Call Coverage

Plastic Surgery Shows Largest Call Coverage Per Diem Growth

Previously, we examined which medical and surgical physician specialties are paid the largest per diem rates for call coverage contracts.  Today, we’ll look at MD Ranger’s 2017 Physician Contract Benchmarks and explore which call coverage agreements have had the largest dollar increases in their median call coverage rates since 2009.

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The specialties with the largest dollar increases are Plastic Surgery, Obstetric Anesthesia, Obstetrics / Gynecology, Urology, and Cardiothoracic Surgery. These highest growth specialties have all seen rates rise by at least $200 per diem.  These gains are non-trivial: the annualized rate of increase is more than $73,000 per year.

This list of services with the highest growth in per diem rates since 2009 varies somewhat from last year, when the specialties showing the largest total growth were Obstetric Anesthesia, Cardiovascular Surgery, Neurosurgery, Cardiothoracic Surgery, and Anesthesia.  In particular we can see that Plastic Surgery has surged to the top of the chart, showing $225 of growth in median per diem rates.

Interestingly, however, although these services have shown marked increases since 2009, we have relatively small overall growth of per diem rates, particularly in the most commonly paid services.

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Call Coverage Rates Remain High for Trauma Services

 In our last blog post, we investigated which medical and surgical specialties were most likely to be paid for call coverage contracts.  In this post, we’ll look at MD Ranger’s 2017 physician contracting benchmarks and examine which call coverage agreements had the highest per diem compensation rates.

 HighestPaidCallGraph2017

As the graph shows, the highest compensated call coverage specialties in 2017 are Trauma Neurosurgery, Trauma Surgery, Orthopedic Trauma Surgery, Neurosurgery, Obstetric Anesthesia, and Neuro-Interventional.  In fact, Trauma Neurosurgery, the largest individual call coverage per diem rate, is more than double those of the fourth place service (neurosurgery) and nearly three times those of the fifth place service (OB Anesthesia).

This list of top paid services varies a small amount from last year, when the highest paid call specialties were Critical/Intensive Care, Obstetric Anesthesia, Neurosurgery, General Hospitalists, Orthopedic Trauma Surgery, and Trauma Surgery.

One clear year over year trend shown by the data is that trauma services pull in far and away the highest per diems of all call coverage specialties.  These high per diem rates for trauma specialties should come as no surprise given the burden placed on call panels and the number of restrictions on physicians’ activities during call shifts.

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Using Market Data for Commercial Reasonableness in Call Coverage Agreements

MD Ranger published our new physician contracting benchmarks for 2017 in April, and since then we’ve analyzed the more than 28,000 contracts in our database to highlight the key takeaways from our release. In this post, we’re going to focus on looking at which specialties are most likely to be paid call coverage and how that information can be used to evaluate commercial reasonableness.

When figuring out if it is commercially reasonable to pay call coverage for a given service, it’s important to consider how frequently other, similar organizations are paying for the service. One slice of data that proves useful in this analysis is MD Ranger’s benchmark for the percent of subscribers who report paying call for specialties. For example, if you discover that only 2% of hospitals are paying for podiatry call coverage, you may need to rethink paying call for that service at your own organization or to document why the situation warrants the unusual arrangement, given the compliance risk.

Most Likely Paid Specialties for Call Coverage

As you can see, Orthopedic Surgery is the specialty most likely to be paid call coverage, and it has featured as a constant in the top 5 most paid specialties over the past several years. In fact, all of our most likely to be paid specialties, including General Surgery, Urology, Obstetrics/Gynecology, and Neurology, were in the most likely paid services in 2016 reports as well.

The stability of these services remaining in the top 5 year over year shows that hospitals are not being forced to significantly alter which services they are paying for call coverage. This stability allows compliance professionals to feel confident in evaluating new call coverage contracts for commercial reasonableness by using MD Ranger’s percent paying statistic.

 

Hospital Characteristics Impact Physician Compensation Rates

Since we published new benchmarks in April we’ve analyzed over 24,000 contracts in our database to uncover key insights. Though rates at the individual service level remain relatively stable year over year, overall physician costs paid by hospitals have skyrocketed in the last decade.

