how much we are generating, there can never be a fair and truthful analysis of any contract? As long as there are closed books, there will be only partial truths told about CMGs. They need to keep working in the dark for what they decide to pay.