Maintaining fair market value (“FMV”) of physician compensation is a crucial aspect of healthcare compliance, and call compensation is a key component with unique complexities.
Both the Physician Self-Referral Law (“PSL”)—commonly referred to as “Stark Law” and the Anti-Kickback Statute (“AKS”) are typically relevant for call coverage arrangements. Over the last two decades, call compensation has become common, and hospitals often have some specialties with and some without separate call compensation. Furthermore, the complexity of such arrangements has increased to ensure that hospital needs are met without paying for unnecessary services.
Key Considerations for Call Arrangements
First, it is important to consider structural nuances in call arrangements. Besides the specialty of the provider, the most relevant structural items include:
- Which party bills and collects for professional services
- Shift length
- Whether coverage is concurrent with multiple facilities
- Who is responsible for benefits and malpractice costs
- Primary versus back-up call
- Telemedicine versus in-person coverage
- Stacking on top of other compensation for the provider
In addition to the structural components of a call arrangement, several additional factors affect the burden of taking call coverage. Call burden is a key driver of how valuable a call service is, with the most common call burden inputs being:
- Size of the call panel / expected shifts per month providing call
- Frequency of in-person responses
- Frequency and length of phone calls
- Response expectations
- Acuity of patients
- Local market factors
In addition to the above, it is crucial to understand the weaknesses of market survey data for call coverage. While this data can be helpful, it does not do a good job of illustrating how call pay changes depending on the level of call burden. Furthermore, one must adjust to account for the fact that regular clinical compensation often includes a certain amount of unpaid call coverage.
Best Practices
When considering a health system’s call coverage arrangements, having an organized and consistent approach can help ensure fairness and competitiveness and make compliance straightforward. A review of arrangements is often helpful and generally consists of the following:
- Review all coverage services for the need
- Evaluate commercial reasonableness
- Understand any potential stacking issues with clinical compensation
- Ensure fairness between and within specialties
- Review of the appropriateness of call pay structures and amounts
- Establish a process for both regularly reviewing and adjusting current arrangements as well as establishing new arrangements
Utilizing a professional to conduct a review of arrangements and processes can be beneficial to ensure you are keeping up with market norms, call burden is evaluated appropriately, and the economics of the arrangements are reasonable.
Contact Us
For more information on this topic, please contact a member of Withum’s Healthcare Valuation Services Team.
