Association of Washington Public
Hospital Districts
Emergency Department Call Coverage Solutions:
One Size Doesn’t Fit All
April 30, 2008
Discussion Topics
The purpose of this presentation is to summarize the various
trends, both economic and regulatory, that are shaping
emergency department (ED) call coverage solutions.
Key topics to be addressed are listed below.




National and Regional Trends – What are the national and regional
trends in physician call coverage arrangements?
Regulatory Update – What are government agencies or regulators
saying about call coverage plans and related payments?
Call Coverage Solutions – What are common (and not so common)
methods of addressing physician requests to be paid for call?
Case Studies – How are specific hospitals and their medical staffs
addressing their particular situations?
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National and Regional Trends
Overview
The past year has seen continued evolution and
increased prevalence of ED call coverage plans.
Key trends over the last year include:




Increased Responses – While hospitals have been aware of the issue
for some time, more organizations are adopting solutions (formal and
informal).
Operational “Fixes” – Hospitals are dedicating more effort and resources
toward operational fixes aimed at decreasing the burden of call coverage.
Guaranteed Reimbursement – Hospitals are increasingly considering
(or implementing) guaranteed payment for uninsured (and often
underinsured) patients.
Focus on Surgical Specialists – If hospitals pay daily stipends,
surgical/procedural specialties receive the majority of payments, while
primary care physicians are typically excluded.
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National and Regional Trends
News Headlines
Recent press coverage indicates that physician pressure for payments
continues, and it is likely to be a major issue for the foreseeable future.
Study: Hospital ERs Strained by Lack of On-Call Specialists
2007
The Daily Court Reporter
ERs Scramble to Find On-Call Specialists
The Boston Globe
December 23, 2007
April 15, 2007
New Lure for Specialists to Answer the Call – Money
Puget Sound Business Journal
January 11, 2008
On-Call Specialists at Emergency Rooms Harder to Find, Keep
The Washington Post
December 21, 2007
Physicians’ On-Call System May Have to Go Through Changes or Die
Columbus Business First
July 16, 2006
Rising Fees for On-Call Specialists Have Hospitals Seeing Red
Silicon Valley/San Jose Business Journal
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October 21, 2006
National and Regional Trends
News Headlines (continued)
LRMC Pays On-Call Surgeon $700,000
The Ledger
September 30, 2007
Get Me a Neurosurgeon, Stat!
U.S. News & World Report
January 21, 2007
In Shift, Doctors “On-Call” Get Pay; Hospitals Break With ER Tradition
The Boston Globe
April 15, 2007
Private Urologists to Be Paid for On-Call Treatment of the Poor
The Washington Post
February 12, 2007
Plan to Solve Emergency Room Crisis Reaches Impasse
Sun-Sentinel
February 6, 2008
If You Land in the Emergency Room, Don’t Count on Seeing a Specialist
Sun-Sentinel
July 16, 2006
Hospital Groups Make ER Palatable; Doctors Have Long Balked at On-Call System
`
Portland Business Journal
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July 21, 2006
National and Regional Trends
Payment Trends
In the past year, hospital expenditures for call coverage have increased,
mostly due to local market pressures, call burden, and physician availability.



1
According to Sullivan, Cotter and Associates, Inc., roughly 60% of hospitals reported that their on-call
expenditures increased in 2007.1
Some of the key factors impacting daily stipend rates for call coverage include:1
»
Local market rates.
»
Frequency of call.
»
Likelihood of being called in when on call.
»
National market rates.
Close to 15% of hospitals have closed one or more services in the past year due to the lack of
physicians available to provide call coverage, including:1
»
Neurosurgery.
»
Plastic surgery.
»
Oral/maxillofacial surgery.
»
Orthopedic surgery.
»
Neurology.
»
Ophthalmology.
Source: Sullivan, Cotter and Associates, Inc.’s 2007 Physician On-Call Pay Survey Report (national data).
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National and Regional Trends
Payment Trends (continued)
Physicians will continue to pressure hospitals for compensation to take
call. A recent survey found that 81% of hospitals have implemented, or are
considering implementing, plans and policies for physician on-call pay.1
Sullivan Cotter
Survey Median
(Daily Payment)2
ECG
Survey Median
(Daily Payment)3
General Surgery
$750
$1,000
Orthopedic Surgery
$968
$1,000
$1,175
$900
Other Surgical Subspecialties4
$478
$379
Medical Subspecialties5
$593
$400
Physician Type
Neurosurgery
NOTE: Payment statistics are based only on hospitals that are paying for ED call.
2
Source: Sullivan Cotter’s 2007 Physician On-Call Pay Survey Report (national data).
Represents unrestricted call coverage, which means that physicians are not required to remain on hospital premises.
Source: Sullivan Cotter’s 2007 Physician On-Call Pay Survey Report (national data).
3
National data collected from April 2005 through December 2007.
4
Includes cardiothoracic surgery, OB/GYN, ophthalmology, oral/maxillofacial surgery, orthopedic surgery – hand, otolaryngology
(ENT), plastic surgery, trauma surgery, urology, and vascular surgery.
5
Includes cardiology, gastroenterology, internal medicine, and neurology.
1
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National and Regional Trends
Budget Benchmarks
A study of 45 hospitals paying for call coverage indicates that annual budget
for stipend payments ranges from 20 to 70 basis points of net revenue.
Stipend Payments as a Percentage of Net Revenue1,2
0.80%
0.70%
0.60%
0.50%
0.40%
0.30%
0.20%
0.10%
0.00%
25th Percentile
50th Percentile
75th Percentile
1
Data based on ECG Management Consultants, Inc.’s proprietary call coverage database. Includes data from 45 hospitals across
the country.
2
Net revenue data from American Hospital Directory, Inc.
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Regulatory Update
Overview of OIG Opinion
In September, the OIG posted an advisory opinion1 on ED call
coverage in response to a request from a large hospital regarding
the appropriateness of its call coverage payment system.

