THE HOSPITAL RESPONSE

• The ostrich approach: Ignoring trends and continuing to rely on mandatory and voluntary systems tied to medical staff membership
• Reducing call frequency for on-call staff by relying on hospitalists, “nocturnalists,” “laborists,” house staff, residents and/or physician assistants and nurse practitioners
• Investing in technology to support coverage such as tele-radiology, electronic off-site monitoring and tele-health diagnosis
• Closing selected services or developing transfer arrangements for services where coverage is particularly difficult to sustain, like obstetrics and neurosurgery
Even together these approaches rarely address the full scope of a hospital’s coverage requirements. Systems that enforce medical staff membership obligations risk alienating physicians. The use of hospitalists, residents, etc. doesn’t address sub-specialty and surgical needs. Telemedicine is limited to certain specialties and situations.

THE ON-CALL COMPENSATION CHALLENGE

The remaining option is paying for coverage, on either a supplementary or more comprehensive basis. Hospitals are increasingly doing this, either through direct stipends or per-case subsidies based on physician productivity and payer mix formulas. DGA has consulted with hospitals about on-call compensation and payment practices for over three years. What we have seen has convinced us that it is critical for hospitals to have a well thought-out plan and clear policies for an effective on-call compensation program. Without a plan, policies and practices tend to be all over the place. Two similar emergency departments in a single market may be paying on-call physicians in one specialty, such as neurosurgery, nothing at all, or up to more than $2,000 per day. Payments within a hospital can vary just as dramatically, without any documentation/and or contracts supporting the variance (and providing support for compliance with fair market value guidelines). It also allows hospital management to place responsibility for on-call policy, on those who are most heavily affected by that policy.

DEVELOPING AN ON-CALL COMPENSATION PLAN

These are the key issues to be addressed in creating a well-considered plan for on-call compensation:
1. What specialties are needed for ED call, based on the hospital’s scope of clinical services and community needs? This includes those needed for both restricted (in-house) and unrestricted (beeper) call. At a minimum, hospitals need to meet the requirements of the JCAHO and State and federal regulatory agencies.
2. For each specialty, what are the principal factors in your market that are causing physician reluctance to take call? Consider the impact of high malpractice costs, a limited number of physicians for the call panel, reimbursement for emergency services, individual practice and lifestyle preferences and the supply/demand balance for specialists in a market. Understanding these factors helps in developing appropriate specialty-specific solutions.
3. Should some minimum level of voluntary call rotation be expected, with the hospital only compensating physicians for days that go beyond this minimum? Payment for call services by the hospital to the physicians must be counterbalanced by the physicians’ social contract with the hospital and obligation to the patient community.
4. Can any of the common alternatives for providing call services (e.g. hospitalists, physician extenders, telemedicine technology) be used to minimize the physician’s frequency of call? What specialties continue to need other approaches?
5. What criteria should be used for allocating funding available for physician call? Allocate on-call expenditures first to important specialties needed to provide 24/7 emergency or other special services, where physicians are truly burdened by their call requirements.
   
   DGA recommends developing a “tiered” payment system. For example, the highest payment would go to important surgical specialties with a limited number of physicians who respond frequently to call and remain involved for several hours. The next tier would be medical specialties with in-house support and less frequent call-in episodes. Specialties with adequate numbers of physicians and minimal call responsibility who are rarely consulted after hours would receive little or no compensation.
   
   Another important criterion for allocating resources is the level of reimbursement received by the physician for on-call work. Poorly reimbursed services like trauma or critical care may justify placement in a higher payment tier. Or reimbursement levels can be used in shaping a guaranteed payment system to compensate physicians who get little or no revenue from their on-call activity.
6. How can the hospital set payment levels that are fair and reasonable and adhere to the principles of fair market value? It is important to obtain an independent opinion on fair market value, tied to national standards, to avoid running afoul of federal compliance guidelines.
Hospitals may find it useful to involve physician leadership in shaping on-call payment policy. Involving physicians in defining tiers and/or allocations can improve medical staff buy-in. It also allows hospital management to focus responsibility for decisions regarding on-call policy, on the group most heavily affected by them.