Hospitals across the U.S. have had increasing difficulty assuring emergency on-call coverage by specialty physicians. High malpractice insurance costs, fear of lawsuits, and rising numbers of uninsured patients in emergency rooms have led to a shortage of specialty physicians providing emergency call coverage. One recent national study reported that 73 percent of emergency rooms struggle with inadequate call coverage by specialty physicians.
In Florida, the shortage has reportedly reached “crisis” levels in at least one county, where several patient deaths have been blamed on delays in locating appropriate specialist physicians who are on call to respond to emergencies. Against this backdrop, the obligation to provide emergency care in compliance with the federal Emergency Medical Treatment and Labor Act (EMTALA) and state statutory and regulatory requirements has increased hospitals willingness to pay specialists for emergency on-call coverage. At the request of one such hospital, the Office of the Inspector General (OIG) recently issued an Advisory Opinion regarding payments to physicians for emergency call coverage and uncompensated care services.
OIG Advisory Opinion No. 07-10 analyzes the risk of civil monetary penalties arising from one hospitals plan to pay per-diem compensation to physicians for emergency department call coverage and subsequent inpatient follow-up call care to uninsured patients. Significantly, the Advisory Opinion (AO) makes clear that the practice of paying physicians to provide on call coverage implicates the federal Anti-Kickback Statute (AKS) because of the potential that physicians may demand on-call compensation as a condition of practicing at and referring patients to the hospital. However, the AO states that this particular hospitals plan to compensate physicians will not result in the imposition of administrative sanctions under the AKS because the plan was carefully structured to contain safeguards against fraud and abuse, including assurances that all compensation to the physicians is fair market value for actual services rendered.
The AKS prohibits knowingly and willfully offering, paying, soliciting or receiving any remuneration to induce or reward referrals of items or services that are reimbursable by a federal health care program such as Medicare or Medicaid. The AKS has been interpreted to proscribe any arrangement where even one purpose is to induce referrals. Violations of the AKS are punishable as a felony against parties on both sides of a transaction, and may subject the parties to civil monetary penalties. To define permissible conduct within the framework of the AKS, the government has promulgated certain “safe harbors.” When all criteria of a safe harbor are met, the parties are assured that they will not be subject to prosecution or penalties under the AKS.
AO 07-10 addresses the safe harbor for personal services and management contracts. This safe harbor requires, among other criteria, that the aggregate amount of compensation to physicians be set in advance. The OIG concluded that the hospitals plan does not squarely fit within this safe harbor because the hospitals payments to physicians could vary from month to month, and as such, are not “set in advance.” Importantly, the AO underscores that the OIG will view as suspect: (1) on-call payments that are based on “lost opportunity” and do not reflect bona fide lost income; (2) payment structures that compensate physicians even when no identifiable services are provided; (3) payments that are disproportionately high compared to a physicians regular practice income; (4) payment structures that compensate physician even when there is separate reimbursement from insurers or patients, resulting in the physician being paid twice for the same service.
In this hospitals case, the AO concluded that the payments to physicians for on-call and uncompensated care services do not warrant sanctions under the AKS because:
The per-diem rate to physicians reflects the actual burden on the physician (e.g. what the physician has to do to be available in a short response time on a weekday v. weekend), as well as the actual likelihood that the physician will have to provide uncompensated treatment, and the likely extent of that treatment.
The hospital has a documented, legitimate and unmet need for the physicians services.
The arrangement includes strong safeguards against fraud and abuse:
The arrangement is offered uniformly to all physicians in the relevant specialties and not only to select physicians as a means of attracting or keeping them as a referral service.
Monthly call obligations are required to be divided as equally as possible, so as to discourage use of call scheduling to selectively reward the highest referrers.
All on-all physicians must provide follow-up care to any patient who is admitted, regardless of the patients ability to pay, lessening the risk that physicians could “cherry pick” those emergency patients that are likely to be most lucrative.
A requirement that on-call physicians document their services promotes accountability and creates a mechanism to monitor actual services provided.
Hospitals across the U.S. have had increasing difficulty assuring emergency on-call coverage by specialty physicians. High malpractice insurance costs, fear of lawsuits, and rising numbers of uninsured patients in emergency rooms have led to a shortage of specialty physicians providing emergency call coverage. One recent national study reported that 73 percent of emergency rooms struggle with inadequate call coverage by specialty physicians. 
