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For as long as most of us can remember, the daily stipend has been used as the primary method of compensating specialists for providing Emergency Department call coverage. Stipends are easy to establish, easy to administer, easy to adjust, and easy to understand for both physicians and hospital administration. They’re predictable, and most physicians and hospital CFOs/CEOs really like predictable.
The problem with the predictable and “easy” stipend solution is that it is often too rigid and/or too expensive to use in every situation. This presents a problem for your call compensation program. Thankfully, in certain cases the following alternative payment methods can be used in addition to, or instead of, daily stipends in order to satisfy your call coverage requirements.
It can be pretty hard to justify a daily stipend for specialties that are only occasionally called to the ER (ENT for example) to consult on or treat a patient. For low-volume specialties like these, the temptation is to offer a correspondingly low stipend amount. Unfortunately, most specialists find minimal stipend payments to be unacceptable, or even worse, insulting.
In cases like these, we’ve had good success offering low-volume specialists a guaranteed fixed payment just for coming in to the ER to see a patient, regardless of the services they actually provide. This fixed payment can range from a few hundred dollars to a thousand dollars or more, depending on the specialty and the likelihood that extensive medical care will be needed.
Combining an activation fee with any available insurance reimbursement will often provide sufficient overall payment to motivate low-volume specialists to participate in and support your ER call panel.
One of the most effective ways to lessen your dependence on stipends is to incorporate fee-for-service (FFS) payments into your compensation program. This “blended” approach allows the fixed payments (stipends) to address the inconvenience of being on call and the variable FFS payments to compensate specialists for the services performed while on call.
In our experience, physicians respond well when they see hospitals recognize the variable nature of services rendered when on call. They appreciate when those services are valued and fairly reimbursed, and when their financial risk is eliminated through a guaranteed payment rate provided by the hospital. In most of the programs we manage, the hospital sets the reimbursement rate at 80% to 100% of the Medicare Fee Schedule and limits the FFS reimbursement to only uninsured and under-insured patients.
When the volume, value, and risk variables of call panel participation are effectively addressed through fee-for-service compensation, stipend payment levels can be re-examined and adjusted to reflect their diminished role in your call compensation program.
In some cases, we have seen health systems leverage their size by soliciting proposals from large, single-specialty or multi-specialty medical groups to provide call coverage for one or more of their hospitals. This works especially well in larger metropolitan markets where multiple medical groups compete with each other and where the hospitals aren’t separated by great distances.
In a typical scenario, an RFP to provide call coverage for a particular specialty at three local hospitals might be circulated among all of the local medical groups with ten or more providers. Whereas each of the hospitals may be paying a stipend of between $500 and $1,000 per night to individual physicians, and missing out on any economy of scale opportunity, combining their call panel needs into a single contract creates the kind of revenue opportunity that larger medical practices find quite appealing. The ability to allocate a single specialist (plus a backup) every night to cover multiple facilities creates excellent leverage and efficiency for the medical group and can result in significant discounting and savings to all three hospitals.
While stipends may be a fixture in most call compensation programs, they certainly don’t have to be the only payment mechanism at your disposal. Activation payments are an ideal solution for compensating low-volume specialties, while global fixed payments are an excellent choice when size and scale work to your advantage. For everything in between, adding a fee-for-service component to your call compensation program provides an intuitive and equitable payment solution that can improve call panel participation and significantly reduce your annual stipend expense.
Our performance-based approach provides hospitals with a cost-effective alternative to the rising costs of stipends, while simultaneously reducing compliance risks. Schedule a consultation today to get started.