Factors that Influence Fair Market Value Call Coverage Compensation
Does your organization compensate physicians to provide call coverage to your emergency department? If so, it might interest you to know that such arrangements continue to be scrutinized by regulatory bodies. Indeed, the Office of the Inspector General of the Department of Health and Human Services ("OIG") has stated that on-call compensation presents considerable risk because physicians may demand this compensation as a condition of doing business at the hospital. Moreover, the OIG has historically expressed concerns that the payments may disguise kickbacks or exceed fair market value for the actual services provided. Accordingly, as you evaluate your existing arrangements or consider entering into new call coverage arrangements, while not an all-inclusive list, the following items should be considered when assessing fair market value compensation for call coverage compensation arrangements:
Likelihood of having to respond when on-call at the emergency department (e.g., the number of calls received per day, the number of calls requiring emergency department visits, and the likelihood of performing surgery, as applicable).
Heightened malpractice risk from providing call coverage to all patients.
Time of day (i.e., during business hours or after business hours) and week (i.e., weekday versus weekend) call coverage occurs.
Length of call coverage shift (i.e., hours of required call per day).
Patient acuity (i.e., facility trauma status) the physician is likely to face while providing call coverage.
Payer mix and, subsequently, the collections that physicians expect to receive while on-call for providing professional services.
Physician supply and demand in the local market and medical staff bylaws that permit physicians to take or be excluded from call coverage.
Specialty-specific factors (e.g., orthopedic surgery call may be substantially more complex and/or burdensome than otorhinolaryngology coverage).
Frequency of participation in call rotation compared to "normal" levels for a given specialty.
Type of call coverage (e.g., restricted call coverage requires the physician to remain at the hospital while unrestricted call coverage does not require the physician to remain at the hospital).
Primary (i.e., first to respond), secondary (i.e., back up to primary physician), or concurrent (i.e., providing coverage to multiple facilities at the same time) call coverage.
In summary, the determination of fair market value compensation for call coverage is contingent on a variety of elements that should be evaluated thoroughly. PYA recommends that the above factors, call coverage benchmark survey information, market comparable data, and other factors be considered when determining fair market value for these transactions. To continue discussing call coverage compensation issues or other fair market value compensation matters, please contact Marty Brown or Lyle Oelrich at (800) 270-9629.
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