On-call pay is the hospital’s payment for access to physicians providing call coverage. The provision of on-call pay to physicians continues to be a hot topic for hospital leaders and physicians. Therefore, it is important from a strategic, financial and regulatory perspective to properly structure physician on-call pay arrangements.
When developing and/or reviewing a physician on-call pay contract, there are several factors that must be taken into consideration. As with many things in life, the best way to assess something is to use the age-old Who, What, Where, When, Why and How technique.
Why is the agreement or the physician’s coverage needed? One example question to consider is — Does the hospital designation require physician coverage? An affirmative answer helps support moving forward with the arrangement.
Now that there is reasonable support to move forward, Who followed by What, Where, When and How come into question.
Who retains the professional billings generated while on-call? The answer to this question will lead to one of two paths:
1. Retention of professional fees by the physician opens the physician to the hospital’s payer mix risks and implies a higher rate of compensation for coverage.
2. Retention of professional fees by the hospital indicates that the physician will receive compensation for professional services from the hospital outside or separate of the coverage agreement in addition to on-call compensation.
Asking What, Where, When and How addresses the type and intensity of coverage provided. These questions help to determine the burden on the physician to better understand the value of being on call. Measuring actual burden for on-call pay arrangements can be challenging. Key questions include:
What type of coverage is required? Is the coverage restricted (the physician is required to remain on the hospital campus for coverage) or is it unrestricted?
Where is the physician providing coverage? A level one trauma center? A rural hospital located two hours away from the physician’s home? These questions help determine the expected frequency of on-call events and which events require the physician’s response via phone or at the hospital.
When is the physician on-call, nights, weekends, holidays, etc.? This is important in shaping value as being away from friends and family during big events such as holidays and weekends could place a bigger demand on the physician.
How often is the physician on-call? Every other day, one week per month? The greater the volume of call coverage shifts a physician must provide, the greater the disruption to the practitioner’s routine and thus the burden to the doctor — and disruption in their everyday life.
Each of these questions is important in assessing the value of the coverage provided and documenting the reasonableness of the arrangement.