Healthcare Business News

HHS backs flat-rate payment arrangements

By Joe Carlson
Posted: October 30, 2012 - 2:15 pm ET

In a favorable advisory opinion, HHS' inspector general's office has blessed a tricky type of compensation arrangement that is becoming more popular among hospitals: paying specialty physicians flat rates to cover on-call shifts in emergency departments.

More hospitals have begun paying specialists such as cardiologists, neurosurgeons and urologists flat, “per diem” rates for on-call emergency-room services above what the doctors receive from insurers for providing the care because the jobs can be tough for some hospitals to fill without paying extra.

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Attorneys with inspector general's office say the arrangements can also be an easy vehicle for illegal payments that could induce doctors to generate referral business for hospitals or to selectively “reward” doctors with high volumes of referrals, both of which would violate the Anti-Kickback Statute.

The advisory opinion released Tuesday says one not-for-profit community hospital avoided those risks by doing several things. First, the hospital got an independent valuation of its proposed arrangements to ensure that the payments—which go to the doctors regardless of whether they're called in to work on any particular on-call shift—are set at market rates to reflect the burden on the doctors, rather than an abnormally high rate.

The rates are also set in advance of the work being performed, so that there's little risk that the money would be doled out to reward doctors with favorable referral patterns, and the opportunity to work on-call is offered to all specialists on the hospital staff. Finally, the money is being paid in return for actual and necessary services, since the doctors must be able to respond within 30 minutes of a call, and must agree to see the patient for initial follow-up care regardless of their ability to pay.

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