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Compensating Residents and Fellows for On-Call Coverage:  How to Avoid Potential FMV Pitfalls

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Compensating Residents and Fellows for On-Call Coverage:  How to Avoid Potential FMV Pitfalls

Author: Keith Stenhouse, MHA | Published: 03/19/2019

Compensating residents and fellows for on-call coverageWithin the national healthcare marketplace, there continues to be a looming physician shortage[1] which threatens patient access to care, and leaves hospitals to grapple with obstacles in meeting emergency department call panel requirements.  There is a growing trend to utilize physicians in-training, i.e., residents and fellows, to provide the necessary on-call coverage for their employing hospital or healthcare facility.  If the residency program is sponsored by the Accreditation Council for Graduate Medical Education (ACGME)[2], these on-call services are likely taking place outside of the residents’ professional duties required in conjunction with their employment pursuant to program requirements, i.e., moonlighting.[3]  From the hospital’s vantage point, utilizing physicians in-training presents an advantageous solution as it likely provides a lower-cost alternative when compared to retaining locum tenens providers, and reduces the burden of other medical staff physicians on the call panel.  From a non-monetary perspective, moonlighting opportunities (for residents) as well as the provision of on-call services occurring over and above a physician fellow’s employment duties[4] are beneficial from a training-perspective as it augments the new physicians’ clinical exposure to more nuanced cases than perhaps during the normal training schedule.  However, when it comes to determining appropriate compensation for residents and fellows providing on-call coverage, the appropriate compensation methodology may differ from the compensation methodologies which may have been used to determine on-call compensation for established physicians.

To determine applicable compensation for a physician in-training, a hospital may be inclined to simply select the low end of a previously provided fair market value (“FMV”) range determined for another employed physician who has completed his or her residency or fellowship training.  However, there may be dangers in this approach as one may be compensating that physician in-training at an amount or in a manner that exceeds FMV.  For example, if the resident has only completed the first year of residency, regardless of the call panel specialty, it may not be reasonable to compensate such physician utilizing compensation data applicable to any medical specialty other than primary care (i.e., the only level of training the physician is likely proficient in).

FMV Pitfall
When determining the FMV of compensation for residents and fellows who provide on-call coverage, consideration should be given to their achieved level of training and the corresponding scope of their clinical capabilities.

[1]
See, e.g., New Research Shows Increasing Physician Shortages in Both Primary and Specialty Care (April 11, 2018), https://news.aamc.org/press-releases/article/workforce_report_shortage_04112018/.
[2] We note that by 2020 all residency programs (i.e., both DO and MD) will transition to a single accreditation system for graduate medical training under the ACGME.  See https://osteopathic.org/residents/resident-resources/residents-single-gme/single-gme-resident-faqs/.
[3] We note that per the ACGME requirement, every accredited residency program must “adhere to [a] 80-hour maximum weekly limit” in which the resident may work.  See https://www.acgme.org/What-We-Do/Accreditation/Common-Program-Requirements/Summary-of-Proposed-Changes-to-ACGME-Common-Program-Requirements-Section-VI.  We furthermore note that call services, whether provided in-house or offsite (i.e., from home), is included in each resident’s clinical 80-hour weekly limit.  See https://www.acgme.org/Portals/0/PDFs/FAQ/CommonProgramRequirementsFAQs.pdf.
[4] i.e., in order to avoid any duplication of payment for services provided under the respective employment arrangement.