Author: hortyspringer

March 29, 2018

Posted on by hortyspringer

QUESTION:        We saw somewhere in the news recently, maybe it was 60 Minutes, that some sort of non-disclosure agreement may not be valid because it doesn’t contain a signature.  We have all kinds of contracts that only have the signature of our CEO, not the other party.  Should we be worried?


ANSWER:            Were you watching the show during a dark and “stormy” night?  Anyway, if the hospital’s contracts have a “counterparts” provision, no worries at all!

A counterparts provision basically recognizes that, sometimes, all of the parties can’t be in the same room together, at the same time, and sign the agreement.  So, separate copies of the agreement are signed.  This usually occurs in large transactions with many multiple parties, but can occur even in smaller transactions.  In any event, none of the copies will have all of the signatures on them.  So, if the CEO signs his or her copy, and the other party signs its copy, the contract is valid.  If, say, the CEO wants to make sure the other party actually signed the agreement, the CEO could ask that party to send a copy of the signature page to the hospital.

A typical counterparts provision will state: “This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute a single Agreement.”

But, note that the absence of a counterpart provision may not in and of itself invalidate an agreement that the parties execute by separate counterparts.  However, it helps to prevent a party from claiming that an agreement is not binding because there is no single copy of it that is signed by all the parties.

* * * * *

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March 22, 2018

Posted on by hortyspringer

QUESTION:        A patient is asking the hospital staff to allow him to use medical marijuana that he obtained in compliance with state law.  Should we let him?

ANSWER:            This is a tough question especially in light of the recent, increased, legal acceptance on a state level of both medical and recreational marijuana.  The patient in the question is claiming that he obtained the medical marijuana in compliance with state law.  In such a situation, you should ask yourself a number of questions.  First, does your state law protect facilities or staff that permit medical marijuana use?  For example, Maine law states that hospitals and staff members will not be liable for facilitating the use of medical marijuana by certified, admitted patients, as long as the marijuana is not smoked or vaped.  Second, does your state law require a hospital to accommodate a patient’s use of medical marijuana?  Minnesota has a law on the books that says, in part, “no [health care] facility shall unreasonably limit a patient’s access to or use of medical cannabis to the extent that use is authorized by the patient.”

Even if the answer to these first two questions is “yes,” you have to ask yourself if you are willing to accept the legal risk under federal law.  Marijuana is a Schedule 1 controlled substance under the federal Controlled Substance Act.  Regardless of state laws to the contrary, it is still a violation of federal law to manufacture, possess or prescribe marijuana for either medical or recreational purposes.  The Medicare Conditions of Participation (“COPs”) for hospitals state “drugs and biologicals must be controlled and distributed in accordance with applicable standards of practice, consistent with Federal and State law.”  The COPs do not anticipate that Schedule 1 controlled substances will be stored or distributed in hospitals.  The applicable regulations and the Interpretive Guidelines to the COPs only refer to Schedule 2-5 substances.

Some hospitals have accepted the risk and permit patients to bring their own medical marijuana into the hospital for administration.  At least one of those hospitals has put the following safeguards in place:

  • Hospital staff (such as nurses and pharmacists) are not permitted to assist with dispensing or administering medical marijuana. The drug must be self-administered.
  • The hospital is required to verify that the patient is registered with the state’s medical marijuana program.
  • The hospital must provide a safe for the storage of medical marijuana in the patient’s room. Hospital employees do not access the safe or handle the medical marijuana at any time.
  • The medical marijuana must be in liquid or capsule form, and must have been provided by an in-state dispensary.

That being said, such safeguards do not protect you from CMS disapproval or sanctions.  Although it is a fascinating topic with numerous legal issues to consider, the fact is that marijuana continues to be a Schedule 1 drug under federal law.  Consequently, there is risk that CMS could take action based on the COPs.

