Transcript Approaches to Ensuring Emergency Department Call Coverage

Preventing Emergency
Department Emergencies
South Florida Hospital &
Healthcare Association Annual
Conference
June 8, 2007
What are we really dealing with?
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Physician’s Top Three Priorities
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Liability
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Lifestyle
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Physician-Patient Relationship with Individual Unassigned
Increased Exposure to Professional Liability
Change in Expectations, Culture, Concept of Social Contract
Loss of Sleep and Other Serious Disruptions to Normal Daily Routines
Compensation
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On Call Obligations set forth in Medical Staff Bylaws, Rules and Regulations not Enforced
unless Pattern of Failure or Refusal to Come In Combined with Unfavorable Clinical Outcome
Opportunity Costs – not providing care for elective patients
Extra costs physicians absorb to diagnose and treat uninsured and underinsured
American Academy of Orthopaedic Surgeons Position Paper – The Responsibilities of Hospitals
Equitable Treatment for All Physicians – American Academy of Family Physicians Position
Statement
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What Does a Hospitalist Program Look Like?
Unassigned Patient Program – Take Pressure off Primary Care Physicians otherwise On
Call
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Specific quality improvement criteria are condition of contract in response to history of
physicians admitting but not seeing patients for several days
Contract with Two Separate Internal Medicine Group Practices
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One Group Strictly Hospital-Based, No Outside Practice
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Other Contracted Group’s Members Also Maintain Outside Practice
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Emergency physician determines if individual requires observation or admission by member of group
contracted
On duty group member must respond within one hour and admit as appropriate per criteria unassigned
individual whether or not insured and coordinate consultations and work with nursing and case
management to expedite further medical examination and treatment
Payment is made on a per patient encounter basis with payment reduced by one half for Medicaid
pending
Group bills and collects and collections are netted against per patient encounter payment and
reconciliation on quarterly basis is made (guarantee payment methodology for hospital-based group)
Per patient encounter payment is made only for response to uninsured individuals, and group bills,
collects and keeps payment from third party payers
Hospital also maintains separate professional liability insurance policy with payment
amount of premium based upon number of emergency department patient encounters and
coverage of all physicians who serve on call
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With No End in Sight, Is There A Creative Solution?
Collaborative Effort – Update on Palm Beach County
Undertaking
• Countywide shortage identified three years ago
• Medical Society engaged and Hospitals participated in
funding detailed investigation and recommendations from
MDContent (emergency physician and health care
economist from Ann Arbor, Michigan)
• Emergency Department Management Group formed in
April, 2005, as committee of Medical Society Services
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Goal of twelve-member group – to improve emergency department
on call access for county residents
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Collaborative Effort Being Pursued
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Primary objective – to establish system to help hospitals
ensure they have place within county to refer patients in
need of specialists hard to find
• Require county health care district and local hospitals to pay
specialists to work at certain hospitals to handle emergencies
while also furnishing the specialists with professional liability
insurance coverage
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At end of November, 2006, group submitted proposal to
district
• District has nearly twenty years experience administering
county trauma system
• Organizing on-call coverage program through political
subdivision of state affords hospitals antitrust protection
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What Would Governance of Collaboration Look Like?
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District board of directors to appoint advisory
committee similar to existing trauma system advisory
committee
Advisory committee to include nine members
• Three hospital executives, one of whom must be CEO
• Three physicians, two of whom must be available on call to
emergency department for one or more hospitals in county and
one of whom must be emergency physician who works in
emergency department of at least one hospital in county
• Two at large community leaders
• One district board member, preferably not public office holder
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What Governmental Approval Needs to be Sought?
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Actual implementation plan will require approval from
district’s board of directors, Florida Agency for Health
Care Administration and U.S. Department of Justice
Proposal submitted is framework for specialty care
access services network
Proposed framework was structured to be consistent
with MDContent recommendations that
• Solution to specialty availability crisis, to succeed, must be
fair, transparent, durable and easy to administer
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What Objectives are Intended to be Met?
