The Emergency Medical Treatment and Active Labor Act (EMTALA), also known as the “Patient Anti-Dumping Law,” changed the way hospitals deliver emergency care and their relationships with physician staff.
The law forbids the dumping of patients for financial reasons and requires hospital emergency rooms to screen, stabilize or transfer patients who present with emergency conditions.
Los Angeles healthcare attorney Lowell Brown of the firm Arent Fox says the EMTALA law creates a distorted market that requires hospitals to provide call coverage, but does not impose similar mandates on physicians.
“These days in many parts of the country (EMTALA) compels hospitals to make some kind of financial arrangement with physicians,” says Brown, who specializes in EMTALA law. “Why is the burden only on hospitals? My guess is that the physician lobby is more powerful and influential. The Medicare law can easily be amended to require physicians to provide call coverage if they provide care at a Medicare facility. But every time it’s been suggested, it has been beaten back. A lot of this is tragic. Our government has pitted physicians against hospitals, requiring hospitals to provide uncompensated care and in such a way to make physicians and hospitals adversaries in arranging that care.”
CMS has set no minimum call requirements, but expects hospitals to provide specialty services they offer normally on their on-call rosters.
Old rules don’t apply anymore
For decades physicians accepted on-call coverage duties as the price of staff privileges. Many found it a good way to build up their practices and add new patients.
In some parts of the country, those old ties still bind, although they may be fraying.
John Mulligan, MD, the emergency department director for St. Mary Medical Center in Hobart, Ind., says that physicians there still view on-call coverage as an obligation of obtaining staff privileges within the three-hospital Community Healthcare System, the hospital’s parent company.
Dr. Mulligan says the system’s bylaws require doctors to take ER on-call duty, but says a competing local system does pay specialists.
“We’ve discussed this within the Community system,” he concedes. “But what’s kept our administration from going there is that slippery slope. Once you pay once, you have to pay them all and it just keeps growing.”
But amid the growing number of uninsured, rising costs of malpractice insurance and operating practices and declining reimbursements, particularly from government payors like Medicaid, doctors are increasingly reluctant to accept on-call coverage.
How bad has it become? A 2005 membership survey from the American College of Physician Executives revealed that 64 percent of the 814 survey respondents reported problems with their hospitals getting on-call specialty coverage. Forty-six percent said they paid specialists for that coverage, a figure that has risen closer to 70 percent in 2009.
In the past decade the rate of emergency department utilization has rise 7 percent, from 36.9 to 39.6 visits per 100 persons. And nationally 73 percent of emergency departments reported inadequate on-call coverage by specialist physicians, according to a survey published in the Feb. 2008 issue of the New England Journal of Medicine’s “NEJM CareerCenter Recruiting Physicians Today Newsletter.”
And because of improved technology, treatments and drugs, many procedures formerly performed exclusively in hospitals have migrated to outpatient settings. Specialists like orthopedic surgeons and spine specialists are among a growing number of specialists demanding to be paid for on-call duty, or refusing it. Many hospitals have acquiesced to the pressure, feeling they have no other choice.
One Southern California system paid $17 million for on-call coverage in four emergency rooms. And an Orange County hospital pays $4,000 per shift to neurosurgeons, while a Florida hospital pays $6,000.
Susan Reynolds, MD, president and CEO of the Los Angeles-based Medical Leadership Institute, says on-call coverage drives hospital medical staff chiefs crazy as well. Dr. Reynolds says the most exorbitant fees are found in California, Florida and Texas.
“Our view is many of those on-call fees exceed fair market value,” she says. “The squeaky wheel gets the grease and hospitals are in bidding wars with the hospitals down the street that want your orthopedists and raises the ante. We encourage doctors and hospitals to put data together and crunch numbers before they pay physicians for call duty.”
Hospitals seeking creative approaches
Pittsburgh healthcare attorney Dan Mulholland of the firm Horty, Springer & Mattern says that the rising level of payment for something hospitals never previously paid for is unsustainable. “Some hospitals are in bad financial shape and can’t afford to pay for call coverage,” Mr. Mulholland says. “Nonetheless they still face EMTALA obligations.”
He says nationally hospitals and physicians are collaborating on programs that recognize the limited resources of hospitals as well as the contributions and personal and financial sacrifices of on-call physicians.
One example might be the work of Max Hockenberry, senior partner and co-founder of the Charlotte, N.C.-based MaxWorth Consulting, who has employed an innovative strategy to bring doctors and hospitals together to resolve on-call payment issues. MaxWorth’s program, Call Pay Solution, is a deferred compensation plan funded by a financial insurance tool common in banking and other industries, but only recently been applied to on-call coverage. Called a hospital-owned life insurance (HOLI), the hospital purchases life insurance policies on its medical staff as a means to fund on-call coverage.