The hospital is a not-for-profit Catholic facility with a charitable mission.

The facility has a high underinsured and uninsured patient population treated in the
ED.

Due to the financial burdens of uncompensated patient care and malpractice
insurance costs, many physicians became unwilling to provide ED call without
compensation.


The lack of physician availability constrained the hospital’s ability to meet its specialty
coverage needs.
In response, an ad hoc committee was formed that developed a call coverage and
uncompensated care arrangement to reduce physician burden while enabling the
facility to provide the community with needed medical care.
The OIG ruled that while the arrangement might “generate prohibited
remuneration under the Anti-Kickback Statute,” the OIG would not
impose administrative sanctions on the hospital for its system.
1
HHS OIG, Advisory Opinion No. 07-10, posted on September 27, 2007.
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Regulatory Update
OIG Opinion – Payment System
The featured hospital chose a tiered per diem payment structure,
based on specialty burden, for its call compensation system.
High Per
Diem
Payment
Tier Level
Key Characteristics
Level 1 – Primary Surgical

Receive calls more frequently.
General Surgery, Neurosurgery, Orthopedics

Are likely to treat high-acuity patients.
Level 2 – Secondary Surgical

Receive calls less frequently.

Must be prepared to perform surgery if
called.

Are less likely to be called.

Call is more likely to be for consults.
Level 4 – Hospital-Based Specialties

Perform guaranteed level of service.
Hospital Medicine, Anesthesiology

Treat unassigned patients.
Oral/Maxillofacial, Ophthalmology, ENT, Urology,
OB/GYN
Level 3 – Medical Subspecialties
Infectious Disease, Cardiology, Neurology,
Renal/Nephrology, Pulmonology, Endocrinology,
Hematology/Oncology, Gastroenterology
Low Per
Diem
Payment
The payment system provides systematically larger payments
for physicians taking weekend call, relative to weekday call.
Further, all physicians are obligated to provide 1.5 days per
month of uncompensated call coverage.
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Regulatory Update
OIG Opinion – Major Implications
In commenting on the payment arrangement described, the OIG provides a great
deal of guidance for other hospitals and their call coverage arrangements.
Issue
Fair Market Value
(FMV) Compensation
Implications for Hospitals
The opinion did not address payment amounts but implied that the following elements of
the program helped its case:

The payment amounts resulted from a balanced process that utilized (1) an ad hoc
committee of stakeholders to study the program and (2) payments that are indexed
to physician call burden and the likelihood that physicians will be required to respond
to ED calls.

An outside expert opinion was obtained to certify that the payments represent FMV.
Preference for Per
Diem Payments
Payments should be properly structured to avoid the appearance of unlawful
remuneration. In general, the OIG implies that it prefers per diem payments for call over
other methods.
Potential for Kickbacks
Compensation structures that might disguise kickback payments include:
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Payment structures that compensate physicians when no identifiable services are
provided.

Aggregate on-call payments that are disproportionately high compared to the
physician’s regular medical practice income.