March 15, 2018

Posted on by hortyspringer

QUESTION:        At one of our recent physician leadership courses, a registrant said that they were struggling with an applicant who refused to answer one of the questions on their application form, telling them that her lawyer told her it could violate a settlement agreement that she has with another hospital.  Their Medical Staff leaders think that information is relevant to her request for appointment and want to know if they can still ask for the information and hold the application incomplete?

ANSWER:            Yes!  Credentialers have a duty to review all of the relevant qualifications of each applicant for Medical Staff appointment and clinical privileges and cannot allow the legal interests of an applicant, in an unrelated matter, to interfere with that duty.  Accordingly, the Medical Staff Bylaws or Credentials Policy should state very clearly that every applicant bears the burden of submitting a complete application and of producing information deemed adequate by the hospital for a proper evaluation of current competence, character, ethics, and other qualifications and for resolving any doubts.

A similar issue arose in a 1997 case, Eyring v. East Tennessee Baptist Hospital, 950 S.W.2d 354 (Tenn. Ct. App. 1997), in which a physician applicant refused to sign a release form authorizing a hospital where he had previously practiced to send information to another hospital where he had made an application. The physician argued that he received legal advice that signing the release could compromise his lawsuit against the hospital, which had revoked his privileges. The court held that because the physician had not provided the additional information that the hospital requested, regardless of the fact that a settlement agreement was in place, he had not submitted a complete application and, thus, under its Bylaws, the hospital was not required to process his application further.

March 8, 2018

Posted on by hortyspringer

QUESTION:        We received a subpoena from an attorney requesting the medical records of a patient.  The attorney represents the plaintiff in the case, and the patient is the defendant.  We are not a party to the litigation and want to comply with the subpoena, but we don’t want to violate the Health Insurance Portability and Accountability Act (“HIPAA”) either.  Help!

ANSWER:            The regulations implementing HIPAA (the “HIPAA Privacy Rule”) require that certain conditions be satisfied before a covered entity, in this case a hospital, may disclose medical records in response to a subpoena.  Basically, these regulations require that a hospital receive “satisfactory assurances” that the patient has been notified of the subpoena and that any objections to the subpoena by the patient have been resolved.  Until the hospital receives these “satisfactory assurances,” it is prohibited by federal law from disclosing the medical records.

State law may also help here.  For example, the Pennsylvania Rules of Civil Procedure require a party in a lawsuit to serve a copy of a proposed subpoena on all other parties prior to issuing that subpoena to a third party (the hospital).  Also, the Rules state that a party that intends to serve a subpoena on a third party (the hospital) must file a certificate showing that it has notified other parties in the lawsuit of the subpoena.

So, as required by the HIPAA Privacy Rule, a hospital, or its attorney, should request that the individual who requested the medical records provide the hospital with documentation that indicates that the patient has received notice of the subpoena, has had an opportunity to object to it, and either no objections were filed or all objections have been resolved.  Once the hospital receives that documentation, it will be able to comply with the subpoena.

March 1, 2018

Posted on by hortyspringer

QUESTION:        We have a family physician who recently applied for colonoscopy clinical privileges at our hospital but is ineligible because he does not meet the threshold eligibility criteria for those privileges.  Our criteria require, among other things, all applicants to demonstrate competence through the performance of 140 colonoscopies in the last two years or during their training.  The physician is requesting that we change this criterion, claiming that it is too high and inconsistent with the American Academy of Family Physicians (“AAFP”) guidance on determining competency for colonoscopies.  What should we do?

ANSWER:            First, check your Medical Staff policies to determine how an applicant for clinical privileges who does not satisfy threshold eligibility criteria should be handled.  Medical Staff policies (typically, your Credentials Policy) should explicitly state that “applicants who fail to meet the threshold eligibility criteria will be notified that their applications will not be processed” and that “a determination of ineligibility does not entitle the individual to a hearing and appeal.” This applies to both applications for Medical Staff appointment and clinical privileges.  Thus, the family physician would be ineligible for a grant of clinical privileges to perform colonoscopies based on the hospital’s current threshold eligibility criteria.