At the individual contract level, several factors consistently correlate with higher contract rates:

  • Trauma centers pay a 32% premium for call coverage contracts.
  • Larger hospitals, for every 100 bed increase in ADC, hospitals payments are 22% higher for call coverage and 15% higher for medical direction annual payments (hourly rates are no different).
  • Multi-campus arrangements, for both call coverage and medical direction, save money:
    • 33% less for call on a per campus basis
    • 18% less for direction on a per campus basis, with the difference related to higher hours not higher hourly rates
Physician Expenses per ADC by Beds

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Do My Peer Hospitals Pay for Call Coverage?

Stark Law not only requires that physicians be paid fair market value, but that the payment be commercially reasonable. Only 3% of our subscribers pay for podiatry call coverage. In the majority of cases, paying for podiatry call coverage would not be considered commercially reasonable. On the other hand, there are specialties where more than 40% of MD Ranger subscribers report paying for the service.

Most Likely to be Paid for Call Coverage Graph

If you have questions about whether a contract at your facility may not be commercially reasonable, feel free to email the team at This email address is being protected from spambots. You need JavaScript enabled to view it..

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Paying for Call Coverage Using Combination Payments

It is not uncommon for hospitals to experience a cascade effect once they start compensating for call coverage. However, it is generally not commercially reasonable to pay for all services. For example, 75% of hospitals report paying for general surgery while only 3% of hospitals report paying for podiatry call coverage. Just because a physician asks to be paid, does not mean it is commercially reasonable or necessary to pay. Navigating these negotiations can be difficult if the relationships are highly political or tenuous.

Despite the increasing pressure to pay for emergency coverage across multiple specialties, it is possible to find middle ground with physicians on this issue that addresses the physicians' need to be recognized for the time and service and the hospital's need for coverage. Here are some suggestions to consider for your organization.

Combination Payments
Another tactic to address costs can be to pay a lower per diem plus a per episode rate or uncompensated care rate as a second method. Hospitals should consider the overall estimated payments under the combination in order to assess the reasonableness of a combination of payment methods. MD Ranger reports the percent of facilities that have a second payment rate for call coverage services.

If you have any questions about what call coverage alternative might be best for your facility, email our team at This email address is being protected from spambots. You need JavaScript enabled to view it..

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Paying for Call Coverage with Per Episode Payments

It is not uncommon for hospitals to experience a cascade effect once they start compensating for call coverage. However, it is generally not commercially reasonable to pay for all services. For example, 75% of hospitals report paying for general surgery while only 3% of hospitals report paying for podiatry call coverage. Just because a physician asks to be paid, does not mean it is commercially reasonable or necessary to pay. Navigating these negotiations can be difficult if the relationships are highly political or tenuous.

Despite the increasing pressure to pay for emergency coverage across multiple specialties, it is possible to find middle ground with physicians on this issue that addresses the physicians' need to be recognized for the time and service and the hospital's need for coverage. Here are some suggestions to consider for your organization.

Per Episode Payments
In smaller facilities and for specialties for which physicians may not be called often, the burden of taking call is lower. In these situations, the hospital may incur lower costs by paying a 'per episode' rate when the physician is called in rather than a daily per diem rate. This payment type is most often used for services like obstetrics, but it may also make sense for low volume specialties like ENT or plastic surgery. MD Ranger collects and reports per episode payment rates for subscribers and reports benchmarks that can be used to document market rates.

Check back next week for another alternative payment method for call coverage. In the meantime, if you have any questions about what call coverage alternative might be best for your facility, email our team at This email address is being protected from spambots. You need JavaScript enabled to view it..

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Uncompensated Care Payments for Call Coverage

It is not uncommon for hospitals to experience a cascade effect once they start compensating for call coverage. However, it is generally not commercially reasonable to pay for all services. For example, 75% of hospitals report paying for general surgery while only 3% of hospitals report paying for podiatry call coverage. Just because a physician asks to be paid, does not mean it is commercially reasonable or necessary to pay. Navigating these negotiations can be difficult if the relationships are highly political or tenuous.

