Author: hortyspringer

September 8, 2016

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QUESTION:         An HMO that our hospital is negotiating a contract with is insisting on language that would require all of our board members and employees to receive specific “fraud, waste and abuse” training applicable to Medicare Parts C and D. Do we have to agree to this?

ANSWER:            Not if you are a hospital. Federal regulations at 42 C.F.R. §§422.503 and 423.504 specify the requirements for Medicare Advantage Organizations and Prescription Drug Plan Sponsors to implement an effective compliance program. This includes a requirement that so-called “first tier, downstream and related entities” (“FDRs”) satisfy general compliance program training requirements, as well as fraud, waste, and abuse training.

However, FDRs enrolled in Medicare Part A or B (like hospitals) or accredited as suppliers of DMEPOS are exempt from FWA training and education certification requirements, but not the general compliance training requirement.

For more information, see the CMS website, at https://www.cms.gov/Medicare/Compliance-and-Audits/Part-C-and-Part-D-Compliance-and-Audits/ComplianceProgramPolicyandGuidance.html

September 1, 2016

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QUESTION:         We have several clinical departments that have either weak chairs or chairs who are there entirely by “default.” These individuals are relied upon to perform a really important role. How can we get stronger leaders interested?

ANSWER:             In many hospitals, it has been traditional to rotate the department chairmanship so that everyone gets his or her turn. However, not every physician, quite frankly, has an aptitude for, or interest in, medical staff leadership. One answer might be to develop stronger qualifications for serving in medical staff leadership roles, including officers and departmental chairs, and to provide for compensation for department chairs. Another question to ask is if there are too many departments. Consider consolidating departments. By having fewer positions to fill, you then have a larger pool of qualified people who want to serve.

That said, one of the biggest changes that we have seen in medical staff leadership in the recent past (and one which we now recommend strongly!) is to eliminate the use of “ad hoc” nomination committees for identifying medical staff leaders – whether they be officers, department chairs, or committee chairs – and the movement toward a standing committee dedicated to leadership development and succession planning that meets throughout the year.  Having a standing committee in place allows the leadership to take a more comprehensive look at the medical staff, identifying new members who might make good leaders in the future – giving them time for training, education, and development.

August 25, 2016

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QUESTION:        A department chair instructed our Medical Staff office to provide an application to someone who was formerly on our staff but who has not practiced in a hospital setting for several years.  The application contained no recent peer references. This applicant was persistent, and has now asked for temporary privileges.  What should we do?

ANSWER:            This application is incomplete!  So, temporary privileges cannot be provided!  (Many applicants do not recognize this.) Hospitals are required to verify from primary sources information regarding every applicant’s education, training, practice history and current competence for all privileges requested.  These requirements are found in accreditation standards, the Medicare Conditions of Participation and, in many states, hospital licensing requirements.

The courts in most states have adopted the doctrine of negligent credentialing/hospital corporate negligence.  Hospitals must, in order to meet the standard of care in credentialing, obtain relevant information related to an applicant’s satisfaction of all qualifications. You must confirm practice history following the applicant’s tenure on your staff, as well as current competence.

Every applicant has the burden of demonstrating satisfaction of all qualifications and of resolving any doubts.  Incomplete applications cannot be processed.  (If you don’t have language to this effect in your Bylaws or Credentialing Policy, add it soon!)  So you should write a letter stating that the application is incomplete and that it cannot be processed unless and until complete information is provided and verified, demonstrating current competence for all privileges requested.  If your bylaws have a time frame for the provision of this information or else the application is deemed to be withdrawn, add that as well. (No NPDB report is required for withdrawal of an incomplete application.)  Assume that this letter is aimed at multiple audiences, so it makes sense to provide some education about accreditation, regulatory and legal standards.

And — finally — it would make sense to have a process whereby applications are provided only by the Medical Staff Office in response to a written request, and then on authorization of the Medical Staff professional and the CMO/VPMA.  That way, if an applicant pressures a department chair, the chair can state that the standard process requires a written request to the Medical Staff Office. (The once-common practice of using a pre-application eligibility questionnaire has declined for many reasons, but every application should be scrutinized for eligibility before it is processed.)

August 18, 2016

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QUESTION:          Our hospital wants to enter into an exclusive contract and we were told that it should include an “incident to and coterminous” provision.  What is it and why should we include it?

ANSWER:             The provision basically states that the appointment and clinical privileges of the physicians who provide services under the exclusive contract are “incident to and coterminous” with the contract.  What this means is that if the contract is terminated or not renewed, the appointment and clinical privileges of the physicians in the physician group that was awarded the contract automatically expire.  The same holds true if a physician leaves the group that was awarded the contract – the appointment and clinical privileges of that particular physician automatically expire.  Also, this provision states that the physicians have no right to the hearing procedures in the medical staff bylaws or credentials policy.

