Determining physician call compensation is never an easy task for a hospital executive team. On-call coverage payments for emergency departments and trauma programs have increased in the past five to seven years, and this trend is forcing hospitals to look at different strategies to ensure that there are physicians on-call while also trying to control the high call compensation levels.
"Many hospital organizations struggle to determine a fair market value rate for call because they look at their market and find such a wide range of what other organizations are paying," says Mary Heymans, RN, MHA, senior vice president of physician services at healthcare consulting firm Integrated Healthcare Strategies. "Organizations will commonly refer to the media daily rates reported in the survey sources and assume, 'This must be appropriate for my organization,' which may or may not be the case."
Here are 11 factors that can help hospitals establish fair market value for their physician call compensation plans.
1. Type of call. There are two types of physician call coverage arrangements: restricted and unrestricted. Most call coverage is unrestricted, which means physicians carry a pager and respond to inquiries within the time period defined by the medical staff (e.g., 20 minutes) or trauma requirements. Restricted call coverage requires physicians to be at — and, if necessary, sleep at — the hospital while they are on-call. "Unrestricted rates are typically lower than restricted rates because physicians are precluded from going home [in restricted plans] because they can't get back to the hospital quickly enough to meet the response times and coverage requirements," Ms. Heymans says.
For example, she says the average rate for restricted trauma surgery call coverage is between $2,000 and $2,500 per physician per 24-hour day, and that figures drops to $1,000 to $1,500 per physician per day for unrestricted call coverage.
2. Payor mix. In markets where hospitals have a lucrative payor mix, Ms. Heymans says a physician might be happy to be on call because it's a way to obtain new patients. However, other hospitals — such as urban and inner-city organizations — may have a high volume of indigent patients or a large unassigned patient load with less-than-desirable reimbursements. In those instances, Ms. Heymans has seen hospitals pay physicians higher call rates, up to the 90th percentile of the market, due to the inconvenience for physicians and poor payor mix.
3. Frequency of call. How many times a physician is paged and whether he or she can respond by phone as well as in person affect the call payment rate, Ms. Heyman says. An expectation of a large amount of "call-ins" will naturally lead to higher compensation.
4. Likelihood of conducting inpatient consults. Some call compensation agreements will include stipulations for additional payments or higher call rates if physicians have to conduct inpatient consultative services for unassigned patients.
5. Average case acuity. Some physicians, such as neurosurgeons, might be called in and expected to complete lengthy surgeries or consults. If physicians treat higher acuity cases and therefore are required to come in and conduct emergency surgeries, the call coverage pay will reflect this appropriately, Ms. Heymans says.
6. Tertiary care status. Physicians at tertiary care facilities usually see a higher volume of complex patients than physicians would see in community or rural hospital markets, Ms. Heymans says. As such, call compensation at tertiary care facilities tends to be higher than their rural counterparts.
7. Coverage limitations. The less physicians a hospital has access to for call coverage, the more those physicians will be paid due to scarcity. Coverage limitation is an example of a "supply versus demand" quality of a call compensation plan. "If I'm the only physician in a community, it is likely a hospital will be providing a payment for this excess call coverage," Ms. Heymans says. "To be on call 365 days a year is a burden."
8. Trauma center status. Hospitals designated as trauma centers are required to have on-call physicians for a full array of specialists, and consequently, they often pay a higher rate than non-trauma centers. Ms. Heymans says trauma hospitals will generally pay 15 to 25 percent more than non-trauma hospitals. This amount ranges by specialty and is not higher for all specialties.
Additionally, call pay can vary among different levels of trauma hospitals. The highest designated Level I trauma centers usually have higher call compensation rates, but Level II centers' rates are not always lower, especially in markets without a Level I center nearby, Ms. Heymans says.
9. Follow-up care requirements on indigent patients. Ms. Heymans says that some call compensation agreements will pay physicians a separate charity care payment in addition to the call coverage payment because physicians will need to conduct follow-up care, which is not normally covered. "It's work they're doing in addition to the work in their office that they're not getting reimbursed for," she adds.
10. Private physician versus employed physician. Hospitals are acquiring physician groups and employing physicians at an accelerating rate, and the physician's employment status makes a big difference in the call pay. Private physicians usually demand more call pay due to their independence and inconvenience to their private practice, but employed physicians commonly have minimum call requirements built into their compensation. "Many physicians are being employed with expectations that as part of their salary, they'll be expected to provide a certain number of call days without additional compensation," Ms. Heymans says. "That's one reason why hospitals are employing physicians — they secure the call coverage they need for their patients."
