Valuation Issues Abound in Physician Emergency On-Call Pay

Median expenditures for emergency department (“ED”) call coverage, according to the 2012 Sullivan, Cotter & Associates Physician On-Call Pay Survey Report, increased for both trauma and non-trauma hospitals between 2009 and 2012. So paying close attention to fair market value in ED on-call arrangements is as important as ever. This means that filtering through anecdotal information is critical to avoid missteps when hospitals enter into on-call payment arrangements.

An important distinction in ED on-call pay is found in the difference between independent physicians and many physicians employed by the hospital. Two central economic concepts related to ED on-call pay – compensation for physician availability and reimbursement for uncompensated care – may be vastly different for an independent and an employed physician.
  • Availability relates to the physician’s contractual obligation to respond to contacts by the ED within a specified time.
  • Uncompensated care refers to the care delivered by the physician with little or no payment for the service provided, usually because the patient is uninsured.

Let’s look at the value implications of availability and uncompensated care for independent and employed physicians.

Independent Physicians: Doctor A is in private practice with active medical staff privileges at the local hospital. As part of an agreement with the hospital to provide ED coverage, Dr. A must respond to calls from the ED within 30 minutes. For the patients he sees, Dr. A receives about 10 percent of his standard fee, as most patients are unable to pay for care in the ED and for follow-up care in the hospital and in Dr. A’s office. Dr. A receives $800 per 24-hour shift.

Employed Physicians: Doctor B is employed by the same hospital, covering a similar rotation to that of Dr. A. However, she receives a guaranteed salary and an incentive based on Work Relative Value Units (“WRVUs”). Her employment contract requires that she provide ED coverage, and when she sees patients in the ED and later for follow-up care, she receives WRVU credit for incentive compensation regardless of the patients’ ability to pay. Dr. B receives no additional on-call pay outside her base-plus-incentive compensation arrangement.

The above example illustrates that separate on-call payments to Dr. B could result in double-payment if employment compensation arrangements already in place are not considered. “Stacked” arrangements like this can potentially result in overpayment, so hospitals and physicians need to understand these nuances. Overpayments create the risk of Stark law, anti-kickback statute, and false claims act violations, with penalties potentially in the millions of dollars.

Here are other important factors to keep in mind when faced with anecdotal information and when establishing the true value of the on-call arrangement:

Frequency – How often does the physician get called when on duty? If called, how often must the physician respond in person? Once called in, is the physician there for the rest of the night?

Intensity – How intense is the service? Can it be solved by a phone call, or does the call usually result in a patient encounter at the hospital or a surgical procedure?

Acuity – How sick or severely injured are the patients? Trauma centers generally have patients with higher acuity, meaning higher risk to the patient and physician.

Rotation burden – Surgeons in a rotation of 1:2 (every other night/weekend) are more heavily burdened than physicians in a group of six surgeons that come in once every five nights and every fifth weekend.

Concurrency – Is the doctor covering multiple hospitals? If multiple facilities are covered, yet availability is limited when the doctor is on a case at one of the covered hospitals, the remaining hospitals get less value.

Information about one doctor’s on-call pay can be vastly different than the value of another. Published surveys are useful tools, but they are easily susceptible to misunderstanding and misapplication. Be sure to consider the factors presented above (and others) to get to the real value. Failure to do so can result in heightened risk that payments are unable to sustain qui tam or government challenges.

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Topics: Healthcare Valuation

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