Despite the increasing pressure to pay for emergency coverage across multiple specialties, it is possible to find middle ground with physicians on this issue that addresses the physicians' need to be recognized for the time and service and the hospital's need for coverage. Here are some suggestions to consider for your organization.

Uncompensated Care Payments
Consider payment for uncompensated patients. Physicians are often concerned that the burden of carrying a beeper isn't worth the limited revenue associated with coverage. Emergency departments do have a disproportionate number of uninsured and Medicaid patients and in some areas, the burden is particularly high. At facilities where the payer mix is favorable, physicians are more likely to be paid for emergency patients. However, for hospitals where it is challenging to convince physicians to take call, paying for uncompensated care may be an alternative to paying a per diem rate. Hospitals who pay for uncompensated care reimburse physicians for services rendered to uninsured patients. Usually the payment rate is defined as a percentage of Medicare or Medicaid. This method assures physicians reimbursement for services rendered while taking emergency call coverage. MD Ranger subscribers have access to uncompensated care payment benchmarks that are published in our annual Call Coverage Report.

Check back next week for another alternative payment method for call coverage. In the meantime, if you have any questions about what call coverage alternative might be best for your facility, email our team at This email address is being protected from spambots. You need JavaScript enabled to view it..

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Alternatives to Call Coverage Per Diems

Before more stringent regulations around emergency coverage were passed in the 1980s (like EMTALA and other state laws), it was common for physicians to voluntarily take call as a requirement for hospital privileges and as a means of growing their private practices. With the growth of hospitalists and large multispecialty medical groups, the benefit of ED coverage has diminished. Additionally, physicians are acutely aware of the increasing numbers of Medicaid and uninsured patients in emergency rooms. This has contributed to fewer physicians being willing to take voluntary call, leaving hospitals no other choice but to pay physicians for coverage to meet regulatory requirements and patient needs.

Over the past decade, spending for physician expenditures as a percent of total hospital operating expenditures has grown over 40% according to OSHPD data. Our data show that the typical hospital spends more than two and a half million dollars per year on coverage. Costs will escalate when a hospital starts to compensate one specialty, which will create a domino effect with others.

Increasing Cost of California Physician Expenditures Graph

It is not uncommon for hospitals to experience a cascade effect once they start compensating for call coverage. However, it is generally not commercially reasonable to pay for all services. For example, 75% of hospitals report paying for general surgery while only 3% of hospitals report paying for podiatry call coverage. Just because a physician asks to be paid, does not mean it is commercially reasonable or necessary to pay. Navigating these negotiations can be difficult if the relationships are highly political or tenuous.

Percent Paying for Call Coverage Graph

Despite the increasing pressure to pay for emergency coverage across multiple specialties, it is possible to find middle ground with physicians on this issue that addresses the physicians' need to be recognized for the time and service and the hospital's need for coverage. Here are some suggestions to consider for your organization.

Ensure the Payment is Commercially Reasonable
Before you make any physician payment, whether it is a per diem or one of the alternatives below, determine whether paying for the service is commercially reasonable. A commercially reasonable agreement means that it is a common business practice for an organization to pay for that particular specialty and service. Establishing what's common generally takes market data, research, or a valuation. Despite the lack of a bright line, determining commercial reasonableness is an important first step before a payment rate is considered. If it's not reasonable to pay a per diem for a particular service but some sort of compensation is needed, you should consider alternatives.

Check back next week for another alternative payment method for call coverage. In the meantime, if you have any questions about what call coverage alternative might be best for your facility, email our team at This email address is being protected from spambots. You need JavaScript enabled to view it..

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Physicians are Paid a Premium at Large Facilities

Last year we wrote about how physicians are paid a premium at trauma centers.  While this holds true in 2014, another hospital characteristic that has consistently influenced physician payment rates is hospital size.

Larger hospitals have a higher frequency of call based on their larger volume.  For every 100 bed increase in ADC, a physician receives 25% more for call coverage and 14% more for medical direction.

