Tis the Season: Paying Physicians Holiday Coverage Rates

Does your organization pay physicians above and beyond to take call over the holidays?

According to our database, some – but not very many – do.  Out of over 1,400 current call arrangements, only 4.4% have a holiday differential that pays physicians a different rate for for holidays than for other days of the week.   In fact, the per diem for a holiday averaged 43% more than the non-holiday per diem.

These contracts represent contracts with more than five times that many doctors since MD Ranger only counts one contract rate per facility per benchmark.

In terms of total annual payments, call contracts with a holiday per diem pay out a total of 10.6% more than contracts that do not include a holiday per diem.  In other words:  holiday per diems do have an impact on your overall physician contracting costs.  Adding a holiday pay component can sometimes be a good strategy for minimizing a contract increase rather than increasing payment every day of the year.

Need help with 2014 coverage contracts?  Email me at This email address is being protected from spambots. You need JavaScript enabled to view it. and tell me how we can assist you.

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Understanding Market Data: Consider Sample Size and Participant Characteristics

Market data can be a fast, reliable, and cost effective way for hospitals and health systems to benchmark their contract rates.  

To be effective, market data should be based on an adequate sample size.  OIG Stark guidelines suggest that market data should include a minimum of five providers.  Some surveys interpret five providers to mean five individual physicians; however, MD Ranger takes a more conservative approach that results in a more robust data set.  We only report benchmarks comprised of at least five different hospital owners/corporations, regardless of the number of facilities they own.  This results in benchmarks based on larger, more diverse, and more reliable datasets for setting physician contract rates.  Many of our benchmarks include dozens of hospitals that represent rates paid to hundreds of physicians.  Regardless of the data source you choose, a large sample size with diverse participants is key.

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Does Geographic Region Matter?

Do regions affect physician payment rates?  While many hospital executives answer with a resounding yes, consultants with nationwide practices often feel that variance by region is overplayed.

With the growth of its customer base, MD Ranger has considerable geographic diversity, with hospital contracts from 27 states covering dozens of MSAs, rural and urban areas. To investigate possible systematic variation, we pooled all MD Ranger’s contract data, over 10,000 records, and then joined it to data from various state and federal agencies, including CMS cost report data, BLS Occupational Employment Survey, various BLS price indices, etc. A multivariate approach modeled contract rates on hospital, contract, and market characteristics, and both linear and nonlinear techniques were employed. After extensive testing of a variety of geographic clusters defined by MSA’s and combinations of MSA’s, along with urban/rural distinctions, MD Ranger data scientists found no statistically significant geographic variation. More important factors influencing rates are trauma status, whether the hospital is urban or rural, and its size.

Want to read more?  Download our guide on geography here.


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Our Approach to Calculating Benchmarks and Market Data

Stark Law requires hospitals to pay doctors fair market value.  The appropriate fair market value can be determined by utilizing benchmarks calculated from robust market data.  We have found that many hospital executives who are charged with making sure these compensation rates are compliant don’t have information on how benchmarks are calculated and what the best benchmark for their situation could be.

Federal Antitrust Safety Zone guidelines require that market data collects from at least five different “providers”.  Many market data surveys interpret this as meaning five physicians.  MD Ranger interprets the Antitrust guidelines conservatively and takes this to mean five different health systems or corporations/owners.  This ensures a particularly large, robust data set that often includes scores of individual physicians.

The Antitrust guidelines also mandate that no more than 25% of the data in each statistic come from one provider.  MD Ranger again considers that no more than 25% of the data come from any one health system, as opposed to an individual physician.  If a given health system has more than 25% of the data, MD Ranger weights these data points to make up only 25% of the statistic.

Want to know more about how we collect our data?  Click here.

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