5. What is the approximate time to complete
each in-person case/consult? Longer cases
usually result in higher rates.
6. What is the trauma designation of the hospital? Hospitals with a trauma designation
normally have higher volume and potentially higher acuity emergent cases, resulting
in higher rates.
7. Does the physician receive guaranteed or
productivity-based compensation? This is
usually in the form of production bonuses or
guaranteed payments for indigent patients.
8. Who is at-risk for the
9. What is the payer mix (i.e. uninsured,
Medicaid, Medicare)? A poor payer
mix may justify higher reimbursement if the physician is at-risk for
10. How many physicians will be providing
the call coverage? A low supply of physicians available to provide the coverage may
warrant a higher rate.
11. What is the market (local, regional,
national) paying for call coverage services
in the same specialty?
12. What are the alternatives? Locum tenens
coverage is normally used as a last resort
and is typically the most expensive option.
Hospital/health system administrators
face the difficult task of determining the
compensation to pay physicians who provide
unrestricted call coverage services. Part of
the difficulty arises, because the rate must
be competitive, but also be consistent with
FMV due to various regulations, including
the Stark Law and Anti-Kickback Statute. The
Stark Law prohibits a physician from referring Medicare patients for designated health
services to an entity with which the physician
(or immediate family member) has a financial relationship, unless an exception applies. 3
The Anti-Kickback Statute prohibits offering,
To further compound the issue, admin-
istrators must ensure the determined rate is
financially viable for the hospital. As previ-
ously shown, the rate that may be paid to the
employed physicians may not necessarily be
the same as the rate paid to physicians serv-
ing as independent contractors. Normally,
a higher rate is warranted for independent
contractors due to the independent physicians
being responsible for their own benefits, CME,
and malpractice insurance and typically being
at-risk for collections for professional services
rendered. However, it is not uncommon for the
same rate to be paid as long as both rates are
consistent with FMV.
Key takeaways and nuances
Physician on-call coverage arrangements are
subject to various laws and regulations, which
mandate/require the compensation paid to
physicians be consistent with FMV. If there is
a concern regarding a particular engagement,
hospital/health system administrators should
ensure physician compensation arrangements
are consistent with FMV by seeking an independent valuation firm to complete an FMV
analysis and reviewing the arrangement with
legal counsel. In addition, remember the following prior to executing and/or reviewing a
call overage agreement:
1. Understand what type of coverage is
needed (restricted vs. unrestricted).
2. Understand who will be providing the coverage (employed vs.
3. Understand who will be responsible for
covering the physician’s benefits, CME,
and malpractice insurance (hospital/health
system vs. physician).
4. Understand each of the value drivers.