• Solution must satisfy physician objectives
 Liability coverage for emergency department care
rendered (priority #1 - liability)
 Fewer call days (priority #2 – lifestyle)
 Guaranteed payment for services (priority #3 –
compensation)
• Solution must also satisfy hospital objectives
 To meet legal/regulatory requirements
 To not be cost prohibitive
 To allow hospitals to continue to provide elective services
when there are not enough physicians to cover the
emergency department every day of the month
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What Objectives are Intended to be Met?
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Proposed specialty care access services network is
intended to accomplish following objectives –
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Assure consistent access to specialty services
Establish shared financial responsibility
Provide for quality monitoring
Provide liability protection for participating physicians
Allow voluntary participation by hospitals and physicians
Provide market-based compensation for participating
physicians
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What is the Status of this Project Now?
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Mentioned in U.S. News and World Report article as
multi-pronged solution that would regionalize certain
critical on-call services, allowing several hospitals to
pool on-call doctors to make sure these specialties are
covered at any given time and have hospitals pay for
liability insurance just for on-call cases
District Board of Directors Action on Specialty Care
Access Services Network Proposal - Update
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How Can We Get Information to Address
Needs Now and Later?
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County-wide physician census for Palm Beach
County was conducted by the Medical Society per
recommendation of MDContent to get data to address
immediate supply needs for critical physician
specialties and for long-term physician recruitment
needs for Palm Beach County.
Report was provided to help leaders address projected
shortfalls by 2011 that will affect ED on call access.
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Why is Determination of Fair Market Value Important?
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Stark law, 42 U.S.C. §1395nn, Prohibition
• Professional services arrangement exception [42 U.S.C. §1395nn(e)(3);
42 CFR §411.357(d); Federal Register, Vol. 69, No. 59, pages 1613839, see, also, discussion on pages 16089-93 (March 26, 2004]
• Fair market value definition from Stark II Phase II regulations [42
CFR §411.351; Federal Register, Vol. 69, No. 59, page 16128, see,
also, discussion on page 16107 (March 26, 2004)]
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the value in arm’s length transactions, consistent with the general market
value. General market value means . . . the compensation that would be
included in a service agreement as the result of bona fide bargaining
between well-informed parties to the agreement who are not otherwise in a
position to generate business for the other party . . . at the time of the
services agreement
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What Should Valuator Know and Do?
• Prohibition based upon definition against taking into account other agreements
for comparable services between physicians and hospitals in a position to
generate business
• Independent third party valuation
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Certain objective thresholds applied in consistent manner
Valuator has knowledge and familiarity with Stark definition of fair market value
and prohibition against reliance upon comparable agreements between referring
physicians and hospitals
Valuator also cognizant of “one purpose test” from Greber anti-kickback case.
Particularly important if compensation arrangement with on call physician includes
multiple facets such as
• Per diem fee
• “Activation fee” – payment triggered upon physician responding at the request by the
emergency physician to actually come into the emergency department
• Fee per service furnished to unassigned individuals examined and treated at hospital in
observation or admitted through emergency department
• Professional liability insurance coverage for examination and treatment of unassigned
individuals
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What can Payments be For? What Must Valuation Include?
