Basing Call Pay on Hospital Margin

April 1, 2009

We are negotiating a pay-for-call program with our hospital. The CEO has proposed a deferred compensation plan. We’ll get paid a daily rate based on the hospital’s operating margin. The better the hospital does, the more we make. Is this legal? I worry about Stark.

Question: We are negotiating a pay-for-call program with our hospital. The CEO has proposed a deferred compensation plan. We’ll get paid a daily rate based on the hospital’s operating margin. The better the hospital does, the more we make. Is this legal? I worry about Stark.

Answer: Given the intricacies of Stark and the state-based nature of many antikickback precedents, I have to say you need to speak to a lawyer.

The hospital presumably has a lawyer, and though acting in the hospital’s interest, he or she could surely address with you the ways in which this does, in their eyes, skirt the legalities.

If I were you, I’d also raise the broader concern that you can’t control the hospital’s margin. If the CEO decides to buy a jet, your compensation is impacted, which doesn’t seem fair. Or, more prosaically, if the economy continues to send the un- and underinsured to ERs in droves or if staff at the hospital are poorly managed, you don’t get paid or get paid less. I’m not sure why you should be at risk for services rendered.