Are you feeling pressure from your physicians to pay for call coverage? You are not alone. Call coverage compensation has been an increasingly salient issue for many of our clients. Avoid these common mistakes:
Making one deal at a time
Reacting separately to each physician’s situation is one of the biggest mistakes hospital executives make. This failed approach requires individually negotiating coverage agreements when each need arises. Time is wasted duplicating analyses and remodeling the agreement structures, which often result in different contracts and varying terms for each physician. This approach can push more physicians to request payment and can create actual or perceived inequity.
We strongly recommend hospitals take a more proactive and comprehensive approach to call compensation planning. A systemic call coverage plan should define proper agreement structures and dictate which specialties qualify for call pay based on OIG sanctioned criteria. Because these parameters are pre-decided, the hospital does not waste time with lengthy negotiations. This type of comprehensive planning is also more likely to receive physician buy-in and will result in long-term stability and success.
Failing to involve physicians in the planning process
Physician involvement is crucial when drafting a call compensation plan. Too often, however, hospital executives define call pay parameters in the absence of balanced physician input. The resulting plans are not fully understood by the physicians and do not adequately address the needs of the medical staff. This can create a sense of inequity among physicians, and can result in mistrust toward the hospital.
Instead, we recommend convening a group of administrative and physician leaders to spearhead the plan’s creation, or use of the MEC. Physicians and executives should openly discuss and define mutual objectives for the process (including budgetary objectives), while physician input should be used to understand and define the burden of call associated with each specialty. This approach will help build consensus among the medical staff and create a sense of ownership in the final outcome. The resulting plan is more likely to be perceived as fair and equitable by the medical staff.
Not understanding the OIG guidance
Physicians are pressuring hospitals to quickly develop call coverage compensation agreements. As a result, hospitals are rushing to construct agreements without taking the time to educate themselves or their physicians. There are, however, a variety of regulatory issues that must be considered when offering call coverage compensation. Failure to understand these issues may result in non-compliance and lead to potential legal issues.
In order to minimize regulatory risk, the hospital and physicians should have an adequate understanding of relevant OIG opinions. The hospital should understand whether there is a legitimate, unmet need for call coverage, and whether the payment rates are within fair market value. The agreement structures should be carefully considered and chosen in order to minimize the risk of fraud and abuse. We also recommended involving physicians in all regulatory discussions, as this will enhance their understanding of the decision process.
Not relying on data
Many call pay arrangements are constructed without sufficient use of quantitative data. Hospitals and physicians often use general perception as an indicator of call burden, while rates are determined using anecdotal evidence. This lack of data could have serious regulatory and financial consequences, as the actual burden of call may not sufficiently justify call pay, or the compensation rate may be above fair market value.
We strongly recommend a data driven approach to call coverage planning. We work with clients to quantitatively measure call burden by studying the number of ED consults per physician, the number of surgical cases from ED admissions, case mix and average length of stay by specialty, call panel size by specialty, or any other relevant data. These metrics can be weighted to create a composite score reflective of actual call burden, and can reveal which specialties warrant call pay compensation. When determining rates for each specialty, we recommend the use of survey data to benchmark compensation against national data. Sullivan Cotter and MGMA both provide survey related to call pay compensation.
Assuming call pay is the solution
Many hospitals insist on using simple call pay arrangements for complex situations despite the existence of several other appropriate alternatives. When physicians ask for call pay, they are actually asking for fair compensation in return for making their services available. Call pay is a simple mechanism to achieve this result, but is not always the most appropriate. Our clients often struggle to make a traditional call pay arrangement work for their most complex situations, like ensuring sufficient anesthesia coverage. In these situations, a call pay arrangement will not adequately meet the hospitals’ and physicians’ needs.
We recommend clients step back and evaluate other options before forging ahead with a call pay agreement. Employing physicians, utilizing locum tenens, providing subsidies, modifying bylaws, developing co-management arrangements, and establishing professional services agreements are all viable alternatives to direct compensation for call.
A professional services agreement, for example, allows the hospital to provide fair market value payments in exchange for pre-defined services. The scope of these services can be varied depending on the physicians’ and hospital’s specific needs. In some cases, this may be a superior alternative to a traditional call pay agreement.