• Stark requires payment be made only for services reasonable and
necessary for legitimate business purposes of arrangement and
compensation be set forth in advance and not exceed FMV
• Third party valuation must verify valuation includes
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Analysis of important terms and provisions of proposed arrangement
Terms referenced in valuation are consistent with terms set forth within
contract
Valuation references same parties as does contract
Valuator had opportunity to make site visit if appropriate/necessary, and
questions answered to valuator’s satisfaction
Term through which valuation is effective is stated
Any comparables used not in position to refer
Definition and methodology used consistent with Stark definition of fair
market value
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On-Call Compensation Issues
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Cost (and the slippery slope)
Compliance with FMV
Maintaining equity among the
medical staff
Selecting from among various
payment methodologies
Administrative difficulties
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Prevalence of Compensated Call
Coverage Arrangements
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In a survey conducted by Sullivan &
Cotter, 46% (of 167 surveyed
healthcare organizations) reported
that compensation is provided for
on-call availability
Establishing the FMV of on-call
arrangements is HealthCare
Appraisers’ most requested type of
analysis
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Available On-Call Compensation
Payment Mechanisms
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Payment earmarked to defray professional
liability expense or hospital indemnification
for claims arising from emergent care
Payment for unfunded care
Per diem (typically a 24-hour period)
Per diem plus payment for unfunded care
“Activation fee”
Specialists’ Pool of Funds
Deferred compensation plan
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Pros/Cons of Various
Methods of Compensation Payment for Professional Liability Insurance
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Pros
• Relatively inexpensive
• Simple to administer
Cons
• Value to each physicians varies based
upon days of call coverage
• May be a short-term solution
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Pros/Cons of Various
Methods of Compensation Payment for Unfunded Care
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Pros
• Relatively inexpensive
• Equitable among the various on-call
physicians
• Directly addresses the complaint
regarding unfunded patients
Cons
• May be a short-term solution
• Requires claims adjudication (e.g.,
global coverage periods)
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Pros/Cons of Various
Methods of Compensation Per Diems
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Pros
• Easy to administer (unless
uncompensated care is included)
• The most prevalent form of
compensation
Cons
• Likely to be expensive; there is no
natural ceiling for per diem rates
(other than perhaps locum tenens
rates)
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Pros/Cons of Various
Methods of Compensation “Activation” fee
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Pros
• Easy to administer
• Directly addresses those days in which the
physician has to present to the ED
• Equitable among the various on-call
physicians
• Usually results in a cost savings to the
Hospital
Cons
• May not be viable if call frequency is active
• Physicians may ask for an “unrealistically
high” activation fee
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Specialist Compensation Pool for
Unfunded Care – One Example
• In addition to hospitalist program…
• A “pool” is set aside quarterly for surgical and
medical specialist unfunded emergent/follow
up care
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Pool based upon actual number of unfunded patients
times pre-determined per patient case rate
Case rate established annually by independent
valuation firm
Allocation for surgical and medical specialists in a
ratio subject to revision based upon actual claims
experience
Claims adjusted based upon (90) day determination
of unfunded status
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Specialist Compensation for
Unfunded Care (continued)
• All consultations based upon weighted average acuity
level as determined by independent third party valuation
firm
• Separate rates determined for initial consultation and
follow up consultations
• For surgical specialists, payment is based upon surgical
consultations not resulting in surgery
• For medical specialists, payment is based upon actual
number of initial and follow up consultations (max of 5
per patient)
• Targeted payment at a given percentage of Medicare
(e.g., 110%)
• If physicians also participate in other hospital funded
programs (e.g., funding of PLI) costs of such program
must be considered in determination that overall
compensation is consistent with FMV
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Deferred Compensation
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Relatively new concept
Physicians receive deferred
compensation subject to a vesting
provision (typically 5-7 years)
Hospital funding of the compensation
can be handled through various
means, including through the use of
life insurance policies
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Deferred Compensation
(continued)
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May be administratively difficult
Once in place, it’s difficult to modify
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Valuation Considerations
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Direct market data may be biased
and/or lack comparability
There is no OIG safe harbor for oncall compensation
A Cost Approach (i.e., hiring
physicians) is generally impractical
An Income Approach is not
applicable
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Factors Affecting the Value
of On-Call Services
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Frequency and nature of call events
Nature of the specialty
Compensation earned by such
specialists for clinical work
Number of physicians available to
participate in call rotation
Exposure to unfunded/underfunded
care
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Sources of Compensation Values
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Sullivan & Cotter and other published
surveys
Hospital and medical associations
Local, regional or national market
values
Independent appraiser
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