Healthcare Law Blog

Get Ready to Negotiate: OIG Authorizes Hospitals to Pay Physicians for Call Coverage

Since the enactment of EMTALA in 1986, hospitals have struggled with providing sufficient call coverage to meet federal requirements as physicians have been increasingly hesitant to take on the added responsibility, cost, and risk of responding to emergency department requests for consultation.  With patients often presenting in increasingly acute conditions with no health insurance coverage, physicians understandably find themselves between a rock and a hard place as utilization of hospital emergency departments has skyrocketed, particularly in Eastern Kentucky.  And, it is becoming increasingly difficult to see these patients in the hospital emergency departments without also seeing the patients for follow-up in private physician offices often without payment. Thus, the movement for hospitals to pay for physician call services started amid a tangled web of intricate financial relationships, power struggles between hospitals and medical staff, and a statutory and regulatory maze of the Stark Law and Anti-kickback Statutes.  Finally, good news is on the horizon as a result of a series of recent Department of Health and Human Services Office of Inspector General’s Advisory Opinions, which essentially give the okay for a hospital to pay a per diem fee to specialists providing unrestricted on-call coverage for hospital emergency departments within certain parameters.  For physicians, these OIG Opinions give clear guidance and should be a tool to negotiate payment for call within the parameters of fair market value.

Generally two types of call coverage are provided by physicians including unrestricted call coverage, which allows for a physician to remain off the hospital premises but available to report for duty, and restricted call coverage, which requires a physician to remain on hospital premises. On-call pay is the hospital’s payment for access to physicians providing call coverage and has increased by about 48% from 2007 according to some reports.

The most recent of the OIG’s Advisory Opinions AO-12-15 authorized a non-profit hospital’s arrangement to pay a per diem fee to specialists providing unrestricted on-call coverage under a one year contract that required the physician to respond within requested times and to provide appropriate inpatient and follow-up care to admitted patients.  The favorable review included the following considerations:

• The hospital would pay a per diem fee, calculated annually in advance

• All specialists on the hospital’s medical staff are offered the opportunity to participate

• Physicians agree to provide inpatient care as well as outpatient follow-up care following discharge without additional compensation by the hospital

• A uniform method is used by the hospital to equitably allocate call

• The per diem rates are commercially reasonable and at fair market value

With the OIG’s Advisory Opinions in hand, physicians are in a good position to demand that hospitals pay for call coverage by developing an equitable mechanism that recognizes the importance and necessity of their services.  While payment for services may vary based upon the specialty involved, a hospital’s medical staff may be in a good position to advocate for a comprehensive payment methodology.  Some of the factors that should be considered include:

• On-call pay rates should vary by the specialty and reflect fair market value  Generally, surgery areas may be paid more than medical specialties

• The frequency of the call coverage and number of available physicians should factor into the rate that is paid

• The likelihood that a physician will be called in when providing call coverage

• Uncompensated care should be considered when establishing payment rates

• Employed physicians may be paid for call subject to the same rates excluding payment for services furnished as part of the employment contract

• Compensation for calls per shift provided in excess of a specified number

With clear guidance from the OIG about how to avoid statutory and regulatory hurdles, physicians and their respective hospital medical staff bodies now have the opportunity to negotiate compensation for call services. Given shrinking Medicare and Medicaid reimbursement coupled with the ever increasing complications of maintaining compliance with practice requirements like electronic medical records, compensation for the provision of call services could be helpful to physicians as the path is forged through the Accountable Care Act’s changes.

Lisa English Hinkle is a Member of McBrayer law.  Ms. Hinkle concentrates her practice area in health care law and is located in the firm’s Lexington office.  She can be reached at lhinkle@mcbrayerfirm.com or at (859) 231-8780, ext. 1256. 

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This article does not constitute legal advice.