Connecting Contracts, Compensation, and Compliance: A Conversation with Dan Iliff

A physician employment agreement can pass through several hands before a physician ever sees their first paycheck. 

Recruiting negotiates the terms. Legal reviews and approves the agreement. Compensation turns those terms into payment. Each handoff depends on the information before it being accurate, complete, and accessible. 

When those teams work from disconnected processes and systems, small gaps can become much larger problems, from missed payments and outdated amendments to increased compliance risk. 

Dan Iliff has experienced that disconnection firsthand, from his time in physician recruiting to serving as Director of Physician Compensation for a major health system. 

We sat down with Dan to talk about what he learned working across those functions, the risks that emerge when contracts and compensation are managed manually, and what becomes possible when the teams responsible for them are better connected. 

A: I started in healthcare when I was probably 14 or 15. My dad owned an urgent care facility in Topeka, Kansas, and I worked across the front and back office, from welcoming patients to billing and collections. By college, I was helping manage the clinic while getting my business degree. 

After I graduated, I actually wanted to get out of healthcare because that was all I had ever been involved in. I went into real estate and the mortgage business for about five years. When the market crashed, I moved to Texas and eventually found my way back into healthcare through physician recruiting. 

HCA Healthcare hired me as an in-house physician recruiter for 14 hospitals in the Dallas-Fort Worth market. From there, I joined CHRISTUS Health as Director of Physician Compensation. 

I knew physicians and contracts, but when I interviewed, I told the CEO, “I don’t really know what an RVU is.”

He said, “You can learn.”

Within a couple of weeks, the organization began redesigning its entire physician compensation plan. I was traveling to meet physicians one-on-one, walking them through their new agreements and showing them how the new compensation plan would affect their pay. 

It was a drinking-from-the-fire-hose introduction to physician compensation. 

A: There was a long wall of file cabinets. You’d have a key, open up the cabinets, and there would just be stacks of folders with employment agreements, amendments, sticky notes, handwritten special deals, all of it. 

It was certainly overwhelming, but I also didn’t really know anything better than that. It was kind of, “It is what it is.” 

At HCA, I had already gone through the process of moving recruiting from Excel spreadsheets into Salesforce, so I had seen how technology could benefit a group through automation, clarity, and transparency. 

When I saw those cabinets, I thought, “There’s got to be a better way to organize all of this so I can find somebody’s information quickly.”

Especially when a physician would call me. 

They could call and ask, “Why didn’t I get my sign-on bonus? I was told I was supposed to get that.” 

That’s where I learned a lot about the lack of communication between recruitment and compensation. Recruiters might negotiate a sign-on bonus, a retention bonus, or another arrangement. Then it would come over to me as the person who had to implement all of it, and I’d have to figure out the details of what had actually been discussed.

A: My job really required getting to know legal, compliance, quality, revenue cycle, recruiting, the executive suite, operations, and mergers and acquisitions. 

The physician compensation person needs to build relationships with all of these different siloed departments within the health system and medical group. 

As I met with the legal team, they would express strong concerns about recruiting. What are recruiters offering? Are they using fair market value? Are they using benchmarks? Who’s monitoring what offers go out the door? Who’s overseeing the employment agreements? 

I met with legal weekly. 

Eventually, we created a physician compensation committee. That brought legal, operations, executives, recruiters, finance, my department, and sometimes physicians together at the table. 

The problem was, I would sit at that table and legal would ask me a question I couldn’t answer. 

They might ask, “Who are the top 10 at-risk physicians who are at or above the 75th percentile of MGMA?” 

I’d say, “I don’t know. Let me come back next month.” 

Or somebody would ask when a physician’s contract was up for renewal. I’d have to go look in the file and folder and report back. 

I didn’t know what questions were going to be asked, so I was constantly saying, “We’ve got to have something where I can answer these questions at the table.” 

We didn’t have the technology in place to do that. 

A physician has an employment agreement when they originally start, and then additional responsibilities get added. Maybe they take on a medical directorship. Maybe they start doing APP supervision. Maybe there’s a change to the compensation plan. 

All of those things require documented changes, which become amendments. 

A physician can be working off their original employment agreement and have eight, nine, ten amendments. 

The problem is that health systems aren’t always sure which amendment is active or which one should be referenced. Maybe there’s still something active from amendment three and something else active from amendment six, while amendments one, two, and four are no longer active. 

It can become very confusing and extremely time-consuming when you’re managing all of those employment agreements manually. 

Legal and compliance need to be able to determine: Are we actually paying this physician appropriately according to their employment agreement and their active amendments? 

If you’re paying a physician based on an inactive agreement, you risk that physician being overpaid or potentially underpaid for the work that’s being done. 

A: A lot of it comes down to people not knowing where the agreements are. 

They may be on the desktop of an employee who has been with the organization for 25 or 30 years, and then that person decides it’s time to retire. 

Suddenly, there’s a hustle to figure out: Where are those employment agreements? Which one is active? Who needs to have their renewal completed? 

It turns out they’re all in files and folders in metal cabinets along the wall, or they’re sitting on somebody’s desktop and nobody really knows how to access them. 

The manual work it takes to continually keep employment agreements and amendments updated is significant. Sometimes the people managing it simply can’t keep it updated. And when that happens, you increase your risk significantly.

A: What changes is that all of these siloed departments have access to one centralized system. 

You’re not only housing the employment agreements and amendments there. An employment agreement can move through a workflow to the appropriate people who need to review and approve it. 

Recruiting can work from an approved, templated contract that has already been reviewed by legal. That means legal is aware when a new contract is coming through and when a new physician is going to be starting. 

That brings those siloed departments together. 

Then you connect the terms in the employment agreement to physician compensation. 

If a threshold was negotiated in the contract, nobody should have to ask, “What was the threshold we agreed to?” 

The same goes for compensation. You don’t want somebody pulling a $200,000 base salary from a contract and manually typing $205,000 into an Excel spreadsheet. 

And you don’t want to realize a physician started three months ago and now you need to backdate their pay. 

When the contract terms and compensation process are connected, you can be ahead of the curve instead of reacting to these manual processes.

A: Think about a physician who is looking at multiple job opportunities. They’re asking, “How do I know how much money I’m going to make in year two and year three?” 

Traditionally, somebody might use an Excel spreadsheet to calculate that out and walk through it with the physician. 

But the physician may still be thinking, “How do I know I’m going to get there? How do I know there’s enough patient volume for me to get there?” 

There are a lot of things that can feel outside of their control. 

When they have the ability to see their productivity and compensation in real time, they can know where they stand against an income guarantee, their current productivity, and how they’re progressing. 

A: That’s one of the biggest return-on-investment points for me. 

If people can rely on automation for the calculations, renewals, and all of that tracking, then instead of constantly calculating numbers at the beginning or end of the month, they can actually focus on other projects. 

There are all these projects that people kind of forget about because they’re just sitting there. 

If those projects were getting completed, how many more efficiencies would there be? How much better could communication be across the medical group and the health system?