11. Physician's ability to bill for services provided. Physicians who are not able to bill and collect for their professional service provided during the call period will typically request higher daily call rates or some other form of payment to recognize their on-site time providing services.
"Many hospital organizations struggle to determine a fair market value rate for call because they look at their market and find such a wide range of what other organizations are paying," says Mary Heymans, RN, MHA, senior vice president of physician services at healthcare consulting firm Integrated Healthcare Strategies. "Organizations will commonly refer to the media daily rates reported in the survey sources and assume, 'This must be appropriate for my organization,' which may or may not be the case."
Here are 11 factors that can help hospitals establish fair market value for their physician call compensation plans.
1. Type of call. There are two types of physician call coverage arrangements: restricted and unrestricted. Most call coverage is unrestricted, which means physicians carry a pager and respond to inquiries within the time period defined by the medical staff (e.g., 20 minutes) or trauma requirements. Restricted call coverage requires physicians to be at — and, if necessary, sleep at — the hospital while they are on-call. "Unrestricted rates are typically lower than restricted rates because physicians are precluded from going home [in restricted plans] because they can't get back to the hospital quickly enough to meet the response times and coverage requirements," Ms. Heymans says.
For example, she says the average rate for restricted trauma surgery call coverage is between $2,000 and $2,500 per physician per 24-hour day, and that figures drops to $1,000 to $1,500 per physician per day for unrestricted call coverage.
2. Payor mix. In markets where hospitals have a lucrative payor mix, Ms. Heymans says a physician might be happy to be on call because it's a way to obtain new patients. However, other hospitals — such as urban and inner-city organizations — may have a high volume of indigent patients or a large unassigned patient load with less-than-desirable reimbursements. In those instances, Ms. Heymans has seen hospitals pay physicians higher call rates, up to the 90th percentile of the market, due to the inconvenience for physicians and poor payor mix.
3. Frequency of call. How many times a physician is paged and whether he or she can respond by phone as well as in person affect the call payment rate, Ms. Heyman says. An expectation of a large amount of "call-ins" will naturally lead to higher compensation.
4. Likelihood of conducting inpatient consults. Some call compensation agreements will include stipulations for additional payments or higher call rates if physicians have to conduct inpatient consultative services for unassigned patients.
5. Average case acuity. Some physicians, such as neurosurgeons, might be called in and expected to complete lengthy surgeries or consults. If physicians treat higher acuity cases and therefore are required to come in and conduct emergency surgeries, the call coverage pay will reflect this appropriately, Ms. Heymans says.
6. Tertiary care status. Physicians at tertiary care facilities usually see a higher volume of complex patients than physicians would see in community or rural hospital markets, Ms. Heymans says. As such, call compensation at tertiary care facilities tends to be higher than their rural counterparts.
7. Coverage limitations. The less physicians a hospital has access to for call coverage, the more those physicians will be paid due to scarcity. Coverage limitation is an example of a "supply versus demand" quality of a call compensation plan. "If I'm the only physician in a community, it is likely a hospital will be providing a payment for this excess call coverage," Ms. Heymans says. "To be on call 365 days a year is a burden."
8. Trauma center status. Hospitals designated as trauma centers are required to have on-call physicians for a full array of specialists, and consequently, they often pay a higher rate than non-trauma centers. Ms. Heymans says trauma hospitals will generally pay 15 to 25 percent more than non-trauma hospitals. This amount ranges by specialty and is not higher for all specialties.
Additionally, call pay can vary among different levels of trauma hospitals. The highest designated Level I trauma centers usually have higher call compensation rates, but Level II centers' rates are not always lower, especially in markets without a Level I center nearby, Ms. Heymans says.
9. Follow-up care requirements on indigent patients. Ms. Heymans says that some call compensation agreements will pay physicians a separate charity care payment in addition to the call coverage payment because physicians will need to conduct follow-up care, which is not normally covered. "It's work they're doing in addition to the work in their office that they're not getting reimbursed for," she adds.
10. Private physician versus employed physician. Hospitals are acquiring physician groups and employing physicians at an accelerating rate, and the physician's employment status makes a big difference in the call pay. Private physicians usually demand more call pay due to their independence and inconvenience to their private practice, but employed physicians commonly have minimum call requirements built into their compensation. "Many physicians are being employed with expectations that as part of their salary, they'll be expected to provide a certain number of call days without additional compensation," Ms. Heymans says. "That's one reason why hospitals are employing physicians — they secure the call coverage they need for their patients."
11. Physician's ability to bill for services provided. Physicians who are not able to bill and collect for their professional service provided during the call period will typically request higher daily call rates or some other form of payment to recognize their on-site time providing services.
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