“Mortality in a group setting is very predictable and quantifiable,” he says. “You know what the numbers will look like. The hospital places insurance on the physicians in the plan and as those people pass away, there is a cost recovery to the hospital. This not only provides long term stability, but helps the hospital pay for call coverage into the future. We see that as a win-win.”
Why do doctors choose deferred compensation instead of cash?
“Taxes are as much a problem for them as anyone else,” Mr. Hockenberry says. “They’re looking for ways of reducing their personal income tax liability by leveraging the tax exempt status of hospitals. Higher compensation specialists like orthopedic surgeons will gravitate to this model quickly.”
He says hospitals with employed deferred compensation programs to fund call coverage also have used the program in other ways, such as leveraging physician participation in quality programs and as disincentives against staff physicians investing in competing facilities. “A hospital can’t control where physicians refer patients, but can incentivize them not to invest in facilities that compete against the hospital,” he says.
Hospitals also have employed the program to fund medical directorships in an era when it’s increasingly difficult to attract doctors to serve on committees. He says the program encourages older physicians to remain on the call schedule even after they have left or are no longer required to take such duty. Around two dozen hospitals have adopted the programs since MaxWorth began offering them in 2006, including many that had not paid for call coverage before.
Al Pilong, president of 411-bed Winchester (Va.) Medical Center and senior vice president of five-hospital Valley Health, says Winchester committed to funding its call coverage program with 10 percent of its operating margins, with a bottom of $2.5 million and a $4.5 million ceiling. Mr. Pilong says its Attending Faculty Program is operated by a call committee run by physicians and an advisory board of system board members and physicians. He says staff physicians were ranked into five tiers based on the frequency and acuity of their call burden. Based on those tiers, they are accorded a fee for each call shift they perform and that money goes into a deferred compensation fund that Winchester doctors can access after a five-year vesting.
“We want to reward physicians who are committed to us over the long haul,” he says. “When you hit 60, you can be paid out. If you leave before you’re vested, then the money stays with the hospital and reduces the hospital’s expense.”
Mr. Pilong says when he arrived in 2005, there was tremendous pressure on the administration to pay physicians for call duty. “Doctors weren’t willing to do traditional call duty for privileges anymore and rather than just writing a check, the hospital sought a more lasting solution,” he says. “The program works well for the most part and satisfies our (350-physician) staff.”
Mr. Pilong says many of the physicians view the on-call plan as a means for funding their retirement or paying for their children’s education.
He says call duty is not as big of a problem as it was, but remains an ongoing issue.
“It’s a necessary evil in the minds of our medical staff to come out in the middle of the night, but this has definitely softened the physicians’ pain and burden and they know there’s money going into a fund that allows us to do it in a responsible way and gives us some retention and commitment to our ER and community.”
Attorney Mr. Mulholland, who worked with Winchester, says the on-call compensation program has enjoyed almost universal acceptance from physicians and hospitals.
“Several thousand doctors now have these contracts around the country,” he says, noting that many physicians have found the deferred compensation for call duty a better deal than retirement.
For better or worse, California sets the trend
Los Angeles attorney Mr. Brown says in California the trend has escalated to pay physicians, especially specialists.
“Ortho and spine are critical areas of specialty that they’re paying for,” says Mr. Brown, who specializes in EMTALA law. “There are all kinds of ways to pay. One is to make the doctor whole by covering him for treating patients who are uninsured, typically paying at a Medicare rate plus a percentage over that. The other is to pay some kind of stipend to be available on call, whether or not the doctor actually comes in.”
Mr. Brown says stipends range from $500 per shift to several thousand dollars for hard-to-get specialties.
James Lott, executive vice president of the 170-member Hospital Association of Southern California, said hospital emergency department on-call systems were on the brink of disaster just three years ago, noting then that paying physicians for on-call coverage was becoming the norm. Mr. Lott says Southern California’s uninsured population leveled off in 2007, but grew again last year to 6.5 million, or one in every four patients presenting to emergency rooms.
“If anything, it’s gotten worse since then,” observes Mr. Lott, who says in many states hospitals resolve some of their on-call coverage obligations by employing physicians, such as hospitalists or traumatologists, to relieve some of their on-call burden. But California is one of seven states that ban the employment of physicians by hospitals, except for public hospitals and HMO hospitals like Kaiser.
Mr. Lott says Southern California hospitals pay as little as $250 per shift, but noted the one Orange County hospital paying $4,000 per shift to compensate neurosurgeons. “It’s more commonly $750-$1,000 per shift, plus a guarantee to cover uninsured patients with Medicare plus between 20-50 percent,” he says.
Richard Sheridan, general counsel and senior vice president for San Diego-based Scripps Health, which operates four emergency rooms, says physicians now expect to be paid and hospitals have little choice but to comply.