Payment structures that compensate the on-call physician for professional services for
which he/she receives separate reimbursement from insurers or patients, resulting in
“double pay.”
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Regulatory Update
OIG Opinion – Major Implications (continued)
Issue
Implications for Hospitals
Indigent Care
The OIG clearly views the hospital’s requirements that physicians
provide care to indigent patients and administer all inpatient followup care as providing “substantial, quantifiable services” because
that puts physicians “at risk for having to furnish additional services
for no additional payment.”
Unmet Need
Facilities should have a legitimate, unmet need for providing on-call
coverage and uncompensated care. Unmet need should be
documented to historically show problems in physicians’
unwillingness to take call and, consequently, the hospital’s inability
to care for its patients.
Openness to All
Physicians
The hospital’s inclusion of all physicians in the program was also an
element that was viewed favorably by the OIG, as it reduces the
likelihood that the payments are being channeled to the hospital’s
biggest referrers.
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Regulatory Update
OIG Opinion – Major Implications (continued)
Issue
Implications for Hospitals
Uniform
Administration
The payment should be administered uniformly for all doctors in a
given specialty to lower the risk of the arrangement becoming a
vehicle to disguise payments for referrals.
Equal Distribution of
Responsibilities
The arrangement should be offered uniformly to all physicians in the
relevant specialties. Call obligations should be divided as equally as
possible to avoid the appearance of the schedule being used to
selectively reward the highest referrers.
Documentation of
Program Outcomes
Hospitals should require quality outcomes from their physicians on
call and document the results as a way of measuring the success of
call coverage arrangements.
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Call Coverage Solutions
Payment Trends
Organizational Cost
The cost (and stability) of call coverage plans increases as more formal
arrangements between hospitals and medical staffs are established.
Increasing Call Plan Stability
No
Pay
Operational Reimbursement
Support
Guarantees
Activation
Payments
Stipend
Payments
Call Strategies
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Affiliation
Agreements
Employment
Call Coverage Solutions
Impact on Rural Hospitals
Smaller hospitals, particularly rural hospitals, face considerable challenges
in maintaining 24/7 coverage with a limited number of providers.


Transfer Plan – Hospitals are increasingly using formal transfer plans
to backfill uncovered days.
Telemedicine – Physicians may use telemedicine services in certain
situations to further evaluate or stabilize an emergency medical condition.
» Specific rules exist regarding appropriate use of telemedicine without
being in violation of EMTALA on-call requirements.
» Reimbursement for telemedicine services is limited.


Community/Regional Coverage – Some areas have successfully
coordinated regional call coverage plans within specific specialties
(e.g., all hand cases are referred to Hospital A).
Payment Thresholds – Some hospitals are paying physicians for
coverage after they have covered a certain number of “obligatory” days.
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Call Coverage Solutions
Medical Staff Involvement
Involving your medical staff in the call coverage planning process
can take different forms: an incremental (specialty-by-specialty)
approach or a collaborative medical staff-wide approach.
Incrementalism
Medical Staff Involvement

Quicker resolution of issue.


Easier process to manage on the
front end.
Takes longer and requires more
effort to resolve call issues.

More likely to build sustainable
support for plan in long term.

Medical staff pressure can balance
extreme specialty demands.

Requires strong administrative and
physician leadership.

Tends to validate extreme opinions.

Can antagonize other specialties.

Can raise unrealistic expectations
for call pay.
Although an incremental approach to call planning can often
resolve short-term crises, involving the medical staff in the process
has a better chance of building a long-term, stable solution.
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Call Coverage Solutions
Planning Methodology
Component A – Strategic Direction
Situational Assessment
Component B – Preferred Call Coverage Solutions
Strategic Direction
Plan Development
Internal Analysis
Call Coverage Options
Background Assessment
Interviews
Call Coverage Burden Data
Option 1
Deliverable
Situational
Assessment
External Analysis
Market Analysis
National and Regional
Trend Assessment
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Deliverable
Develop
Strategic
Direction
Option 2
Deliverable
Option 3
Strategic
Principles
and Goals
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Evaluate
Strategic,
Financial,
and
Operational
Implications
Select
Preferred
Plan
Implementation
and
Communication
Plan
Case Studies
To better understand the issues behind call coverage, we have
outlined two different case studies from the West Coast.
Case Study #1

A three-hospital system on the West Coast developed a tight affiliation
with one neurosurgery group to address call coverage concerns.
Case Study #2

Hospital administrators deferred to the medical staff to develop a
budget-focused solution to the call coverage issue.
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Case Study
#1

Affiliation Arrangement
Background on Neurosurgery Issue
This case study involves a three-hospital system on the West Coast with
the following attributes:
Hospital
Trauma Level
Annual ED Visits
Avg. Daily Census
Hospital A
Level III
80,000
225
Hospital B
Level III
60,000
175
Hospital C
Level IV
25,000
85

The three hospitals are fairly integrated from a management/service line
perspective and share some physicians across medical staffs.

