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An increase in uninsured patients who show up in emergency departments (EDs), physician specialty shortages, and a physician population unwilling to take call all have led to a now-common practice: hospitals pay physician-specialists for on-call coverage of their EDs.

Though essential for providing adequate emergency care, this hospital-physician arrangement can violate anti-kickback laws. But recently, one hospital’s payments to on-call physicians was given an official federal stamp of approval. What does this official statement mean for hospital medicine groups and the hospitalists they employ?

Origins of the Opinion

In September 2007, the Office of the Inspector General (OIG) issued an advisory opinion that a hospital that pays physicians for providing on-call and indigent care services in the ED does not violate the federal anti-kickback statute.

An unnamed medical center requested the opinion and submitted details on the comprehensive, detailed program it had created to ensure coverage of the ED.

The hospital’s program includes varied payment structures for staff physicians based on their participation in an on-call schedule for the ED and provision of inpatient follow-up care to patients seen while on call, among other actions.

Policy Points

Patient Safety Toolkits Available from AHRQ

The Agency for Healthcare Quality and Research (AHRQ) has released 17 toolkits for Partnerships in Implementing Patient Safety (PIPS). The toolkits were developed by AHRQ-funded experts, including several hospitalists who specialize in patient safety research. They’re designed to help physicians, nurses, hospital managers, patients, and others reduce medical errors. For details to access the toolkits, visit AHRQ’s Web site at

Money Tops List of Hospital CEOs’ Worries

It’s no surprise that, according to a 2007 survey by the American College of Healthcare Executives (ACHE), financial challenges again ranked as the top concern for hospital chief executive officers. In its annual survey of top issues confronting hospital CEOs, ACHE asked respondents to rank the three most pressing issues affecting their hospital and identify specific areas of concern. Seventy percent cited financial challenges as one of their top three concerns, compared with 72% in 2006 and 67% in 2005. Providing care to uninsured patients placed second, followed by hospital relationships with physicians, according to the survey results.

Congress Boosts Budget for AHRQ

At the end of its 2007 term, Congress approved an omnibus bill that provides fiscal year 2008 funding for many federal health agencies, including AHRQ. The bill boosts AHRQ’s funding from $319 million to $334 million, including $30 million earmarked for comparative effectiveness research.

CMS Offers Education on Two Hot Topics

A new program from the Centers for Medicare and Medicaid Services (CMS) concerning hospital-acquired infections is expected to have a significant effect on hospital medicine.

Secretary of Health and Human Services Mike Leavitt was charged with identifying at least two conditions that:

  • Are high cost, high volume, or both;
  • Result in the assignment of a case to a diagnosis-related group that has a higher payment when present as a secondary diagnosis; and
  • Could reasonably have been prevented through the application of evidence-based guidelines.

After September, hospitals will not receive additional payment for discharges when one of the conditions is acquired during hospitalization.

Two fact sheets are available on the CMS Web site ( HospitalAcqCond):

  • “The Hospital-Acquired Conditions (HAC) in Acute Inpatient Prospective Payment System (IPPS) Hospitals Fact Sheet”; and
  • “The Present on Admission (POA) Indicator Reporting by Acute Inpatient Prospective Payment System (IPPS) Hospitals Fact Sheet.”

Also available are those conditions being considered for fiscal year 2009 rulemaking process and reporting requirements.

Hospitalists’ consistent and complete medical documentation will become even more important under this program. Medical record documentation from any provider involved in the care and treatment of the patient can be used to support the determination of whether a condition was present on admission.—JJ

The program applies to 18 specialties including hospitalists, and all participating physicians receive a per-diem payment for each on-call day.

Lou Glaser, partner at law firm of Sonnenschein Nath & Rosenthal, LLP, in Chicago, wrote the request.

“In this particular case, the hospital extended the program to nearly every specialty on the staff,” he explains. “Few hospitals have gone that far. But my client wanted to ensure that this program was appropriate and, if questioned, wanted to be able to say that they did everything possible to set up an appropriate program. They also, to the extent that if the OIG said no, wanted to be able to tell their physicians that they tried everything possible” to set up a fair payment system.

Ron Greeno, MD, FCCP, chief medical officer at Cogent Healthcare in Irvine, Calif., and a member of SHM’s Public Policy Committee, is surprised the opinion was requested.

“It came out of the blue,” he says. “We weren’t worrying about it.” He believes the shortage of physicians willing to provide on-call care in the ED—particularly to uninsured patients—forces hospitals to create similar payment structures.

“The opinion basically says the OIG doesn’t frown on the current practice,” Dr. Greeno says. “There’s no reason they would—and if they did, it would mean a staffing crisis for all hospitals.” Part of this potential crisis includes care for uninsured patients, for which the hospital isn’t compensated.

Uninsured Patients

A pivotal point in the OIG opinion and in the problems hospitals have with ED on-call staffing is payment for care of uninsured patients—especially those who require an on-call physician at the ED in the middle of the night.

“My client wanted a solution to this, a solution that ensured their indigent patients would receive care from all necessary specialties,” says Glaser.

The payment program created by Glaser’s client hospitals was structured to include care for indigent patients. “The OIG latched on to that for a number of reasons,” says Glaser. “But basically it shows that physicians are being paid for something that they would not otherwise be paid for.”

Effect on Hospitalists

Though the OIG opinion doesn’t change status quo for most, it provides valuable guidance on what the government considers an acceptable plan for covering on-call shortages. Criteria outlined in the opinion include:

  • There must be a clear, demonstrated need for the on-call service;
  • Participating physicians would otherwise be un- or under-compensated for a meaningful portion of their work, such as caring for uninsured admissions;
  • Participating physicians deliver defined added value such as better outcomes, or participation in quality initiatives; and
  • Reimbursement reflects market value.

Because most hospitalists are employed by or supported by the hospital for which they are on call, they are entirely exempt from anti-kickback issues. Therefore, the OIG opinion won’t affect their on-call payments.

“The opinion obviously isn’t geared toward any specialty,” Glaser points out. “In fact, the OIG noted that the hospital could not select specific groups and try to steer money toward those. That said, hospitalists are in a slightly different position than other medical staff. They maintain their practice at the hospital, and depend on that for their volume and income.”

If your hospital medicine group is not supported primarily by the hospital, how can you ensure your on-call payments are legally acceptable?

First, have a lawyer review your arrangements. While the onus for staying within the bounds of the law is on hospitals, it’s important for every hospital medicine group to have local legal experts examine their current or proposed payment structure for on-call and indigent care.

“Any time a hospital gives money to a doctor, [he or she] is subject to scrutiny,” says Dr. Greeno. “This has to be legally vetted.”

Second, document your own payment system. “There was a great deal of discussion in the request for opinion on how the hospital established its payment structure,” says Glaser. “The opinion shows the importance of having a well-documented process for establishing the rates to be paid, and showing that that’s fair.”

You can start your review of your own payment program by downloading a comprehensive overview of the OIG advisory opinion at SHM’s Web site,

“For most of us who have been minding their p’s and q’s, [the opinion] doesn’t require any changes,” Dr. Greeno stresses. However, hospital medicine directors should stay on the safe side and check any on-call payment programs you might be participating in. TH

Jane Jerrard has written for The Hospitalist since 2005.

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