3 Major Trends of Call Coverage, Medical Direction

Payments for physician call coverage and medical direction from hospitals have increased over the past few years, as hospitals are facing mounting pressures to enhance their physician base.

Call coverage, leadership services and other physician services contracted by hospitals all require different compensation structures, and they have been growing and changing as the industry struggles to address the challenges of healthcare reform.

Penny Stroud, CEO of MD Ranger, discusses the trends in these three major categories from the firm's third annual physician contract benchmark report, which used unique data from more than 5,000 physician contracts from more than 220 hospitals.

1. Call coverage. Most call coverage and medical direction payments to physicians did not change much between 2010 and 2011, but those that did change rose dramatically. For emergency call coverage, Ms. Stroud says new contracts spiked by an average of 8.8 percent — more than double the prior year's increase.

The biggest factor impacting payments rates is the trauma status of a hospital, which Ms. Stroud says is not surprising. Trauma hospitals have more stringent coverage requirements and typically have higher volume and a poorer payor mix. In addition, many specialties require onsite coverage, which is also associated with higher rates. Trauma hospitals usually pay a 22 percent premium for coverage, and restricted call garners an even higher premium at 40 percent.

"Trauma continues to outpace every other factor as a driver of costs," Ms. Stroud says. "And that relates both to the number of contracts from hospitals as well as the cost of those contracts. However, non-trauma hospitals are also facing heavy pressure to pay for call."

2. Medical directorships and administrative/leadership services. Physicians have increasingly taken on new roles within the hospital, and both medical directorships and other initiatives such as quality, electronic health records and readmission reduction programs have been at the forefront.

Last year, Ms. Stroud says MD Ranger benchmarks increased modestly for medical directorship contracts. Roughly 13 percent of medical director contracts had rate increases, while 10 percent had rate decreases. "We've seen medical director contract rates, on an annual basis, trend up, but at a lower pace than last year," Ms. Stroud says. "In 2010, contracts with a change increased 4 percent, while in 2011 the average increase for contracts with a rate changes was only 1.6 percent."

Ms. Stroud says there were some other, more specific findings on medical directorship and administrative contracts. For example, hospital heart center directorships are the highest-paid, non-hospital-based specialty. Administrative contracts in surgical specialties have the highest hourly rates at a median of $200 per hour compared with $150 an hour for other specialties.

Neonatology rates are the lowest among hospital-based services.3. Hospital-based physician contracts. One of the more unique aspects of MD Ranger's physician compensation contract report is the comprehensive report on nine hospital-based services. These specialties are often paid comprehensive stipends that include coverage, medical direction, administrative services and payment for uncompensated care. They represent some of the highest physician expenses for hospitals, and they are generally paid to a single specialty medical group with exclusive privileges for the service.

For example, the mean annual payment for hospital-based physician contracts in anesthesia, excluding medical directorships, was around $953,000 last year, Ms. Stroud says. There is a very broad range of payments for these hospital-based services — neonatology has a low mean of $144,000, and pathology is around $298,000 per year. "Anesthesia, hospitalist and intensivist services typically command the highest stipends," Ms. Stroud says. "For many hospitals, these contracts are a very heavy burden. Anesthesia and hospitalists are the most expensive services; however, payment rates vary dramatically and often depend on hospital size, location and payor mix."

The 2012 MD Ranger report also includes benchmarks for administrative and other services, such as chief of staff, electrocardiography reads and uncompensated care.

More Articles on Physician Call Pay:

13 Statistics on Daily Stipends and On-Call Physician Compensation

Physician Call Compensation Rates: 11 Determining Factors

Hospitals Pursuing New Strategies for Physician Call Pay

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