On-call arrangements continue to be an ongoing challenge for hospitals and healthcare systems. Ensuring continuity of coverage for not only emergency departments (ED) but for inpatient specialty practices has proven difficult for a variety of reasons. Many hospitals are required to maintain a panel of on-call physicians in order to preserve their trauma status and for regulatory compliance requirements.

However, the volume and acuity of ED coverage has increased across the country. Those changes, coupled with the lowering supply of physicians and advanced care practitioners and providers’ increased focus on work-life balance, have resulted in overall increases in on-call pay in order to ensure proper coverage.

What should you consider when setting up on-call arrangements?

Structuring Coverage Arrangements

There are a number of ways to structure compensation within an on-call arrangement; as you can see in the chart below, a daily stipend is, without a doubt, the most common payment structure. Regardless of the compensation method, hospitals are finding more and more ways to compensate physicians for the burden of being on-call. We continue to see the percentage of physicians that receive payment for on-call services increase. According to Sullivan Cotter Provider On-Call Compensation Survey and MGMA On-Call Compensation Survey, an average of 50% to 70% of hospitals are now paying their physicians for on-call services.

Call Pay Structure Graph

Concurrent Coverage

Concurrent coverage comes in many shapes and sizes. The important thing to note when considering the utilization of a concurrent coverage model is that this coverage is provided by a single physician. This means a single physician is available to multiple facilities or multiple service lines. As summarized in the chart below, there are many pros and cons to concurrent call coverage. One pro is the ability to cover multiple facilities or multiple specialties with a single call panel. This allows a hospital to maintain the needed coverage, even with limited physician supply and makes for easier tracking of the on-call panel. However, this can also be considered a con to providing concurrent coverage, because it requires a physician to be available to more than one facility or more than one specialty at any given time potentially increasing the burden and rate of pay for that coverage.

Pros and Cons Concurrent Coverage

Fair Market Value (FMV)

One compliance best practice is the evaluation of terms and compensation within a proposed arrangement in two ways. First, confirm that the arrangement meets a Stark exception and/or Anti-Kickback Statue safe harbor (as applicable) and second, confirm that compensation is FMV, commercially reasonable, and does not take into account the volume or value of referrals. In determining FMV for on-call arrangements, there are number of important components to consider:

  • Physician Availability;
  • Burden of Coverage;
  • Acuity of Cases;
  • Facility Designations; and
  • Payor Mix

Considering the burden of an on-call panel can take a few different forms, it’s important to include both the number of times the physician takes a phone call during an on-call shift and the number of times a physician is required to present on-site during an on-call shift. While a phone call doesn’t necessarily result in any type of face-to-face consultation or patient procedure, it does indicate how often the physician is interrupted during a call shift. On the other hand, the number of times that a physician presents on-site is a major indicator of the value of a call coverage panel. These factors, along with the acuity of cases, are indicators of what providers deal with while they are on-call.

Another important indicator of FMV is potential reimbursement for services provided when on-call. This has more of an impact for independent contractors than employed physicians due to billing and collection responsibilities. In considering reimbursement, it’s important to also consider the acuity of the cases as well as a facility’s payor mix. Reimbursement and the potential uncompensated care for self-pay patients or under-compensated care can have a potentially large impact on FMV and should be considered carefully.

LBMC helps you keep a PULSE on Fair Market Value (FMV)

Keeping a PULSE on FMV compensation can be complicated and time-consuming. Healthcare organizations are facing growing challenges. As a national leader in healthcare advisory services for over 30 years, our FMV calculators provide solutions for a variety of simple to complex provider compensation arrangements including: employment, call coverage and administrative services. And best of all, they’re fast and can be completed in less than a minute. If your healthcare organization is looking for an automated, web-based solution to assess compensation terms, the PulseFMV Calculator is your answer for defensible FMV support.

Content provided by LBMC Healthcare Compensation Valuation professional Jessica Webster.