Healthcare providers increasingly are seeking creative alternatives to traditional methods of securing call coverage, which not only has become more expensive in an age of decreased reimbursement, but may no longer apply to all situations.
An offspring of telemedicine, telemedicine call coverage is emerging as a possible solution for many providers. But with new approaches like telemedicine call coverage comes the question of how to address physician compensation and value such arrangements so that they are compliant with federal law.
Telemedicine has opened up a new world for offering access to care in places where medical expertise can be scarce or difficult to locate. And, spurred by increasing healthcare costs, and the meta trend of consumerism in healthcare, the market for telemedicine is booming. In fact, a Mordor Intelligence report—Global Telemedicine Market—Growth, Trends, and Forecasts—projects 18.8% compound annual growth between 2017-2022 and expects the telemedicine market to be worth more than $66 million in the U.S. by the year 2021. Likewise, telemedicine call coverage arrangements are expected to increase, affording both busy physicians and financially strained providers a cost-effective, flexible, efficient option for addressing care needs.
One type of telemedicine call coverage, telephonic call coverage, requires a physician to respond and consult via telephone, but without the obligation to be present at the hospital. According to the Sullivan, Cotter and Associates, Inc. (SullivanCotter) 2014 Physician On-Call Pay Survey Report,1 30% of organizations (an increase from 22% reported in its 2013 survey) utilized physicians who practiced telephonic call coverage and were not required to be present at the hospital. The reduced pressure on such physicians potentially could mean lower compensation; however, according to SullivanCotter, 54% of organizations surveyed paid physicians providing telephonic call coverage 100% of the unrestricted daily stipend. Still, telemedicine services frequently are not reimbursable; as such, the total compensation paid to the physician will likely be lower than it would have been had the physician provided traditional emergency department call coverage services.
Further, more than two-thirds of organizations reported that their telemedicine call coverage arrangements were part of a formal, established telemedicine program. Of these, 42% planned to increase the scope of the telemedicine program in the next 12 months. An article by Modern Healthcare noted, "More private insurers are paying for telehealth services... and more than half of states have laws with rules addressing telehealth coverage."2 The increase in the number of telemedicine programs will likely lead to more frequent use of telemedicine call coverage services across the health system.
When compensating physicians for the time they spend providing telemedicine call coverage, health systems should prepare call coverage arrangements prudently to avoid potential complications implicating federal laws prohibiting physician self-referral (Stark Law) and kickbacks (Anti-Kickback Statute). As the trend of telemedicine continues, health systems and physicians alike should assist in ensuring compliance with respect to all applicable healthcare regulations.
Carol W. Carden, Principal - Healthcare Consulting, PYA
Carol Carden is a principal within the valuation service line at Pershing Yoakley & Associates, P.C. She provides business valuation and related consulting services to healthcare clients and a variety of business organizations. Her primary areas of expertise are in finance, valuation, managed care, and revenue cycle operations for healthcare organizations. She has performed numerous appraisals of businesses and securities for mergers, acquisitions, estate planning, and commercial litigation matters. She is a Certified Public Accountant, an Accredited Senior Appraiser, and a Certified Fraud Examiner.
Kathryn A. Culver, Manager - Healthcare Consulting, PYA
Kathryn Culver is a consulting manager within the valuation service line at Pershing Yoakley & Associates, P.C. performs fair market valuations for physician practice groups, hospitals, and health systems, and evaluates compensation agreements between health facilities and physicians. In addition, Kathryn is a Certified Public Accountant and has a strong foundation in accounting and finance. She has presented for several organizations on topics such as healthcare valuation, practice valuation, and physician compensation planning and has co-authored articles in various healthcare industry publications.
1 The 2014 SullivanCotter On-Call Survey is the tenth annual survey of physician on-call pay rates and practices published by the firm. The 2014 report is the most recently published and includes call data from 169 organizations such as trauma and non-trauma centers, critical access hospitals, regional referral centers, and medical groups providing on-call services.
2 Modern Healthcare, Virtual reality: More insurers are embracing telehealth, February 2016, http://www.modernhealthcare.com/article/20160220/magazine/302209980.
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