Financial Implications for Physicians Accepting Higher Level of Care Transfers

Mark I. Langdorf, MD, MHPE; Sharon Lee, MD; Michael D. Menchine, MD, MPH


Western J Emerg Med. 2013;14(3):227-232. 

In This Article

Abstract and Introduction


Introduction: Higher-level-of-care (HLOC) transfers to tertiary care hospitals are common. While this has been shown profitable for hospitals, the impact on physicians has not been described. Community medical center call panels continue to erode, in part due to the perception that patients needing transfer are underinsured. Surveys show that the problematic specialties to maintain call panels in community hospitals are neurosurgery, otolaryngology, plastic surgery, orthopedics and ophthalmology. This places greater stress on tertiary care hospitals' physicians. The objective of this study is to describe the financial consequences to physicians who care for HLOC transfers across specialties and compare these with all patients from each specialty and specialty-specific national reimbursement benchmarks.

Methods: Financial data were obtained for all HLOC transfers to a single tertiary care center from January 2007 through March 2008. Work relative value unit (RVU) and reimbursement were taken from a centralized professional fee billing office. National benchmarks for reimbursement per RVU were calculated from the 2006 Medical Group Management Association (MGMA) Compensation and Production Survey.

Results: In this period 570 patients were transferred, 319 (55.9%) through the emergency department (ED). Reimbursement per RVU varied from a high of $74.93 for neurosurgery to $25.91 for family medicine. Reimbursement to emergency medicine (EM) for HLOC patients was 16% above the average reimbursement per RVU for all ED patients ($50.5 vs. $43.7). Similarly, neurosurgery reimbursement per RVU was 22% above the reimbursement per RVU for all patients ($74.93 vs. $61.27). The remainder of specialties was reimbursed less ($25.91 vs $69.60) per RVU for HLOC patients than for all of their patients at this center. All specialties at this site were reimbursed less for each HLOC patient than national average reimbursement for all patients in each specialty.

Conclusion: Average professional fee reimbursement for HLOC patients was higher for EM and neurosurgery than for all other patients in these specialties at this site, but lower for the rest of the specialties. Compared to the national benchmarks, this site had an overall lower reimbursement per RVU for all specialties, reflecting a poorer patient mix. At this site HLOC transfers patients are financially advantageous for EM and neurosurgery.


The federal Emergency Medical Treatment and Active Labor Act (EMTALA) mandates that all patients presenting to an emergency department (ED) must have a medical screening evaluation, and that emergent conditions must be treated within the capacity of the ED and hospital, regardless of ability to pay. If a patient's emergency medical condition cannot be stabilized, often due to lack of specialist availability, then the patient may be transferred to another ED for higher level of care (HLOC). Conversely, hospitals with tertiary care capacity, often academic institutions, must accept these patients. Failure to comply with EMTALA carries civil fines and suspension from Medicare reimbursement.

Community hospitals have increasing problems maintaining specialist panels for their EDs.[1,2] The cause is multifactorial, including erosion of the willingness of specialists to take ED call. This in turn is fueled by the perception that ED patients carry greater liability risk, and that specialists receive inadequate reimbursement from these patients or their often-underfunded insurance. The availability of on-call specialists to EDs has received attention from the media in recent years. The New York Times in 2004 stated "fewer and fewer doctors are willing to be on call to ERs given the high insurance premiums they must pay and, in many cases, the lack of reimbursement for treating the uninsured."[3] The Institute of Medicine in 2007 concluded that the lack of on-call specialist availability was "one of the most troubling trends" in emergency care.[4]

The American College of Emergency Physicians (ACEP) surveyed 442 national ED directors in 2008, and 74% reported on-call specialist coverage problems,[5] with the most problematic specialties of neurosurgery, plastic surgery, hand surgery, and orthopedics. A similar survey by the California chapter of ACEP found that 80% of ED physicians reported that on-call physicians were less willing to see underinsured or uninsured ED patients. Plastic surgery, head and neck surgery, neurosurgery, ophthalmology, and orthopedics, in that order, were the most problematic specialties for emergency physicians (EP) to obtain an admitting physician or secure follow-up care.[1]

A 2006 survey of 243 California ED directors found that rural EDs have the greatest problems obtaining specialty care.[6] They reported long delays for transfer to HLOC. Interestingly, specialist physician availability in community hospitals was not found to be associated with the payer mix of the ED patients.

HLOC transfers to tertiary hospitals are common. A previous study performed at the same academic health center as this paper, showed that transfers for HLOC resulted in a net financial gain to the hospital, although reimbursement varied dramatically by insurance type.[7] State (Medicaid) and county insurance reimbursements resulted in net losses to the hospital, comparable to the completely uninsured. Conversely, these losses were more than compensated for by reimbursement from private insurance carriers. For this same group of patients, the hospital realized a net profit of reimbursement over cost of $2,586,200.

The purpose of this study is to estimate the financial consequences to physicians who care for HLOC transfers. We specifically describe professional reimbursement, by specialty, and compare with all patients from each specialty during the same time period. Finally, we compare HLOC patients to specialty-specific national reimbursement benchmarks.