However, in this case, there is a wrinkle since the physician is asking for a change in the criterion.  While you are under no obligation to change the criteria, especially if it is based on a thorough review of the literature, the needs of the community where the hospital is located, and is used in conjunction with other patient-safety-oriented criteria, it may be worth looking into the physician’s claims.  In this case, the physician is correct.  In a colonoscopy position paper, the AAFP states as follows:  “[b]ased upon recent studies, the AAFP has determined that the standard of fifty (50) cases as the primary operator be used as a basis for determination of basic competency in [colonoscopy].”  But, as the AAFP paper observes, the American Society for Gastrointestinal Endoscopy (“ASGE”) recommends that a physician perform 140 colonoscopies as a minimum number before competency can be assessed.  Obviously, this higher number favors specialists who perform colonoscopies as a primary part of their practice.  That doesn’t necessarily mean that the number isn’t legitimate.

The recommendations from the various specialty societies when it comes to the number of procedures needed to assess competency aren’t hard and fast rules.  As the ASGE notes:  “[p]erformance of an arbitrary number of procedures does not guarantee competency.  Whenever possible, competence should be determined by objective criteria and direct observation.  The number of supervised procedures necessary to obtain competency will vary tremendously among trainees.”  Of course, this statement from the ASGE implies that some trainees may need to perform more than 140 colonoscopies to guarantee competency (but the opposite may be true as well).  Whatever number your hospital decides on in setting criteria for clinical privileges should be supported by thorough research and sound reasoning.  At a minimum, you should explore what the relevant specialty societies are recommending, acceptable complication rates (and how to incorporate this into the criteria for the clinical privileges), and the type of training needed to support the request.  Other areas of consideration include what hospitals in similar situations require and the needs of the community.  Most importantly, if there is any doubt, criteria should set thresholds which err on the side of caution to protect patients and to ensure that only competent physicians are performing procedures on patients.

February 22, 2018

Posted on by hortyspringer

QUESTION:        Our hospital is looking for creative ways to reduce the on-call burden for our physicians.  We’d like to find more efficient ways to schedule and structure their time, but we don’t want to sacrifice quality.  We’ve heard that some organizations are moving toward community call.  Does CMS permit this?

ANSWER:             Yes, CMS does permit organizations to adopt so-called “community call” arrangements.  Community call plans can potentially reduce the on-call burden on physicians, can allow hospitals to provide specialty care in a more efficient and reasonable manner, can eliminate the need for duplicative coverage at nearby hospitals, and can increase access to limited resources throughout the region.

CMS permits hospitals to enter into community call plans so long as those plans meet certain defined criteria.  Among other things, the call plan must have a clear delineation of on-call coverage responsibilities (explaining when each participating hospital is responsible for on-call coverage).  It must include a description of the specific geographic area that the plan covers.  Local and regional EMS protocols should include information on the community call arrangements.  In addition, the plan must be annually assessed by each of the participating hospitals.

So long as these criteria (and a handful of others) are met, CMS will generally permit hospitals to engage in the community call arrangement.  CMS has not provided much detail beyond this on what an ideal model should look like — instead, the agency has given hospitals some room to be creative.

The difficulty comes in designing an effective community call plan that is agreeable to all of the participants.   There are a lot of details to consider and resolve.  For example, hospitals may have to reconcile different approaches on paying for call.  In addition, hospitals must be prepared to invest time, effort, money, and personnel in administrating and implementing the call plan.  In some states, the department of health may need to review and approve the call plan.  There are many other topics that should be considered and addressed as well.

February 15, 2018

Posted on by hortyspringer

QUESTION:        Our hospital is employing a lot more physicians than in the past.  When we receive a complaint about the behavior of one of these employed Medical Staff members, we’re not sure if we should review it through the Medical Staff process or through the employment process (i.e., HR policies or the employment agreement).  Or should we use both?

