Physician call coverage has always required hospitals to balance patient needs along with physician availability, compensation and related compliance. Some additional growing considerations include: physician supply shortages, burnout and work-life balance concerns, broader roles for advanced practice providers (APPs), expansion of telemedicine and increases in uninsured patients.
A compensation model that worked several years ago may not align with how coverage operates today. Hospitals should periodically review coverage duties and schedules to determine whether compensation still makes sense based on the facts and circumstances in today’s environment.
Call Coverage Factors
No single factor determines fair and compliant call coverage arrangements. To get a good baseline understanding of a specific call coverage arrangement, start with some practical questions like the following:
- Specialty: What qualifications or sub-specializations are required and how difficult is it to find coverage?
- Coverage Type: Is coverage unrestricted, restricted (on-site) or telehealth?
- Coverage Burden: How often is the physician called, required to respond in person and/or asked to consult?
- Trauma Designation: What is facility’s trauma level and patient acuity for the specialty?
- Payor Mix: What share of patients are on Medicare, Medicaid, or Uninsured?
- Provider Type: Are physicians employed, independent contractors or another model?
- Billing: Is the Hospital or the Physician responsible for billing and collecting?
- APP Support: Are nurse practitioners, physician assistants or other APPs involved in coverage?
- Telemedicine: Can remote coverage be provided or can it replace or supplement the panel?
- Call Frequency (Panel Size): How many providers are in the rotation? Is this sustainable?
- Fair Market Value: Is pay consistent with fair market value and well documented?
- Commercial Reasonableness: Is the arrangement necessary and does it make business sense (absent referrals)?
Together, answering these questions will help hospitals better understand the complexities of call coverage and align organizational objectives with compliant call coverage arrangements.
What’s Changing in Call Coverage
Many hospitals must maintain on-call panels for trauma designation or to meet other regulatory requirements. Certain specialty call coverage schedules (e.g., Orthopedic Surgery, Neurosurgery and Plastic/Facial Trauma Surgery) continue to be difficult to maintain. Many new physicians don’t want to provide call, existing physicians are less willing (or require higher compensation) to provide call and provider retirements continue to shrink the pool of physicians available for call. Physicians in all phases are placing more weight on sustainable schedules and work-life balance.
Context matters. A specialty with a large call panel (7-10 physicians) and only a few on-site activations (<1 per week) faces a very different situation than a specialty with a small call panel (1-2 physicians) called on-site frequently (in person 2-3 times per shift). Organizations should evaluate whether their model is sustainable over time, since excessive burden makes recruiting and retention more difficult.
Technology is changing what “on call” means for some specialties. In some instances, telemedicine coverage can replace or supplement traditional call, particularly when local specialty resources are limited. Tele-neurology (including stroke), tele-psychiatry and tele-ICU can extend specialist access without requiring every provider to be on-site. Telemedicine coverage will not replace every traditional model, but can improve access, fill gaps, shorten response times or reduce the burden on a limited panel.
Considering the Role of APPs
Physicians are no longer the only providers of call coverage. Nurse practitioners, physician assistants and other APPs may support evaluations, triage, inpatient coverage, care coordination and follow-up, changing the amount and type of physician work. Physician oversight and scope-of-practice rules also need to be understood.
Hospitals should look at what services APPs can effectively and compliantly provide and how that impacts physician workload, response expectations and coverage needs. Compensation should reflect the coverage the physician actually provides, particularly when APPs share the call burden.
Under EMTALA, hospitals must maintain a list of on-call physicians and according to CMS, APPs cannot be listed as first call. Some organizations use a separate call schedule for APPs, as permitted, and pay APPs for call coverage most often through a per-shift stipend or hourly rate.
Understanding Common Compensation Structures
Call arrangements vary in physician availability and compensation structure. Definitions vary by organization, so hospitals should spell them out in each arrangement.
Example types of call coverage:
- Restricted: Must remain on the premises during the shift
- Unrestricted: Can be off-site (available by phone) within a set timeframe (usually 30 minutes)
- Telephonic Only (or Telemedicine): Available by phone, with no on-site requirement
- Concurrent: One physician is available to more than one facility or service line at the same time
- Backup: A second physician is available if the primary physician is unavailable
Example payment structures and components:
- Daily or per-shift stipends: A flat amount per day or shift
- Hourly rates: Pay by the hour based on type of coverage
- Activation payments: Flat rate paid only when called in on-site
- Excess call only: Pay only after a set amount of uncompensated call
- Guaranteed reimbursement: The hospital guarantees payment for clinical services provided
Whichever structure is utilized, hospitals should take care to avoid paying twice for the same provider time. For example, an employed physician may receive a clinical base salary which may already include some level of uncompensated call, so paying call pay from day one may create compensation stacking issues. There is a lot of flexibility in the structure of compensation, so long as the arrangement is fair market value and commercially reasonable.
Fair Market Value (FMV) and Commercial Reasonableness (CR)
FMV and CR are vital legal and regulatory standards. To create a compliant call arrangement, the following key questions are a great place to start. Why is the coverage needed? What is the physician being asked to do? How burdensome is the call? How difficult is it to find qualified providers? How was compensation determined and supported?
The Stark Law and Anti-Kickback Statute generally require that payments to physicians be FMV and the arrangement be CR. Hospitals must ensure they have sufficient documentation, whether that is determined internally through a consistent and defensible process or through a highly qualified valuation expert outside the organization with deep understanding of all the call coverage nuances. Documentation of the process is critical to surviving a legal or compliance review.
For hospitals relying on internal benchmarks or market surveys alone, watch for these pitfalls:
- Relying on limited survey data or anecdotal “market” rates paid by other facilities
- Using locum tenens rates to determine or support call pay for local “in market” physicians
- Relying on the 75th percentile survey data as a “safe harbor” without 75th percentile burden
For more on the limitations of survey data, review these common fair market value myths.
Consistently Evaluate Call Program Effectiveness
Call compensation shouldn’t be “set it and forget it.” Community need, physician supply, service line volumes, payor mix, APP utilization and telehealth may be a few factors that change over time. Changes to compensation structure and rate, whether during an existing agreement term or at renewal, should be made with legal counsel’s guidance to meet regulatory requirements.
A consistent process for reviewing provider compensation arrangements can help hospitals organize periodic reviews and document changes.
LBMC’s Healthcare Valuation team works with hospitals, health systems and other healthcare organizations to evaluate physician call coverage compensation and the factors that influence fair market value. If your coverage model is new, has changed, or it’s been a while since your last review, it may be worth another look.
Content provided by Josh Brummett, Shareholder, and Jessica Webster, Senior Manager, in LBMC’s Healthcare Valuation division.
