OIG Advisory Opinion Approves Physician On-Call Coverage Payment Arrangement

The Office of Inspector General ("OIG") of the Department of Health and Human Services issued an Advisory Opinion on September 27, 2007 announcing its approval of an arrangement in which a non-profit hospital compensated physicians for emergency department on-call coverage ("Arrangement").

The hospital that requested the Advisory Opinion is a tax-exempt, not-for-profit medical center with a charitable mission of assisting the poor. The hospital's emergency department is always open and treats all patients independent of their ability to pay. About 10% of the hospital's uninsured emergency room patients are subsequently admitted for inpatient treatment.

The hospital experienced difficulty securing physicians to provide on-call emergency room coverage and subsequent inpatient treatment of uninsured emergency department patients because of the increasing financial difficulties associated with uncompensated patient care. The hospital was unable to find physicians in some specialties who were willing to provide any emergency department on-call coverage without compensation. The hospital was unable to fulfill its charitable mission because its inability to provide adequate emergency room coverage in some specialties required it to transfer some uninsured and underinsured emergency department patients to other facilities.

The hospital proposed an Arrangement through which its staff physicians in particular medical specialties would provide emergency department on-call coverage, respond to emergency cases in the emergency room, and provide inpatient treatment for uninsured patients. All physicians on the hospital staff in the particular specialties were offered two-year contracts under the Arrangement.

These contracts would obligate the physicians to participate in call rotation with an equitable distribution of on-call hours among participating physicians in a given specialty. Independent of patients' ability to pay, the physicians must provide inpatient treatment to patients admitted while they were on-call in the emergency room until discharge. The physicians must also respond to calls from the emergency department in a reasonable time, cooperate with hospital care management and quality initiatives, and provide prompt documentation of their services.

Under the Arrangement, the hospital would pay the physicians a per diem rate for each day spent on-call for the emergency department; however, each physician must provide one and one-half days for...