Nearly all hospitals have to manage on-call contracts. Whether you run a large hospital, trauma center or a small private hospital, chances are you have on-call physicians. There are several factors that make compensating on-call physicians tricky though. From rate differentiation and adhering to fair market value (FMV), to contract type, we’ll explore a few ways your organization can simplify the management process of these physician contracts.
What It Means to be On-Call Today
In the past, physicians were willing to take on-call as a means to grow their individual practices. For example, a doctor might meet a patient who needed a bone set in the emergency department, then they would have the patient come to their office for follow-up care. On the primary care side, a similar scenario might occur, where physicians would take on-call to get new patients. Today, hospitalists primarily cover all inpatient visits on the medical side.
It is fair for on-call physicians – who are held to high levels of productivity and increasing costs of their own practice – to want to be paid for their time. Consider what it means to be on-call these days. You have to physically remain within a certain number of minutes to the hospital in case you are needed, so your time is often not your own. Put another way: You cannot have friends over if you might be called into work. But the complexities of on-call arrangements don’t stop there.
The Basics of On-Call Contracts and Payments
With on-call contracts, hospitals determine different rates depending on specialty, location and market considerations. For instance, an on-call dermatologist will likely make a lower rate than an on-call general surgeon. This is in part due to the frequency of actual call-ins as well as variable pay rates by specialty.
As for the payment terms, on-call physicians may be paid an hourly rate, daily unit payment, weekly unit payment, monthly unit, annual stipend, per call or per hour of call. Daily units of service are the most common. There is also a new complexity with so many physicians employed by hospitals. Most employed specialists have some component of on-call required in their contract. For example, a physician may cover two 24-hour shifts of on-call in the emergency room as part of a contract, where shifts 3-7 will be paid at x dollars for a weekday, y for a weekend and z for a holiday. In other words, it can get complicated and fast!
Simplifying Your Approach to On-Call
Many hospitals still rely on paper time logs and call calendars to process on-call payments that are then manually entered into payroll for employed physicians or accounts payable for independent physicians. This leaves room to all types of errors. For instance, it is common for a hospital to either pay the wrong unit for the on-call shift, or inadvertently pay two physicians of the same specialty to cover the same shift when time is entered by physicians and processed at different times. These errors may be small in a clerical sense, but they cost hospitals thousands of dollars each year. It can be hundreds of thousands at major trauma centers.
Requiring physicians to track on-call by paper can also contribute to burnout amongst medical staff. According to our recent survey of physicians nationwide, 68 percent of doctors said burnout is still an issue. At the same time, 55% reported spending 1 to 3 hours per day on admin work unrelated to patient care or EHRs, including filling out paperwork for payments. This is not where you want physicians spending much of their time.
So, here are four tips to enhance your strategy around on-call contracts and payments.