Recent governmental actions have further clouded the legal landscape for hospitals dealing with medical staff members who refuse to take call or demand pay for it. A brief summary of this recurring problem, and the legal issues bearing on a hospital’s options are below.
Bylaws.
The first issue is whether the hospital has a requirement in its medical staff bylaws that physician staff members take call. The specifics and details can be spelled out in regulations or policies, but the bylaws themselves must contain a mandate to be enforceable. At the practical level, however, the only enforcement mechanism for violation of staff bylaws is a threat to take action on privileges (or actually taking such action). For most hospitals, this is not a practical or viable option, if the physicians at issue are critical.
Anti-Kickback and Stark Issues.
There have been concerns as to whether hospitals could pay for call under the anti-kickback or Stark statutes. In a recent advisory opinion, the Office of Inspector General (OIG) found that a hospital’s payments to physicians for emergency department call coverage were permissible under the anti-kickback statute. Contrary to the view of some physicians, the OIG opinion does not remove all fraud and Stark issues. First, the OIG opinion does not (and cannot) assess compliance with Stark requirements. An applicable Stark exception must be independently met (such as fair market value/physician services contracts) for call payments to be lawful. Second, the opinion applies only to the requestor. Third, the decision stressed the safeguards created by the requesting institution. Those safeguards included proof of a shortage, imposition of various physician obligations (e.g., to provide inpatient care regardless of patient ability to pay, collaboration with the hospital’s patient care, risk and performance management teams) and the use of an outside valuator to confirm that the payments were at fair market value. In addition, the OIG cautioned that such arrangements create considerable fraud and abuse risks, as physicians may, as a condition of doing business with a hospital, demand payment for call coverage when the services provided and market forces do not justify such payment. The Stark and anti-kickback laws are not a basis for telling physicians that call payment is prohibited, but they do provide a basis for resisting extreme or unjustifiable demands, and for proceeding with care.
Antitrust Concerns.
Antitrust laws restrict both hospitals and physicians. The principal restriction in this setting is the general prohibition on “joint action,” a restriction emphasized in some recent government enforcement action. Physicians who are not already members of a single group cannot, under antitrust laws, negotiate jointly with the hospital or make joint demands on the hospital regarding call coverage. This can be an important leverage point, and was the basis of the rather remarkable lawsuit by CAMC against its cardio-thoracic surgeons. In that case, the entire department made a joint demand for call pay. The department was largely a single surgical group but included two non-members. The group practice could have negotiated call coverage fees for the entire group. A group practice cannot join with other groups or with individual physicians in demanding or negotiating payment terms.
The prohibition on joint action also applies to hospitals. It would generally be prohibited for neighboring hospitals (or for any hospital group) to confer about or to devise a common strategy in dealing with call coverage payment demands, with the sole exception of legislative or regulatory efforts, directed at such demands. (Coordination as to call schedules for physicians, because it does not involve payment, is permissible.)
Summary.
The approval of the OIG of one hospital’s call pay arrangement weakens other hospitals’ ability to resist demands for call pay, and yet leaves less than clear the contours of permissible arrangements. Simultaneously, the Justice Department and FTC continue to be vigorous in antitrust enforcement as to any joint action by health care entities. This may help in instances where physicians disregard the rules, but also mandates some care in the way the hospital resists demands.
