Health Management Brief: Physician Hospital Call Coverage Compensation

Working closely with many practices of all sizes PRS Consulting is acutely aware of key financial pressure points confronting the practice leadership team. Consistently near the top of the list is providing hospital on call coverage duties. This is a multi- faceted issue only magnified with increasing weak margins and soft physician incomes. Pressure points: 1. Receiving little or no payment for providing hospital on call coverage duties and, 2. Financial burdens of rising patient bad debt from growing numbers of uninsured and underinsured patients who receive and follow up care in the practice. Also, Physicians manage on-call responsibilities along with providing direct patient care in the practice and scheduled/unscheduled surgical procedures which are disrupted by physicians conferring with and supporting hospital physicians. Unfortunately, while the number of urology groups receiving on call coverage compensation continues to increase, it is far from uniformed.

In addition to the rise in operating costs, many practices are also facing a reduction in patient payment per service. It is imperative to acknowledge the cumulative effects of patient payments not growing as fast as practice overhead operating expense. Implementing effective solutions, while often problematic, requires skilled practice leadership and an organizational culture committed to engaging necessary change. For many practices confronting the realities of declining income levels is a serious problem and, to be fair, often not easily resolved. For the practice, the material financial impact for providing uncompensated care is simply not sustainable. For this session, we will briefly review how two urology practices approached a growing financial dilemma – securing fair compensation for providing on-call hospital coverage responsibilities. Step one was to define the core problem. For both practices, it was obtaining fair payment for on-call duties to offset the financial cost of disrupting scheduled patient appointments and providing uncompensated care and rising patient bad debt. The multiple issues driving the core problems: Declining income and ongoing disruption to practice patient care delivery. Interestingly, each practice’s view of the situation and how they chose to resolve the problem were markedly different. Working closely with both practices clearly highlighted how practice leadership was critical to achieving group consensus necessary to resolve the issues.

Caveats: Each practice situation is different and solutions are best customized to meet identified core needs. Physician practices have, in many ways, the ability to manage their future. Securing access to accurate practice data makes a convincing argument and incentive for improvement actions.

Situation: Both practices are similar in size and provide 24/7 on call coverage duties. Well established community based practice, 7-10 urologists and 2-3 NPPs providing growing community and regional referral services. Both practices have market primacy. Not surprisingly, both practices have good working relationships with respective community hospitals.  Again, one practice was receiving limited on call coverage payments and the other practice was receiving no payments for on-call coverage duties.

Core problem: Securing fair on-call coverage compensation is needed to offset time and the financial cost for providing on-call coverage and increasing patient bad debt. Negative operational and financial stress of physician on-call responsibilities is considerable, placing pressure on organization cohesiveness and is not sustainable

Discussions with the practice physicians: This initially focused mainly on reviewing data showing rising financial risk and looking for ways to generate income. Interestingly, the initial discussions did not include how this issue was allowed to fester unattended for so long. I heard repeatedly: “We have to provide call coverage” and “What happens if the hospital hires new urologists” What I failed to hear from either practice was why would the hospital pay for services it now receives for free or limited payment? Is the hospital aware of the tangible and intangible value of the urology group’s ongoing support? What can we do better to define the practice value to the community and hospital? What is the practice prepared to do, if negotiations are slow rolled or ignored?

Solution:  PRS Consulting partnered with both practices to obtain fair on-call coverage compensation.  Practice number one received, after lengthy negotiations, on-call coverage payment. The second practice that was receiving limited on call coverage compensation is still receiving just that.

In summary, today’s infinite challenges require that the practice understand key pressure points, then develop and implement solutions. Keep it simple and solve one problem and then another – one win at a time. There will always be more challenges.

 

 

The information in these articles is designed to be authoritative, and every effort has been made to ensure its accuracy at the time it was written. However, readers are encouraged to check with their individual carrier or private payers for updates and to confirm that this information conforms to their specific rules.