By Dana Jacoby
Very few aspects of today’s hospital-physician relationship are more sensitive and controversial than the question of how to ensure satisfactory physician on-call pay rates for a hospital’s Emergency Department (ED). Healthcare organizations continue to struggle with on call compensation issues, especially against the background of physician burnout due to COVID-19.
Trauma centers are spending a considerable amount (estimated at an average of $7.7 million last year) on ED call coverage. At the same time, the rapid emergence of telemedicine is changing emergency call coverage panels for select specialties, including stroke care.
Today we’ll take a close look at the standout issues around on call coverage, and show how today’s healthcare providers are tackling it.
From Obligation to Expectation
Before the COVID era, physicians were already beginning to move from the assumption that emergency department (ED) call was an obligation of medical staff membership to an expectation that they should be paid. Once this fundamental shift had taken place, they were keen to know how much they would be paid for call.
In fact, physicians were increasingly dictating this amount to hospitals before committing to assuming ED call. While hospitals’ compensation of physicians on the medical staff to provide on-call coverage was in years past regarded as implausible by hospital management, it has become widespread.
Already, factors such as the strict requirements imposed by EMTALA on hospital EDs, vast increases in the number of uninsured patients and in ED volume, as well as physicians’ alarm over decreasing reimbursements, had culminated in the subsidence of the previously harmonious but voluntary working relationships between hospitals and physicians.
These conditions set the wheel in motion, and before long many physicians were demanding compensation for on-call coverage.
In the last 10 years, the volume and complexity of emergency department call coverage arrangements across the US has only intensified further. Today many hospitals are expected to keep a roster of on-call providers to meet regulatory compliance commitments and maintain their trauma status. By last year, ED call coverage had the average hospital forking out nearly $4m for 12 paid specialty panels.
The Complexity of Call Coverage
Hospitals are keen to identify fair compensation for the physician’s burden of being available for a call. Conveniently, there are multiple ways to structure the compensation for call arrangements. A daily stipend is by far the most common, with 70% of physicians paid using this system. Annual rates are the second most popular compensation method, followed by an hourly stipend.
MGMA (Medical Group Management Association) estimates that the current US hourly on-call pay rates range from $16.67 per hour to nearly $23 per hour at the high end.
Several factors contribute to the complexity and type of call coverage arrangement, all of which must be taken into account when maintaining regulatory compliance and calculating FMV. The physician’s specialty, the hospital’s trauma center category, and the associated conditions (restricted or unrestricted, where the physician is location-independent and carries a pager) all have a bearing on the value of call compensation.
The nature and value of the call coverage agreement is influenced by the overall burden of availability on the physician, patient acuity, the number of consultations carried out via telephone or video conference in the course of a specific coverage period, the number of times a physician needs to return to the hospital for associated follow-ups, and the frequency of uninsured and underinsured patients.
Specialty isn’t the only important factor, though. The size of the hospital is likely to affect the physician’s rate; not surprisingly, large city hospitals with well-equipped trauma centers and exceptionally high rates of emergencies can often afford a more generous call policy. It’s common that a facility with a smaller emergency department will only provide on-call pay for a few select doctors in select specialties.
Independent providers are typically the most generous, paying on average 26% more for hospital on call pay than facilities owned by large health systems.
Government Scrutiny and Regulatory Compliance
An increase in the number of call arrangements has also attracted closer government scrutiny. The federal Stark Law and Anti-Kickback Statutes demand that hospitals adhere to stringent regulations when structuring their call coverage compensation arrangements. The Office of the Inspector General (OIG) warned of a ‘substantial risk’ that on-call pay, if poorly structured, could be used to disguise unlawful remuneration.
Hospitals are now turning to third-party healthcare consultants and legal counsel to provide expertise and ensure their compliance. The risk of fines and reputational damage is severe, so it’s more clearly evident than ever before that call coverage arrangements must be structured properly. This also means that all compensation must be in accordance with fair market value (FMV) to satisfy regulations.
Provisions for multi-facility concurrent call coverage or multi-specialty concurrent call coverage must also be taken into account. In both cases, further valuation studies are required. Some call agreements specify a minimum number of uncompensated call shifts each month, and the physician is expected to meet this benchmark as part of his or her official duty (especially when employed by the hospital).
With these agreements, separate call compensation is only applied for call shifts in excess of the minimum required. Each factor must be considered and carefully analyzed by the valuation consultant to decide an appropriate FMV rate.
Understanding FMV is a headache that has many hospital managers quickly searching for expert support. Fortunately, Vector Medical Group can help you with this. It’s our job to guide hospitals and medical personnel on ED call by tackling the issue of call ownership and compensation as a negotiation.
We raise the level of dialogue between physicians and hospitals
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