Automated Physician On-Call FMV Opinions

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One of the largest challenges facing both hospital emergency departments and inpatients who require emergent physician consultation is the availability of adequate on-call coverage.  As the need for on-call coverage compensation arrangements has increased over the years, hospitals continue to struggle with balancing the provision of medical services to their communities meanwhile adhering to compliance with federal law.  

As a result, the volume and complexity of on-call arrangements have grown, and hospitals are entering into such arrangements with uncertainty that the terms are financially sensible and/or compliant with federal laws.  Furthermore, the Office of the Inspector General of the Department of Health and Human Services (“OIG”) continues to scrutinize these arrangements more closely and as such, it is important that call coverage arrangements be structured appropriately and be compensated at a rate that is deemed to be consistent with fair market value (“FMV”). 

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Since compensation for call coverage arrangements is typically paid to physicians who are generally in a position to make referrals to the hospital, there is a risk of overpayment, which can give rise to costly Stark and/or anti-kickback violations.  As such, ensuring that payment to physicians for on-call coverage is consistent with FMV is of utmost importance.  Accordingly, our team at HealthCare Appraisers has developed the On-Call Calculator™, an efficient and cost-effective web-based valuation tool for physician on-call compensation arrangements, similar to our Physician Employment Calculator. 

Our On-Call CalculatorTM

First created in 2009 in response to our large health care system clients that were facing high volumes of on-call transactions, our On-Call Calculator™ is a powerful and efficient web-based healthcare valuation tool currently utilized by approximately 400 hospitals nationwide.  The flexibility of the tool allows clients to address both current and future on-call arrangements.

Since each on-call arrangement is unique, the use of published market survey data to establish a FMV range generally lacks sufficient accuracy and defensibility. Based on the same proprietary and complex scoring algorithm model as utilized by HealthCare Appraisers in our traditional written valuation analyses, the On-Call Calculator™ establishes FMV compensation for each specific on-call physician specialty/hospital combination. Our scoring algorithm incorporates hospital-specific market information, as well as specific characteristics/call variables.

The On-Call Calculator’s Scoring Algorithm Considers the Specific Characteristics/Call Variables Related to:
Specific Characteristics/Call Variables Considered
Call Panel Specialty Frequency of On-Call Events that would require the Physician's Immediate Presence at the Hospital
Hospital's Trauma Designation Emergency Department Payor Mix for Under/Unfunded Car
Number of Physicians Participating on the On-Call Panel Other Factors that may be Relevant to the Valuation
Frequency of On-Call Events that can be Handled Remotely  

The model is subject to annual review and is frequently updated to adjust for changes in annual physician compensation survey data and any other pertinent market factors that might affect the FMV of on-call compensation. Generally, the results of the On-Call Calculator are valid for up to two years, with the allowance for transactions to be re-analyzed with nominal changes made to the agreement and without the need to re-enter all of the data.

Consistency with OIG Advisory Opinions

The On-Call Calculator specifically considers those factors that are pertinent to the establishment of the FMV of a compensated call coverage arrangement, including those identified by the OIG in its Advisory Opinions No. 07-10 (Sept. 27, 2007), 09-05 (May 21, 2009), and 12-15 (Oct. 30, 2012).

In accordance with this this Opinion, the On-Call Calculator™ does not give consideration to the volume or value of any patient referrals, nor does it rely on market comparables. Rather, it provides an objective third-party opinion of FMV by giving consideration not only to the guidance provided by the OIG, but also to HealthCare Appraisers’ extensive valuation experience with on-call arrangements.

Benefits of Using our On-Call Calculator

  • Efficiency – The On-Call Calculator is a user-friendly, web-based interface that readily provides real-time FMV results;
  • Experience – Rather than relying upon self-reported, direct market data, the On-Call Calculator utilizes a sophisticated decision model based upon over a decade of expertise;
  • Relevance – The model captures and analyzes the specific characteristics of the subject on-call arrangement (including those identified by the OIG Advisory Opinions No. 07-10, 09-05, and 12-15);
  • Consistency – The model produces consistent and objective FMV outcomes for all pertinent physician specialties.
  • Simplicity - The On-Call Calculator features drop-down menus and embedded formulas which is easy-to-use and readily determines whether a negotiated compensation rate falls within or outside of FMV. The result can be printed and/or transmitted to a designated email address.

Like the Physician Employment Calculator, the On-Call Calculator features customizable drop-down menus.  Underlying the On-Call Calculator is a valuation report that fully describes the inputs and methodology used to establish defensible FMV ranges for each on-call arrangement, including consideration of the factors described in the OIG Advisory Opinions described above.

What if the Result is Outside of FMV?

While the On-Call Calculator yields a FMV range that can assist the client in determining whether negotiated on-call compensation rates are supportable, the model does not always present the highest supportable FMV rate that might be determined via the process of a full appraisal.  Should the results of the model not support a proposed arrangement, HealthCare Appraisers is available to provide a secondary analysis that allows for a more in-depth review of the specific facts and circumstances of the proposed arrangement. The results of the secondary analysis are documented in our Summary Addendum format, which is a short-form report paired with a master report describing the methodology utilized behind our call coverage approach.

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Since our founding in 2000 and having produced thousands of time-tested FMV physician call coverage opinions, HealthCare Appraisers has been at the forefront of the healthcare valuation industry.  The On-Call Calculator is the next step in innovation when it comes to providing fast, cost effective, compliant FMV opinions for physician call coverage arrangements.  

Don't wait any longer, contact us today to schedule your free demo with the FMV experts at HealthCare Appraisers.

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