The rationale for this provision is that in order for an exclusive contract to be legally valid under the antitrust laws (as well as the laws pertaining to tax-exempt hospitals, if hospital facilities have been financed through tax-exempt bonds), the hospital needs to be able to demonstrate that the contract is pro-competitive.  In order for a contract to be considered pro-competitive, the hospital must have the ability to replace the group under contract with a new group if referring physicians and hospital management become dissatisfied with the quality of services, timeliness of reports, etc.

As for having no right to hearing procedures, the due process provisions in the bylaws or credentials policy are intended to handle situations that are different from those involving business questions or a situation when a physician leaves a group that was awarded an exclusive contract.  The due process provisions handle situations where the physician’s professional conduct or professional competence is the basis for an adverse action that is reportable to the National Practitioner Data Bank – not when a hospital decides to terminate or not renew an exclusive contract, or when a physician leaves the physician group that was awarded the contract.

August 11, 2016

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QUESTION:          Does the Health Insurance Portability and Accountability Act (“HIPAA”) Privacy Rule protect individually identifiable health information of deceased individuals?

ANSWER:              Yes, for a certain period of time.  The Privacy Rule protects a deceased’s individually identifiable health information for 50 years following the date of death of the individual.  It does this by specifically excluding from the definition of “protected health information” individually identifiable health information of an individual who has been deceased for over 50 years (45 C.F.R. §160.103).

As the U.S. Department of Health & Human Services (“HHS”) explains on its website “This period of protection for decedent health information balances the privacy interests of surviving relatives and other individuals with a relationship to the decedent, with the need for archivists, biographers, historians, and others to access old or ancient records on deceased individuals for historical purposes.”

July 28, 2016

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QUESTION:        What’s the current timetable for the proposed changes in physician reimbursement required by MACRA?

ANSWER:            No one is really sure yet, but right now it is supposed to go into effect on January 1, 2017. The Medicare Access & CHIP Reauthorization Act of 2015 (“MACRA”) was signed by the President on April 16, 2015.  CMS issued proposed regulations on April 27, 2016. According to CMS, MACRA makes three important changes to how Medicare pays physicians:

  • Ends the Sustainable Growth Rate (“SGR”) formula for determining Medicare payments.
  • Establishes a new framework for rewarding health care providers for giving better care, not just more care.
  • Combines existing quality reporting programs into one new system.

Final rules are expected by November, but there is a lot of talk that they might be delayed.  During a July 13 U.S. Senate Committee on Finance hearing on MACRA, CMS Acting Administrator, Andy Slavitt, left open the possibility that it could be pushed back from the intended start date of January 1, 2017.

Once MACRA does go into effect, physicians will have to choose between two different reimbursement models:  the Merit-based Incentive Payment System (“MIPS”) – the default system – or the Quality Payment Program (“QPP”), which requires participation in an Alternative Payment Model (“APM”).  Depending on which program is selected and how the physician performs, Medicare reimbursement can go up or down by a significant amount.  CMS has published a handy timeline to show how this will play out over the next several years.

The details of MACRA are far too intricate to describe in this short piece.  Suffice to say that it will radically change how physicians practice, whether they are on their own, in an independent group or employed by a hospital or health system.

If you want to know more about MACRA, come to Horty Springer’s Physician-Hospital Contracts Clinic in Las Vegas on October 13-15, 2016.  We’ll be discussing how MACRA will work and what you might want to consider changing with respect to physician employment contracts and compensation models, and how MACRA will change the relationship between physicians and hospitals in the future.  Click here to register.

July 21, 2016

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QUESTION:        We have an applicant for appointment and clinical privileges who seems to have an unusual number of malpractice cases in his history.  Do we need to do anything with this information if everything else about the applicant checks out?

ANSWER:            Every application for appointment and reappointment asks applicants about their malpractice history.  But many hospitals don’t know what to do with the information they receive. The Joint Commission requires hospitals to consider “any evidence of an unusual pattern or an excessive number of professional liability actions resulting in a final judgment against the applicant” in granting privileges. But what is “an unusual pattern or an excessive number”?

A physician’s malpractice history cannot be ignored.  Unfortunately, there is no hard and fast rule on what constitutes reasonable due diligence when it comes to reviewing these types of disclosures.  The key is to know what to look for:

  • Not all malpractice claims are created equal, so information should be obtained to understand the nature of the claims.
  • The number of claims may not tell the whole story, but patterns or trends do.
  • Don’t compare apples to oranges – know which states and which specialties are more “at risk” for malpractice claims.
  • There is a big difference between malpractice claims and malpractice verdicts.

To learn more about how to consider an applicant’s malpractice claims history, as well as other hot topics in the world of credentialing, please join LeeAnne Mitchell and Ian Donaldson this fall at The Credentialing Clinic in Las Vegas, Nevada.

