Anti-Kickback Statute and On-Call Payments to Physicians

EMTALA requires hospitals to provide “appropriate” medical examination and treatment to individuals who come to the emergency room.  Medicare requires hospitals to provide a list of doctors who are “on-call” to provide this treatment.  Doctors, particularly specialists, are refusing to be “on-call” unless they are paid for this service.    What does a hospital do?
In OIG Advisory Opinion No. 12-15 (October 30, 2012), the OIG recognized that “legitimate reasons” exist for hospitals to pay physicians to be “on-call.” By the same token, the OIG noted that payments for on-call coverage create a risk that physicians may demand payments even if a physician shortage does not exist in the area or hospitals may misuse payments as a method to entice physicians to join or remain on the hospital’s staff or to generate additional business for the hospital.
In Opinion No. 12-15, the OIG found a hospital’s on-call payment structure to present a “low risk of fraud and abuse.”  In the fact pattern discussed, the following were key elements:
            A.        Opportunity is offered to each physician at the Hospital.
            B.        Each physician who accepts signs a written contract with a term of one (1) year to serve on the “on call” staff.
            C.        Physicians agree to be available and to respond within required response times.
            D.        Physicians who admit patients must provide care during inpatient stays and see patients for follow up care.
            E.        Physicians must time prepare and complete all medical records and participate in medical staff committees.
            F.         Physicians, when on call, must provide:
                        i.          consultation by telephone
                        ii.         consultation in-person at the Hospital
                        iii.        at least one office visit.
In assessing this fact pattern, the OIG stated that Hospitals are not required to pay for on-call coverage.  In fact, on-call coverage should be scrutinized closely to ensure that it is not a vehicle to disguise payments for referrals.  In this instance, the Hospital took the following steps to assure that it satisfied that requirement:
            1.         The Hospital received an independent valuation that the per diem payment amounts were commercially reasonable.  Factors acknowledged in the calculation of “on call” payments included:
                        a.         The burden on the physician
                        b.         Likelihood of physician by specialty being actually called
                        c.         Amount of uncompensated care to be provided
                        d.         Extent of uncompensated treatment
                        e.         Includes substantial quantifiable services
            2.         The Hospital allocates funds for each specialty annually in advance, and all physicians in that specialty have the opportunity to participate regardless of referrals or other business generated to the Hospital.
            3.         Physicians actually provide services for which they are not compensated. 
            4.         The Hospital provides the opportunity to all physicians in each specialty, and “on-call” scheduling is equal for all physicians.
            5.         The Hospital absorbs all of the costs and cannot transfer that cost to Federal health care programs and does not include these expenses in its cost reports to Medicare.
Although recognizing that some patients are insured, and the physician will receive payment for seeing those patients, the OIG concluded that the arrangement at issue requires the participating physicians to provide services to a substantial number of patients who do not have insurance.
This opinion raises the following questions:
            a.         Can a Hospital deny physicians who join the medical staff after the contracts are signed the opportunity to participate in “on call” payments if the Hospital requires those new staff members to take call.
            b.         Can a Hospital pay “on call” payments to physicians if more than 81% of ED patients are covered by insurance/Medicare/Medicaid?  If not, what is the minimum percentage for which on-call payments may be justified?