How to Mitigate Stacking Risks

Physician overpayments and compliance risks are often clear and easy to identify. Many of these pitfalls can be avoided by by determining fair market value or establishing rigorous compliance procedures. However, some overpayments are harder to spot–particularly when agreements are “stacked.” Stacking is where physician agreements that would be reasonable when considered individually are unreasonable in aggregate.

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One of the best ways to understand how federal regulators view these risks is found in the OIG Advisory Opinion No. 07-10.

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The OIG identifies the following situations as problematic compensation structures:

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1. Payment for lost opportunity cost that do not reflect bona fide lost income
2. Payment when no identifiable services are provided
3. Aggregate on-call payments that are disproportionately high compared to the physician’s regular medical practice income
4. Payment resulting in the physician essentially being paid twice for the same service

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Many of the situations noted by the OIG above can be referred to as “stacking.” Stacking commonly occurs in two ways:

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1. A physician or physician group has 2+ agreements with a hospital for coverage or medical direction services. When this happens, it is possible for the physician to coordinate his or her time to fulfill both responsibilities within a timeframe understood as required to fulfill each agreement separately. When considered independently, the agreements may appear compliant–however, when taken together, payment may be greater than the 90th percentile or the time commitment may require an unreasonable amount of hours.
2. An on-call payment rate is based on an estimated “opportunity cost” of lost private practice income, but the physician does not actually suffer losses.

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How should hospitals identify and prevent stacked physician arrangements? Here are a few tips:

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1. Develop a policy regarding physicians who hold more than one position or perform more than one service. If physicians are holding two call positions at the same time, set guidelines for how much they can be paid or an aggregate payment cap from all sources.
2. Ask physicians to document the time they spend in each role. Time tracking should be a standard process for all physician administrative positions.
3. Be careful with restricted call payments. Ask the physician to sign a statement to certify that his or her private practice cannot be rearranged to avoid lost income. Monitor physicians’ OR utilization to compare elective volume with and without on-call coverage.
4. Don’t pay a physician to take call for two services at the same time.