ANSWER:            We recommend that the Medical Staff Professionalism Policy (or Code of Conduct Policy) have a “triage” process.  If a behavioral concern is raised about a Hospital-employed physician, a Medical Staff leader (such as the Chief of Staff) will discuss the concern with a representative of the employer.  The Medical Staff leader and the employer representative then decide which process will be used to review the complaint.

If a decision is made to use the employment process, the Medical Staff process would be held in abeyance.  Critically, though, the employer would keep Medical Staff leaders continually informed of the status and outcome of the review.  If the Medical Staff leaders are unhappy with how the review is being conducted, they can commence their own review under the Professionalism Policy at any time.  On the other hand, if the Medical Staff leaders are satisfied with what the employer is doing, the Medical Staff leaders would essentially adopt that action as their own.  Thus, the Medical Staff is not “punting” or abdicating its responsibilities.  It’s evaluating the actions of the employer, then deciding to either adopt that action as its own or conduct a separate review.

There are several goals to this process.  The first is to avoid a duplication of effort by both the physician under review and those conducting the review.  The second is to use the most effective process to address the concern.  In some cases, the employer will have better tools for dealing with the issue, while in other cases the Medical Staff process will be more effective.  Finally, a triage process can help to avoid inconsistent results that send mixed messages to physicians and create legal risk.

For a more detailed discussion of peer review of hospital-employed physicians, join us in sunny Austin, Texas for The Peer Review Clinic on March 1-3, 2018.

February 8, 2018

Posted on by hortyspringer

QUESTION:        We heard that part of the tax reform law passed in December has a provision imposing an excise tax on tax-exempt organizations that have employees making more than $1,000,000 a year. A couple of our employed physicians fall in that category. Will they be subject to the tax?

ANSWER:            The 2017 tax reform law created new section 4960 of the Internal Revenue Code which will impose a 21% excise tax on compensation in excess of $1,000,000 paid by exempt organizations to their five highest compensated employees.  The tax is payable by the employer, not the employee.  It goes into effect in tax years beginning after December 31, 2017, so if you are on a calendar tax year, it applies to any compensation paid in 2018.  A last minute amendment to the bill exempted compensation paid to physicians, but it only applies to compensation for medical, not administrative, services.  Therefore, if your doctors earn all or most of their money from providing clinical services, the tax would not apply to their compensation.  However, even though compensation for medical services is not covered, it would be wise to review all existing physician compensation arrangements to make sure that medical and administrative compensation is separately accounted for, to avoid arguments later on as to whether the medical services exception applies.

To learn all about the new excise tax on excess compensation paid by exempt organizations, order the CD or MP3 file from the audio conference presented by Henry Casale and Dan Mulholland last month.  Click here to learn more.

 

February 1, 2018

Posted on by hortyspringer

QUESTION:        I saw in last week’s HLE’s Government at Work that the Department of Justice (“DOJ”) has recently issued a memorandum that discusses the dismissal of a qui tam case.  Can the government really do that?  Can you provide more information?

 

ANSWER:            Yes, the DOJ has the authority to dismiss a qui tam over the objection of the qui tam relator.  On January 10, 2018, the Director of the DOJ’s Commercial Litigation Branch, Fraud Section, issued a Memorandum to the attorneys in that branch of the DOJ entitled “Factors for Evaluating Dismissal Pursuant to 31 U.S.C. 3730(c)(2)(A)” that discusses when it is appropriate for DOJ attorneys to exercise this authority.

In this Memo, the DOJ recognized that while the number of qui tam cases that have been filed over the past several years has exceeded 600 new cases per year, the number of cases in which the DOJ has intervened has remained relatively the same.  The Memo notes that even in cases in which the DOJ declines to intervene, the DOJ expends considerable resources monitoring the case and in some instances must produce discovery or otherwise participate.  The DOJ is also concerned that qui tam cases that lack merit can generate adverse precedent which could hamstring the DOJ’s ability to enforce the False Claims Act.

