Understanding Call Pay Compensation Methods

Over the last decade, the volume and complexity of emergency department call coverage arrangements have increased nationwide. Many hospitals are required to maintain a roster of on-call providers due to regulatory compliance requirements and to preserve their trauma status. With a declining physician supply and physician burnout that has increased over recent years and a large population of uninsured patients, physicians are more reluctant to provide uncompensated call coverage.

There are numerous ways to structure the compensation for call arrangements; however, a daily stipend is significantly more common than other options. Regardless of the method, hospitals are finding ways to compensate physicians for the burden of being available for a call. The table below summarizes the most popular compensation methods.

‍‍The increase in the number of call arrangements has also generated heightened government scrutiny. Stark Law and Anti-Kickback Statutes require hospitals to follow guidelines and regulations in order to structure call coverage compensation arrangements appropriately. Within Advisory Opinion No. 12-15, the Office of the Inspector General (OIG) has stated, “There is a substantial risk that improperly structured payments for on-call coverage could be used to disguise unlawful remuneration.”

Hospitals turn to third-party healthcare consultants and legal counsel to avoid the risk of unlawful payment violations, provide guidance, and ensure compliance. Call coverage arrangements must be structured properly, and compensation must be consistent with fair market value (FMV) to comply with regulations.

Several factors contribute to the complexity and variety of call coverage arrangements, all of which must be taken into consideration when ensuring regulatory compliance and determining an FMV opinion. A physician’s medical/surgical specialty, the hospital’s trauma center level, and the underlying call requirements (restricted or unrestricted) significantly impact the value of the call compensation. Additionally, consideration must be given to the overall burden of availability, patient acuity, number of telephonic consults during a coverage period, number of times a physician must return to the hospital, and the burden of the uninsured and underinsured payor mix.

Call coverage arrangements may also include a provision for multi-specialty concurrent call coverage or multi-facility concurrent call coverage, each of which requires further valuation analyses. Some call agreements require a minimum number of uncompensated call shifts per month embedded as part of the physician’s duties (particularly in the case of a hospital-employed physician), with separate call compensation only for those call shifts in excess of the minimum periods required. The valuation consultant must consider and carefully analyze each factor to calculate an FMV rate appropriately for the specific arrangement.

Regarding the necessity for a thorough evaluation of call compensation, OIG has stated:

The anti-kickback statute neither compels hospitals to pay for on-call services nor compels physicians to provide on-call services without compensation. Rather, the statute requires that parties refrain from making unlawful kickback payments in any form. Each on-call coverage arrangement must be evaluated under the anti-kickback statute based on the totality of its facts and circumstances.

Virtually all call arrangements are between physicians and hospitals to which the physicians refer patients. Therefore, it is vital that a third-party healthcare consultant assess any call arrangement in its totality. An independent analysis will help identify areas of potential risk, provide any suggestions for structural improvement, and assist the hospital client with maintaining compliance. Failure to set physician call coverage compensation at FMV could result in civil or criminal penalties.

Call coverage arrangements are often between hospitals and physician groups within clinically integrated networks or other aligned organizational relationships. The dynamic nature of such structures may affect the FMV conclusions for a given situation and call coverage arrangement.

The future of call coverage compensation continues to evolve, especially as it applies to the advances in telemedicine arrangements, which have grown exponentially over the last three years as a result of the global COVID pandemic. With advances in technology and increased patient-physician access beyond the barriers of geographic location, call coverage increasingly includes a measure of telemedicine services. This is particularly true for specialties such as radiology and psychiatry, or hospitals in remote areas.

Coker has a long history of helping hospitals navigate the complexities of integrated networks and alignment and keeping in compliance with various government regulations. We look forward to assisting hospitals as technology continues to shape the future of call coverage arrangements and healthcare in our lifetime.

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Originally published August 8, 2019. Last updated August 8, 2023.