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EMTALA Implications In The Air With On-Call Ruling

In the first advisory opinion on the issue of paying for on-call, the Office of Inspector General has agreed not to prosecute a hospital that is paying for on-call services.

Published Oct 2, 2007



OIG Allows Hospital To Pay For Call

In the first advisory opinion on the issue of paying for on-call, the Office of Inspector General has agreed not to prosecute a hospital that is paying for on-call services. The opinion, however, does not approve all on-call plans, and specifically sets up a number of check points under which many hospital plans would be potentially vulnerable for criminal charges. The jurisdiction of the OIG also falls short of ruling on whether physicians can band together to negotiate call fees -- a practice banned by anti-trust laws rather than Medicare rules.

For the full text of the OIG opinion go to http://www.medlaw.com/oig-07-10.pdf

The opinion does not require hospitals to pay for call, and warns that common call payment systems have a significant risk of being in violation. They also warn that physicians who demand call compensation as a condition of remaining or staff or not moving patients would put any compensation plan at risk.

The opinion relies heavily on the details provided by the hospital to support its request for advisory opinion, and makes it clear that each one is critical to the favorable ruling.

Details:

Among the elements in the case were:

1. History of gaps in call coverage due to physician refusal to take call

2. Plan was developed by committee of Board, medical staff, and administration

3. Physicians agree to:

  • Participate in call rotation on as even basis as feasible -- each must provide 1.5 days per month of uncompensated call
  • Provide inpatient care and consultation for patients seen in the ED while on call
  • Respond in timely manner
  • Cooperate with risk management and quality initiatives of the hospital
  • Complete their medical records in timely manner
  • The program is open to all staff
  • The rates of compensation were set using an outside consultant to prove fair market value was not exceeded
  • The agreement was in the form of a two year contract
  • Rates varied on severity, probability of being called in, probability of having to render in-house care, rate of uninsured patients, and whether the call period was a weekday or weekend and do not vary based on physician billing, admitting, or referral rates.
  • The hospital absorbed the cost of the program without charge (expense report) to federal or state programs

[Comment: It does not appear that the conditions are materially different from the physicians' existing duties under EMTALA and a question exists whether the OIG ignored that fact in trying to find compensible activity to support the plan.]

4. The hospital has substantive monitoring of quality and compliance criteria in place, and physicians who violate the terms are suspended

Legal analysis by the OIG:

In its legal analysis, the OIG did not examine the existing requirements of EMTALA and looked only at the anti-kickback statute, as the OIG does not have official authority for advisory opinions on EMTALA.

In looking at the "Safe Harbor" provisions, the OIG commented on the standards for "personal service and managmeent contracts" provisions, which provides protection if an arrangement can meet all of the safe harbor requirements:

1. Agreement is in writing and signed by the parties

2. The agreement covers the specifics of all services to be rendered

3. If the services are to be performed on a sporadic or part-time basis (such as on-call), the agreement details the schedule, length, and charge for the performance intervals

4. The agreement is for no less than one year

5. The total compensation is set in advance and is consistent with fair market value without any reliance on the volume or income from patient referrals generated for patients in federal programs

6. The amount of services do not exceed the commercially reasonable needs of the business purpose

Because the total compensation amount is not able to be determined at the beginning of the contract, the agreement being considered did not qualify for the "Safe Harbor" according to the OIG

RISKY ARRANGEMENTS:

The OIG's opinion warned that there is a substantial risk that improperly structured payments for on-call coverage could be considered unlawful remuneration, and that "covert kickbacks" might occur where the payments exceed fair market value or for services not actually provided. Examples cited by the OIG of potentially illegal plans included:

a. payment for "lost opportunity" that do not reflect bona fide lost income ( comment: i.e. speculative or inflated);

b. payment structures that compensate physicians when no identifiable services are provided (comment: i.e. flat per diem compensation structures unrelated to actual response)

c. On-call payments that are disproportionally high compared to practice income

d. Payment structures that compensate the on-call physician for services for which the physician is separately billing insurance or patients creating double payment. (comment: this seems to suggest that the current hospital plan did NOT allow the on-call physician to bill, but that is not specifically stated anywhere in the opinion.)

The OIG also stated that each case would remain subject to an individual review, and the current opinion could not be relied upon by any other hospital. Basically, every hospital must consider whether they wish to submit for their own advisory opinion, or whether they wish to operate off the OIG radar and take legal guidance on how to do that. They also pointed out that the OIG is accepting the hospital's representations that the details are as stated and that the values of payments do not exceed fair market value. If anything is found in reality to be different, the opinion letter is void.

SO WHERE DOES THAT LEAVE ON-CALL REIMBURSEMENT?

As always, form and substance both matter in structuring call deals. In finding this particular structure is not subject to prosecution, the OIG has not created a blanket endorsement for or even permission for generalized paid-on-call systems for the country. Every case will have to be analysed and the burden will rest on the hospital to justify the structure.

In my opinion, we are still at a point where most of the demands for on-call payment have been worked up under circumstances that raise serious questions about anti-kickback and anti-trust violations. The vast majority of paid-on-call systems lack the detail, structure, and enforcement processes found in this case, and would fail on review.

This opinion, however, does seem to support the contracted call approach that several companies have advocated and shepherded into being. They are structured more like a third-party service contract than a stipend to medical staff members. Interestingly, these contract service models are about the only on-call structures claiming to have improved participation, response, and patient satisfaction. The standard medical staff stipend approach definitely is not getting a reputation for any improvement in call response across the country.

One obvious question about any of these per diem or stipend approaches is how many hospitals can pay for call on this basis and NOT put the expense on its Medicare Cost Report or use federally sourced state medicaid or grant money. That alone leaves this case as a limited application model for hospitals with major financial reserves that it can draw down on.

The model that was not alluded to in the OIG discussion of paid call is the per response compensation plan, and the comments do not make it clear how that model would be viewed. It does seem that it has less risk than the model in the opinion or stipend models.

In The Predictable Future:

My conclusion at the moment is that the safest model, however, from a compliance point of view, budget point of view, and overall EMTALA compliance comments from CMS folks, remains the old standard of mandatory physician call. That is where a majority of US hospitals will remain.



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