Compliance Today - June 2017

Co mpl i a nce To d a y J un e2 017

The Emergency Medical Treatment and Labor Act of 1986 (EMTALA) created a need for hospitals that participate in
Medicare to have physicians available to provide
emergent medical services to patients in the
hospital’s Emergency Department (ED). Thus,
EDs are either staffed or have physi-
cians available to respond to emergent
cases within a predetermined time-
frame. As a result, there has been a
proliferation of hospitals entering into
agreements with physicians to provide
both restricted (i.e., remain on-site) and
unrestricted call coverage services.

This trend continues today and has created the
need for hospitals to understand both the finan-
cial and regulatory impact when determining
the appropriate call coverage rates. In addition,
one of the most commonly misunderstood
concepts relates to the compensation that can
be paid to physicians who are employed by a
hospital/health system versus physicians who
serve as independent contractors.

Unrestricted call coverage is often defined as “off-site,” “availability,” or “beeper” coverage where an on-call physician must be available to report to the hospital in person within a set timeframe (typically 30-45 minutes, but this may vary by state) for emergent cases. Hospital administrators are faced with a dilemma when preparing unrestricted call coverage agreements—determining the appropriate rate to pay both employed and independent contractors. One may intuitively think that the rate should be the same, since the exact same service is being provided regardless of the employment status of the physician. However, this may not be the case, because the value drivers of each rate are considerably different. In fact, paying the same rate could potentially lead to a rate that may not be consistent with fair market value (FMV). FMV is

by Bartt B. Warner, CVA
Should on-call
independent contractors
be compensated more
than employed physicians?

» Physician on-call coverage arrangements are subject to various laws and regulations.

» Understanding the underlying value drivers of unrestricted call coverage is crucial.

» The fair market value (FMV) rate for independent contractors is normally not the same as the FMV rate for employed physicians. » Understand the Stark Law and Anti-Kickback Statute and review with internal legal counsel for compliance.