Therefore, DOJ attorneys have been advised not only to determine whether to intervene in a qui tam case, but to go a step further and, if certain factors are present, to seek the dismissal of the qui tam claim under 31 U.S.C. §3730(c)(2)(A).

The Memo notes that, historically, the DOJ has seldom invoked this authority.  It also advised DOJ attorneys to be judicious in exercising this authority.  However, the Memo then outlines the factors that the DOJ should consider when deciding whether to dismiss a qui tam claim.  Those factors include qui tam claims that:  are meritless; duplicate pre-existing government investigations; threaten to interfere with agency policy or the administration of its programs; threaten the DOJ’s litigation prerogatives; involve intelligence agencies or military procurement; cause the government’s costs to exceed the expected recovery; or frustrate the government’s efforts to conduct a proper investigation.

The Memo states that the DOJ should consult closely with the affected agency as to whether dismissal is appropriate, advise the relator of the prospect of dismissal, and give the relator the opportunity to voluntarily dismiss the action.  However, if the qui tam relator does not voluntarily dismiss the action, then if any of the factors described in the Memo exist, the DOJ is to exercise its authority to dismiss the qui tam claim, which should be filed at or near the time that the DOJ declines to intervene in the qui tam case.

Click here if you want to see the entire Memo or, if you prefer, please join HortySpringer partners Henry Casale and Dan Mulholland who will be discussing this Memo and other late-breaking fraud and abuse and compliance developments at our Physician-Hospital Contracts Clinic in Austin on March 1-3, 2018.  Click here to learn more about it and register.

January 25, 2018

Posted on by hortyspringer

QUESTION:        Our Medical Staff Bylaws require current board certification in the area in which an individual wants to practice.  Does that mean that recertification and/or maintenance of certification is required?

ANSWER:            Board certification (and particularly recertification and maintenance of certification) have become very contentious issues in recent years.  Not a week goes by that we don’t hear about some controversy surrounding board certification (e.g., state laws prohibiting it as a factor to be considered for health plan participation, issues with applicants who want alternative boards to be accepted by the hospital and its medical staff).  Some argue that certification is an industry-acknowledged stamp of approval with respect to basic competence.  Others argue that recertification and maintenance of certification have become overly bureaucratic, money-making machines and no longer serve as an indicator of quality.  We cannot say who is right.  But, due to the level of contention surrounding this issue, we will repeat our oft-given advice:  be clear in the Bylaws, Credentials Policy, privileging forms and delineation documents, and other relevant policies.  Clarity puts everyone on the same page, lets practitioners know what to expect, and prevents disputes.

In your case, the word “current” has been added to the Bylaws language to clarify the requirements for board certification.  From a plain-language standpoint, the Bylaws cannot be read to require only past certification which has now lapsed – since that would make the word “current” superfluous. It is pretty clear that your Bylaws do, in fact, require that an individual’s board certification be kept up to date.  As you know, different boards require different things of different people in order for them to stay “current.”  Some lucky folks from days gone by were granted lifetime board certification and they will satisfy any requirements for “current” board certification for their entire careers.  Other individuals have time-limited certification and must either recertify, comply with maintenance of certification requirements, or both in order to remain “current.”  To ensure that there are no misunderstandings, if a hospital and its medical staff decide that recertification and maintenance of certification will be required, we recommend that the Bylaws language not only use terminology referring to “current” certification but also specifically note that recertification and maintenance of certification are required, if required by the applicable boards.

Further, because issues surrounding board certification continue to be contentious, we recommend that you consult with counsel when revising the Bylaws or privileging forms to address such issues and that you take care to address not just recertification and maintenance of certification, but also:

  • which boards are acceptable for meeting the requirements;
  • whether subspecialty certification is required;
  • whether it is required to be certified in only one specialty or subspecialty, in those cases where the practitioner seeks privileges in more than one specialty at the hospital; and
  • what happens if a practitioner fails to satisfy the relevant board certification, recertification, or maintenance of certification requirements (e.g., automatic relinquishment of privileges upon notice? ineligibility for reappointment?)