Call coverage concerns were first raised in 2005 by the loss of a large
neurosurgery group at Hospital A.
» The remaining surgeons initially asked for $2,000 per night to maintain
coverage for the hospitals.
» No specialties were receiving payment for call coverage.
» However, the level of dissatisfaction with call coverage, across all specialties,
was growing.
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Case Study
#1
Affiliation Arrangement
Addressing the Neurosurgery Issue
Issues and Key Steps Taken

Three neurosurgery groups in the community; all three groups stated they
did not want to take call anymore.

A group of eight physicians served Hospitals A and B.

Lost two physicians and chose to close practice at Hospital A.

Number of neurosurgeons at Hospital A dropped to eight, with only five
taking ED call.

Three of the five physicians did not use Hospital A as their primary hospital.

Neurosurgeons demanded pay or would drop privileges at Hospital A.

Short-term agreement reached to pay neurosurgeons $1,000 per day for
3 months.

Used the 3 months to develop strategic relationships with neurosurgery
groups in the community.
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Case Study
#1
Affiliation Arrangement
Addressing the Neurosurgery Issue (continued)
Long-Term Solution and Implications

Reestablished relationship with large neurosurgery group.

Developed 3-year professional services agreement to provide the following:
» Call coverage for three hospitals.
» Medical directorship for cranial program.
» Implant standardization – leadership and support.
» Quality and patient safety goals with incentives.
» Opening of satellite office in strategic area.
» Recruitment and growth of practice.

Results included:
» Stabilized neurosurgery program.
» Increased neurosurgery cases by 15% at Hospital A within 1 year; stable volumes at
Hospital B.
» Finalized the recruitment of two new physicians to the group.
» Implant committee generated over $250,000 in savings in first year.
» Upset other physicians, especially neurosurgeons in competing groups.
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Case Study
#2
Physician-Driven Plan
Background
A West Coast hospital was experiencing pressures from the medical
staff to provide payment for ED call; as such, administration established
a budget and left it to the medical staff to decide on distribution.

To address these concerns, hospital leadership engaged in a
comprehensive planning process in collaboration with the physicians and
with a set budget in mind.

After analyzing the situation, the steering committee determined that call
coverage compensation was appropriate for certain specialties.

Based on input from each of the stakeholder groups, the steering committee
concluded that payments should be based primarily on the amount of
uncompensated care provided and the burden of the call schedule.

Daily stipends were determined to be the most appropriate mechanism for
distributing payments.

Involving the physicians in the process helped secure their support once the
program was implemented.
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Case Study
#2
Physician-Driven Plan
Compensation
To recognize the financial burden – and in particular the
uncompensated care burden – related to call coverage services, the
medical staff steering committee recommended a tiered plan whereby
physicians in qualifying specialties receive a daily stipend.
Tier 1
(No Compensation)
Tier 2
(Moderate
Compensation)
Tier 3
(Maximum
Compensation)
$0
$200
$550
Stipend Amount
per Day
Specialty1

Adult Medicine

Maxillofacial Trauma

General Surgery2

Cardiology

Anesthesiology

Nephrology

Gynecology

Orthopedics

Cardiothoracic Surgery

Neurology

Hand Surgery

ENT

Neurosurgery

Pediatrics

GI

Obstetrics

Pulmonary

Group Health

Ophthalmology

Hematology,
Endocrinology,
Rheumatology,
Oncology (HERO)

Oral and Maxillofacial

Radiology

Trauma Surgery
Hospitalists

Urology

1
Specialty titles are based on call pool listings provided by the hospital.
2
Trauma surgery call is covered by a separate compensation mechanism. Physicians are not eligible for both stipends on the same day.
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Key Takeaways
Our experience suggests that there are several key
points to consider in addressing call coverage issues:

Get input from your medical staff, particularly from physicians expressing
the most discontent.

Involve the medical staff in the development of the solution(s).

Be diligent about physician communication during both planning and
implementation.

Look for operational fixes before pursuing monetary solutions.

Explore specialty-specific solutions, but plan carefully for reactions from
other specialties.

If you do choose to pay for call coverage, develop a budget and stick to it.

Include an annual review/update process as part of the solution.

Successful strategies must reduce call burden over the long term.
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Contact Information
Mr. Kevin P. Forster
ECG Management Consultants, Inc.
Telephone: 206-689-2200
kforster@ecgmc.com
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Ms. Lori K. Nomura
Foster Pepper PLLC
Telephone: 206-447-7895
nomul@Foster.com
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