July 14, 2016

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QUESTION:        We have several ambulatory surgery centers (“ASCs”) in our System.  We recently looked at the bylaws of the ASCs and they are quite antiquated.  Even more of a concern, we learned that the credentialing process in the bylaws is not being followed at the ASCs.  We need to work with the ASCs to change their bylaws, but where do we start?  The medical staff bylaws (and credentials policy) for the hospitals in our System are now all very similar.  Can we incorporate the ASCs into the medical staff bylaws?

ANSWER:           You asked if the ASCs could be incorporated into the medical staff bylaws of the hospitals in your System.  This approach has the appeal of simplicity.  However, given the vast differences in the size, structure, and organization of the medical staffs at the ASCs and the medical staffs at the hospitals, this option seems awkward at best.  There might also be some regulatory issues with this approach.  Specifically, the ASCs are required to have their own medical staffs in some states.  Thus, in order for the medical staffs of the ASCs to function as a part of the medical staffs of the System hospitals, it could be necessary to seek an exception from the Department of Health.

Another option would be to take the medical staff documents that were prepared for the System hospitals’ medical staffs and use them as a starting point for the creation of governance documents for the ASCs.  We recommend this approach for several reasons.  First, this approach would provide an opportunity to update the ASC bylaws to reflect current practices.  Second, this approach would help ensure that the ASC bylaws are well-drafted and in compliance with controlling law.  Third, while the hospital medical staff documents would have to be substantially pared down and streamlined for use by the ASCs, these documents would include key provisions, such as a System Credentials Committee, a Professional Affairs Committee to resolve disputes among the Medical Executive Committees, and language to ensure that decisions at one System facility are applicable at all System facilities, which would facilitate uniformity within the System.

July 7, 2016

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QUESTION:        Our state passed a medical marijuana bill, and it’s now ready to be fully implemented.  Should our hospital allow inpatients to use their own therapeutic cannabis?

ANSWER:            As of now, 25 states and Washington, D.C. have legalized marijuana for medical use.  And it would not be surprising if more come on-line.

The first place to start is whether the state law in any way requires a hospital to allow for an inpatient’s individual usage.  That’s highly unlikely, which is why this becomes an area for the development of a hospital policy.

Guidance certainly comes from a likely already existing policy concerning the use by patients of their own medications brought while an inpatient.  Even with that, though, we’ve been asked whether therapeutic marijuana should be treated in a different way than “regular” medications.

In the long run, the answer is no.  Certainly, the medicine brings its own notoriety, cultural and political issues, but the answer is that it is best to review medical marijuana along already established and regular ways.

But because of that notoriety, medical marijuana raises other issues that may or may not be addressed in a traditional “patient’s own prescription usage” policy.  Or if they are, those issues may need to be reviewed again in the context of whether there should be any other answers where therapeutic cannabis is involved.  If the hospital chooses not to allow medical cannabis use in the hospital, how should the patient’s cannabis be handled?  Could the patient keep it in her room?  Should it be locked in the hospital’s patient possessions safe?  Must a family member or friend come as soon as possible to get it out of the hospital and off the hospital’s campus?

From our experience, hospitals have largely taken a “no own inpatient use” approach.  And it is best to make this clear in a hospital policy or rule, because it’s likely if you’re in one of those 25 states, a patient will ask.

June 16, 2016

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QUESTION:         We’ve been hearing about a new federal law called the Defend Trade Secrets Act of 2016.  What is it and how does it apply to hospitals?

ANSWER:            The Defend Trade Secrets Act of 2016 (“DTSA”) was signed into federal law in May 2016 by President Obama.  The DTSA allows private companies to sue in federal court when their trade secrets have been “misappropriated” (basically, stolen).  The DTSA was passed since it is believed that the theft of trade secrets has caused trillions of dollars of losses to the U.S. economy.

Certain disclosures of trade secrets are permitted and give the employee/contractor that disclosed the trade secret immunity – clearly, these provisions mean to protect “whistleblowers.”  Also, if an employee/contractor files a lawsuit for retaliation for reporting a suspected violation of law, the employee/contractor may disclose the trade secret subject to certain conditions.

So, how does this apply to hospitals?  Courts have ruled that the compensation/bonus formula in a contract is a trade secret.  The DTSA requires a notice of immunity from liability for all individual employees/contractors in any contract which governs the use of a trade secret or other confidential information.  This immunity applies to those employees/contractors who disclose trade secrets in a government investigation, provided that the disclosure is in accordance with the DTSA.

Therefore, we recommend a notice provision for all physician employment contracts and personal services contracts, since those contracts contain compensation/bonus formulas.  Even if a hospital does not believe that its contracts contain trade secrets, we recommend adding a notice provision “just in case.”  In lieu of a notice provision, a hospital could provide a cross-reference in the contract to a hospital policy.  In any event, we recommend that a hospital consult with counsel to develop a notice provision, policy, or both.