Coker Connection Newsletter

Understanding Call Pay Compensation Methods

Understanding Call Pay Compensation Methods

  • August 8, 2019

Over the last several years, the volume and complexity of call coverage arrangements have increased nationwide. Due to declining physician supply, as well as a growing population of uninsured patients, physicians are more reluctant to provide uncompensated call coverage. Additionally, call agreements are becoming more complex. There are various ways to structure call arrangements, with daily stipend (per diem) compensation more common than other options. Regardless of the method, however, hospitals are finding ways to compensate physicians for the burden of being available for call.

Call Compensation Methods1 2019
Hourly Rate 22.3%
Daily Stipend 45.4%
Weekly Stipend 1.6%
Monthly Stipend 7.4%
Annual Stipend 9.0%
Per Work RVU 2.2%
Per Procedure 0.9%
Other Compensation Method 11.0%

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. The U.S. Department of Health and Human Services OIG has stated, “There is a substantial risk that improperly structured payments for on-call coverage could be used to disguise unlawful remuneration.”2

To avoid the risk of violations of unlawful payments, hospitals turn to third-party healthcare consultants and legal counsel to provide guidance and ensure compliance. It is vital that call coverage arrangements be structured properly and that compensation is consistent with fair market value (FMV) in order to comply with regulations. Independent and certified healthcare valuators are regularly asked to opine on the key terms of call arrangements that are subject to scrutiny, provide appropriate FMV opinions, and help hospitals stay within regulatory guidelines.

Various 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. Call factors affecting FMV include medical specialty, trauma center level, restricted or unrestricted call requirements, call shift duration, expected calls per shifts, phone consults per shift, estimated time per call, expected number of returns to the facility, case intensity, patient follow up, and the like.

Additionally, call coverage arrangements may include a provision for multi-specialty concurrent call coverage and/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, with separate call compensation only for those call shifts in excess of the minimum periods required. Each factor must be considered and carefully analyzed by the valuation consultant 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.3

Kickbacks can come in various forms beyond obvious cash exchanges, tangible gifts, or traceable excess compensation. Kickbacks are any items of value that may unlawfully be provided in exchange for referrals.4 Examples of potential kickbacks include physician office space rented below FMV, a job promotion, a medical directorship, or a call coverage agreement. 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 keeping compliant. Failure to set physician call coverage compensation at FMV could result in civil and/or criminal penalties.

Call coverage arrangements are often between hospitals and physician groups within a clinically integrated network or other aligned organizational relationship. 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 emerging field of telemedicine arrangements. As technology improves and patient-physician access increases beyond the barriers of geographic location, the expectation of call coverage may begin to include a measure of telemedicine services. Coker is fortunate to work alongside healthcare organizations that are delivering cutting edge solutions in the area of telemedicine, ensuring both compliance and consulting services for our clients. At its essence, call coverage has always been an abridged version of telemedicine, providing care for patients in need.

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

1. 2019 MGMA Provider Compensation and Production Report: On-Call Pay. Accessed August 5, 2019.

2. OIG Advisory Opinion No. 12-15. Accessed August 5, 2019.

3. ibid.

4. Accessed August 5, 2019.

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