Trends and FMV Considerations in Structuring On-Call Coverage Payments

Published by PHA Pulse

Payments to physicians for providing on-call coverage have become increasingly popular in the marketplace. As such, on-call compensation arrangements have been thrust into the regulatory spotlight, and the importance of ensuring a fair market value (FMV) compensation structure has never been greater. Understanding the trends, payment methodologies and FMV considerations are vital in structuring a compliant on-call coverage arrangement.

On-Call Coverage Trends

Historically, it has been standard practice for physicians to provide call coverage. They provided uncompensated emergent coverage to gain admitting privileges at hospitals and as a means of building patient volume for their practice. Hospitals generally required physicians to participate in call rotations as a contractual expectation to maintain emergent coverage at their facilities. Today, the trend and market for physician on-call coverage has completely transformed.

Physicians have become increasingly averse to providing uncompensated emergent coverage. Key factors influencing this trend include the rise in the uninsured population, fear of malpractice lawsuits, and the disruption of their personal lives and private practices. Additionally, there is a shortage of physicians in the United States that is only expected to worsen. According to the Association of American Medical Colleges, there could be a shortage of up to 90,000 physicians in the United States within the next eight years. Recent trends have also indicated that it has become more common for tenured physicians to negotiate on-call opt-out clauses.

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