On September 27, 2007 the Office of Inspector General (OIG) of the Department of Health & Human Services published an advisory opinion which set forth guidelines for structuring physician on-call coverage arrangements. In approving an arrangement between a nonprofit hospital and members of its medical staff for payment for on-call physician services, the OIG looked at the hospital's demonstration of need for paying for on-call services, the scope of services to be provided by the physicians and outlined certain factors to consider in determining the fees. The OIG stated that while such arrangements potentially risk violating the Antikickback Statute, they can be structured to present only minimal risk. This alert outlines some of the key components of the OIG's analysis.

Community Need

The OIG noted that the hospital had documented that it was experiencing increasing difficulty in filling its on-call roster for services in the Emergency Department (ED). Due to a growing number of uninsured patients coming to its ED and an increase in malpractice insurance costs, the medical staff was, in some specialties, refusing to provide ED on-call services without compensation by the hospital.

Scope of Services

The on-call agreement required the physicians to: 1) participate in a call rotation to be divided as equally as possible between the members of each specialty; 2) continue to provide inpatient care to any patient admitted through the ED while that physician is on call; 3) respond in a timely fashion to calls from the ED; 4) cooperate with case and risk management personnel; and 5) document their services in a timely fashion in the medical record. The agreement also required each physician to provide 18 days of ED coverage gratis each year.

Calculating Per Diem Rates

In return for the services detailed above, each physician was paid a per diem rate consistent with fair market value, as determined by an independent consultant, and not based on the volume or value of referrals or other business generated between the parties. The OIG indicated that the following rate-calculating factors supported the determination of fair market value: 1) the severity of illness typically encountered by that specialty within the ED; 2) the likelihood of having to respond when on-call; 3) the likelihood of having to respond to a request for inpatient consultative services for an uninsured patient when on-call; and 4) the degree of inpatient care typically required of the specialty for patients who initially present at the ED. Also significant, per diem rates only varied based on whether call coverage fell on a weekday or a weekend.

The OIG also gave the following examples of various compensation structures that it believes are problematic: 1) "lost opportunity" payments that do not reflect bona fide lost income; 2) payment structures that compensate physicians when no identifiable services are provided; 3) aggregate on-call payment that are disproportionately high compared to the physician's regular medical practice income; or 4) "double-dipping" in the form of payments to on-call physicians for professional services for which he or she receives separate reimbursement from insurers or patients.


Hospitals who pay physicians for on-call services or who are considering such arrangements should carefully review how the fee payments are structured in light of the guidelines outlined by the OIG in approving such arrangements. To read the full text of the OIG's advisory opinion, click here.