Emergency Room Physician Standby

Denis Houle, Healthcare Consulting Senior Manager
September 2015

During the on-going desk reviews and audits of Medicare cost reports, CMS has recently intensified the review of emergency room standby costs. This increased scrutiny has led to additional documentation requests. To ensure you are prepared, the following items should be considered.

PRM-1 ยง 2109.3 explains that emergency department physician availability services costs will be allowable only in special circumstances, as follows:

A. No Feasible Alternative Way to Obtain Physician Coverage is Available

In order for physician availability services costs to be allowable, the provider must demonstrate that it explored alternative methods for obtaining physician coverage but was unable to do so. An alternative might include negotiating a straight fee-for-service arrangement. Evidence of such an effort could consist of advertisements for emergency physicians, to be compensated on a fee-for-service basis, placed in appropriate professional publications. It is not necessary for a provider to demonstrate that it explored alternative methods for obtaining emergency physician coverage annually. The requirement is applicable prior to the renegotiation of expiring arrangements or the initiation of new arrangements for physician coverage of the emergency department.

B. Physicians Provide Immediate Response to Life-Threatening Emergencies

The physician must be on the hospital premises in reasonable proximity to the emergency department. The physician cannot be “on call.”

C. Documentation

A claim for Part B hospital costs or Part A and Part B hospital costs must be supported by the following data maintained by the hospital:

  1. A signed copy of the contract between the hospital and the physician(s).
  2. A written copy of the allocation agreement and supporting data depicting the distribution of the physician’s time between services to the provider, services to individual patients and services not reimbursable under Medicare.
  3. A permanent record of payments made to the physician(s) under the agreement.
  4. A record of the amount of time the physician was physically present on the hospital premises to attend to emergency patients.
  5. A permanent record of all patients (Medicare and non-Medicare) treated by the physician, copies of all physician bills generated for such services and a record of imputed charges for services for which no billing was made by the hospital or physician.
  6. A schedule of physician charges.
  7. Evidence that the provider explored alternative methods for obtaining emergency physician coverage before agreeing to physician compensation for availability services.

Critical access hospitals should periodically review these criteria to ensure proper documentation is maintained to support the allowability of the emergency room physician standby costs.

Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.