“If we ask them to serve [call] as a condition for privileges, then they say goodbye,” Mr. Sheridan says. “Some of the toughest specialists to find for on-call don’t do much in hospitals anymore, such as ENTs. But just having them is incredibly important to us for our patients. They don’t need us, we need them. We have an obligation under EMTALA to serve all patients, but physicians have no similar obligation and that has driven this market.
“We started by paying needed certain specialists like neurologists and OB/GYNs for each shift,” he says. “That worked for awhile. But we got ourselves into a lot of trouble because we were paying disparately and whenever anyone learned about the differences, they wanted more and we felt trapped.”
He says Scripps contracted with a third-party medical group established for this purpose and engaged on-call physicians to be paid a service rate (based on a percentage of Medicare) for on-call shifts. “They collect the money and we subsidize the difference,” he says. “We felt good that we weren’t just paying for people to be sitting on-call, but paying for people actually providing services.”
That system-wide payment arrangement, however, has eroded and required replacement.
He says an innovative group of physicians at 180-bed Scripps Memorial Hospital in Encinitas, Calif., agreed to provide on-call duty for the amount the hospital spent last year on on-call duty — and also agreed to drive up quality scores. They set up a two-year agreement to form a special purpose independent practice association set up to only take ER calls.
“Now we’ve offloaded the problem and they’ve agreed to indemnify us if they cause an EMTALA problem or med malpractice incident,” says Mr. Sheridan. “They’ll make a nice margin on this, which seems like a good business model. This is the first of its kind in Southern California, but I’ll bet exclusive call arrangements will become the norm.”
Orthopedists struggle for solutions
Adam Bright, MD, an orthopedic surgeon from Sarasota, Fla., remembers the on-call, two-hospital coverage crisis of 2004 in his Gulf Coast city. Dr. Bright says the city’s largest hospital, not-for-profit Sarasota Memorial Hospital, announced plans to double the size of its emergency room. At the time the hospital’s ER already was overflowing with growing numbers of uninsured and 10 orthopedic surgeons were rotating for ER call duty. The other Sarasota facility, Doctors Hospital, which is owned by for-profit HCA, treated fewer uninsured.
Sarasota Memorial’s call policy mandated younger physicians assume call duty, noting that some of the older practicing doctors had not shared the obligation for 20 years. A Young Turks rebellion was in the making.
“It got to the point where we were losing money taking call duty,” Dr. Bright says. “You could go bankrupt treating too many uninsured patients. At the same time we were feeling higher real estate prices and leases, greater documentation requirements and higher medical malpractice insurance.”
He says the call duty required doctors to get up in the middle of the night, sometimes treating patients all night so that the next day they’d have to cancel appointments for their paying patients. “And we did this without pay,” he says. “The disruption to our office practices convinced many doctors to no longer take call. It wasn’t a matter of not enjoying doing it. We could no longer afford to do it.”
Dr. Bright and some of the other young orthopedic surgeons approached the hospital with a proposal: consider contracting with the groups to provide call for ER. Sarasota Memorial began to pay them.
He says Sarasota Memorial pays specialists around $1,000 per night because its uninsured patient load is greater than nearby Doctors Hospital, which pays around $400 per shift.
“Before we took call without pay and took a bath,” he says. “The hospital recognized that and decided to pay a stipend for us to be available and care for the uninsured that night. We were able to work it out. We still don’t have a solution for every problem.”
Orthopedic surgeons are often caught in the middle of the call issue and pay a price. That’s why Joseph Zuckerman, MD, president of the American Academy of Orthopedic Surgeons, says the academy is meeting with the American Hospital Association to find solutions to the on-call coverage problem.
“We want to do things to make this better and need to involve all the stakeholders, not just nationally but locally,” says Dr. Zuckerman, a professor at the New York University School of Medicine and on staff at the New York University Hospital Joint Diseases. “If a hospital has trouble with ER coverage, it must involve the physicians. In many parts of the country hospitals and orthopedic surgeons have worked out systems to provide coverage without disrupting physician practices. You may see a stalemate in one community,” he says. “But five miles away they’ve worked it out. Institutions have become more creative.”
Howard Salmon of the Salt Lake City-based Phase 2 Consulting, says the environment is unlikely to improve unless several things happen nationally. Mr. Salmon says the HHS’ Inspector General needs to investigate and address the legality of skyrocketing on-call fees some specialists are demanding far above fair market value and say they will not tolerate them.
“And hospitals must also find legal ways to counteract the growing market power of some specialists who are exploiting their market advantage,” Mr. Salmon says. “Resolving the high numbers of uninsured patients will go a long way to fixing this. Physicians have to deal with a lot of uncompensated care and that’s driving this as well.”
Mr. Salmon says in a recent seminar with the CEOs of 10 for-profit hospitals, all part of the same chain, that the regional head of that chain told him that on-call coverage for emergency departments is the fastest growing expense line item.
