OIG approves hospital plan to pay for emergency call

A hospital's proposal to pay physicians for on-call emergency coverage does not run afoul of federal anti-kickback statutes, according to a recent advisory opinion by the Dept. of Health and Human Services Office of Inspector General.

The letter offers some key guidance on what the government views as an acceptable plan to address on-call shortages, experts said. But they warn it does not present a one-size-fits-all solution.

In the May 21 opinion, OIG acknowledged that hospitals increasingly are compensating physicians for emergency coverage. "We are mindful that legitimate reasons exist for such arrangements in many circumstances," including a scarcity of available doctors in particular areas and compliance with the federal Emergency Medical Treatment and Active Labor Act.

Nevertheless, on-call payment still carries considerable legal risks, OIG Chief Counsel Lewis Morris noted. "Physicians may demand such compensation as a condition of doing business at a hospital," Morris wrote. The payments also "could be misused to entice physicians" to join or remain on the medical staff or to generate illegal referrals.

Overall, the letter offers good news for physicians, said Daniel F. Gottlieb, a partner and health care regulatory expert at McDermott Will & Emery's Chicago office. "This OIG is recognizing that, under certain circumstances, it is appropriate to pay [doctors] for their on-call services and that there are legitimate reasons for physicians to want to be paid for their on-call services."

Safeguards considered

In approving an unnamed hospital's compensation proposal, the OIG advisory highlighted a number of safeguards that it believed minimized the risk of fraud and abuse.

First, the agency noted the hospital's payments to doctors reflected fair-market value for the actual services they provided and were tied to tangible physician responsibilities, rather than to referrals. Fees were uniform for all physician specialties, and doctors were expected to provide follow-up care when needed. On-call payments applied only to uninsured patients -- a limitation OIG said reduced the risk of doctors eliciting illegal referrals or being paid twice for the same service.

Second, the opinion highlighted the hospital's difficulties in maintaining an adequate panel of on-call specialists because of the disruptive nature of such duties. The additional medical liability risks associated with rendering care to patients with whom doctors have no prior relationship was another factor.

Lastly, OIG officials said the proposed arrangement and its requirements were offered and applied equitably to all physicians. That not only promoted transparency and accountability, but also facilitated more consistent emergency care at the hospital -- the sole provider of acute, inpatient care in its county.

Cautionary notes

Despite OIG's stamp of approval, however, "this is not a total green light for any on-call compensation program," said San Diego fraud and abuse lawyer R. Michael Scarano Jr. "At the end of the day, the primary issue is, did the hospital have a legitimate, bona fide need to pay for this."

For example, emergency departments with a sufficient supply of specialists or a diverse payer mix may have a harder time justifying on-call payment, said Scarano, vice chair of Foley & Lardner LLP's Health Care Industry Team. The advisory opinion "suggests that 'need' can be more compelling with a high volume of uninsured patients because physicians may be more reluctant to come in."

OIG also requires payments to reflect fair-market value, but it does not define what that is, he said. In this case, the hospital took into account a variety of factors, including a range of fees across public, private and self-payers, average lengths of stay, and physicians' likely time commitment to a particular service.

The hospital's fees did not factor in doctors' lost income for time away from their practices, Scarano stressed. "The OIG does not like that kind of justification for payment."

Gottlieb also noted the pay was tied to specific, identifiable services and responsibilities, such as responding to a request within 30 minutes, in-person emergency consultations, or surgical or endoscopy procedures. But the advisory opinion was less clear about compensating physicians based on their availability, he said.

"That's a challenge, because most physicians and hospitals feel there is value in physicians agreeing to be available -- versus being physically present and providing services -- because there's a whole range of emergent and urgent situations that could come on a daily basis," he said.

Whether doctors are requesting or being offered pay for on-call services, Gottlieb recommended they make sure the payments are carefully appraised and appropriately tied to their level of responsibility.