The graph below shows the difference between facilities with a general acute ADC of under 125 versus those facilities with an ADC of 125 beds and over for general surgery call coverage based on MD Ranger’s 2014 reports.

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MD Ranger reports benchmarks for hospital characteristics such as trauma/non-trauma, urban/rural, number of general acute care beds, DSH percentage, and medicare days.  If you want more info on how these hospital characteristics affect payment rates, email us at This email address is being protected from spambots. You need JavaScript enabled to view it..

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How Will ACA Affect Physician Call and Administrative Rates?

No doubt about it, hospitals have been spending more on physician coverage and administrative payments than they have in the past. According to our database and 200+ subscribing facilities, we observe a ten percent increase in hospitals paying for coverage alone–not to mention administrative payments.

The Affordable Care Act could have several effects on physician call and administrative payments.  Expanded insurance coverage could relieve the burden of providing care to patients who were formerly uninsured and unable to pay. Physician income could increase as the result of having more people insured privately or through Medicaid.

On the other hand, physician fears over decreasing reimbursement from CMS and Medicaid programs could spur them to seek alternative income streams, including call coverage per diems and administrative payments.

As most things with health care reform, we’ll have to wait and see.  What do you think? Will physician administrative call payments and administrative rates increase or decrease as we implement the Affordable Care Act?

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What Specialties are Least Likely to Be Paid for Call?

This month, we’ve discussed call coverage topics at length.  Given that physician contracting dollars are, on average, 4-6% of a hospital’s operating budget (excluding employed physicians), providing emergency coverage is a huge expense.

Hospital administrators must be very careful when it comes to coverage spending, because it adds up quite quickly across your medical staff. Deciding whether or not to pay at all could be the most important decision you make, not what per diem rate you’ll pay.

What specialties are the least likely to be compensated for call?  Check out the graph below, where we’ve outlined the top ten services that most commonly are not paid for emergency coverage they provide. Why is this important? Establishing commercial reasonableness is the critical first step in your physician contract compliance process, and the services below might not be commercially reasonable to pay (further analysis is suggested). Click on the graph below to see more details about the specialties.

Least-Likely-to-be-Paid-Graph

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Which Physician Specialties Are Called Most Frequently for Emergency Coverage?

As you determine your overall physician contracting strategy and decide what services you will compensate for (and which ones you won’t), understanding the specialties who are called most frequently is an important variable to consider.

Knowing your hospital’s unique characteristics is important. Some examples are:

  • A hospital with a well-established psychiatric inpatient program should anticipate having a higher rate of coverage for psychiatric services, especially compared to hospitals with little psychiatric care available.
  • A children’s hospital; though pediatric surgery is usually called very rarely in a typical acute care hospital, this service would be much more utilized in a pediatric hospital.
  • A hospital with active trauma center where associated emergency services like general and trauma surgery, orthopedic surgery, neurosurgery, vascular surgery, and ENT/plastic surgery become more prominent.

Though frequency of call is dependent on the services the hospital offers, its market, and other unique factors, there are a handful of specialties that we can assume will be called for coverage again and again.

Services with usually higher call frequency:

  • Internal Medicine
  • General Surgery
  • Orthopedic Surgery
  • Gastroenterology
  • Cardiovascular

Services with a medium level of call frequency:

  • ENT
  • Plastic (facial, hand)
  • Critical care
  • Neurology
  • Psychiatry

Services with lower call frequency:

  • Neurosurgery
  • Vascular surgery
  • Cardiac/Thoracic
  • Urology
  • Infectious disease
  • Neonatology
  • Peds Surgery

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Most Expensive Physician Call Coverage Positions

In the context of your physician services budget, what impact does call coverage make on your overall spending?  Are there particular services that can be costly than others?

Many MD Ranger subscribers face these difficult questions.  Given that emergency call coverage is becoming an increasingly large portion of hospital budgets, anticipating overall costs is key for planning ahead.

According to our database of over 9,000 contracts, the below services have the most expensive median per diems.

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If you’re curious to learn more about the rates above, email me at This email address is being protected from spambots. You need JavaScript enabled to view it..

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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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