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HHS Office of Inspector General Issues Opinion Regarding On-Call Payments to Physicians

In recent years, issues have arisen as to whether hospitals could make payments to physicians for providing on-call coverage for the hospital’s emergency department as such payments might violate the anti-kickback statute.  Well, it seems the ambiguity surrounding this idea has recently been cleared up by the Department of Health and Human Services’ Office of Inspector General (OIG).

In October, the OIG published an advisory opinion addressing whether the anti-kickback statute may be triggered when a hospital pays a per diem fee to physicians for providing on-call hospital emergency department coverage.  The anti-kickback statute makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal healthcare program.  A hospital requested the opinion to bless its on-call per diem structure due in part to shortages in neurosurgery and neurology.

The OIG concluded that this particular arrangement presented a low risk of fraud and abuse and would not give rise to administrative sanctions due to a variety of factors outlined in the opinion, including:

  • The hospital certified that, based on an independent valuation, the per diem payment amounts are commercially reasonable, within the range of fair market value for actual and necessary services provided without regard to referrals or other business generated between the parties.  Additionally, the per diem rate paid to the on-call physicians is tailored to reflect the burden on the physicians and the likelihood that a physician in a particular surgery will actually be required to respond while on-call, as well as the likelihood that he or she will have to provide uncompensated care — in the ED, as an inpatient and any necessary follow-up care.
  • Second, the hospital allocates funds for call coverage for each participating specialty and calculates the per diem annually, in advance, based on a detailed methodology.  It uniformly administers the per diem payments for all participating physicians in a given specialty without regard individual referrals to, or other business generated for, the hospital.
  • The on-call physicians provide actual and necessary services, for which they are not otherwise compensated.  For example, participating physicians must respond within 30 minutes to a request from the hospital’s ED and, in some cases, must provide inpatient and follow-up care.
  • The hospital offers all the specialists on its staff who are required by its bylaws to take unrestricted call the opportunity to participate in the per diem payment arrangement.  Additionally, the method of scheduling on-call coverage is uniform within each specialty.  Thus it appears that the hospital employs an equitable policy that is not used to selectively reward the highest referrers.
  • Finally, the hospital absorbs all the costs and none accrue to Federal healthcare programs.

The OIG also noted “that nothing in this opinion should be construed to require a hospital or other facility to pay for on-call coverage.  To the contrary, on-call coverage compensation should be scrutinized closely to ensure that it is not a vehicle to disguise payments for referrals.”

While this opinion only applies to this specific arrangement, OIG advisory opinions are generally relied upon by the healthcare community to gauge the basic parameters for appropriate financial arrangements.  Thus, this opinion should serve as guidance for neurosurgeons and hospitals seeking to structure on-call compensation arrangements.

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