Author: hortyspringer

August 13, 2015

Posted on by hortyspringer

QUESTION:         We heard that a new exception in the proposed Stark rules would allow a hospital to provide “recruitment” assistance to a physician who wants to employ a physician assistant. Is this true?

ANSWER:           Yes. CMS recently proposed a number of changes to the Stark Regulations, among them, a new exception for payments made by a hospital to a physician to assist the physician in the employment of a “non-physician practitioner” in the geographic service area of the hospital. Under the proposed new exception, a “non-physician practitioner” includes physician assistants, nurse practitioners, clinical nurse specialists and certified nurse midwives. The non-physician practitioner must also be a bona fide employee of the physician, and the reason for employing the practitioner must be to provide primary care services to the patients of the physician. The proposed exception also includes a two-year limit on assistance and a cap on the amount given by the hospital to the physician.

However, please remember that these are proposed rules. The safest course of action is to not enter into these arrangements until the rules are final. But, if a hospital does not want to wait, it could follow the proposed rules. However, that is risky since the proposed rules may never become final, or may change before becoming final.

To help you stay on top of this very important development, join Horty Springer partners Dan Mulholland and Henry Casale as they discuss the proposed changes to the Stark Rules during a special audio conference entitled Stark Reality Check! — CMS Proposes New Stark Law Rules on August 17, 2015 at 1:00 pm ET.

August 6, 2015

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QUESTION:        Our hospital has a drug testing policy and drug-free workplace policy that prohibit the use of marijuana. However, we live in a state which recently legalized the recreational use of marijuana. Do we need to revise our policies?

ANSWER:           No. In the interest of protecting patients, many hospitals have turned to drug testing their employees and potential employees to screen out individuals who may present a risk to patient safety because of substance abuse or addiction. With some states legalizing marijuana for recreational or medicinal uses, hospitals in those states have struggled with the question of whether they can take an action against an employee or potential employee for testing positive for marijuana.

A recent opinion issued by the Supreme Court of Colorado, in the case of Coats v. Dish Network, LLC, addresses this question. The court concluded that an employer can discipline an employee for testing positive for marijuana during a workplace drug test. According to the court, even though marijuana is legal under state law, it continues to be illegal under federal law.

The employee, a quadriplegic confined to a wheelchair, worked as a telephone customer service representative for Dish Network. He obtained a Colorado-issued license to use medical marijuana to treat painful muscle spasms. He only used the medical marijuana at home, after work. Dish Network terminated him after he tested positive for marijuana during a random drug test. The employee sued for wrongful termination, claiming that state law prohibited Dish Network from terminating his employment for “lawful activities.” The Supreme Court of Colorado rejected his claims, finding that marijuana use, both recreational and medicinal, is prohibited by federal law and, thus, could not be considered a “lawful activity.”

If the trend of states legalizing recreational or medicinal marijuana continues, this issue will keep arising. For employees who are disabled and using medical marijuana prescribed by a physician, the Americans with Disabilities Act (“ADA”) may also come into play. However, the ADA does not protect individuals who are currently engaging in the “illegal use of drugs.” Under the ADA, the term “illegal use of drugs” means the use of a drug, the possession or distribution of which is unlawful under the federal Controlled Substances Act. The Controlled Substances Act lists marijuana as a Schedule I substance, which means, among other things, it has no accepted medical use and the use of it is a federal criminal offense. Thus, an individual currently using medicinal marijuana would not be protected under the ADA because he or she is considered to be currently engaging in the “illegal use of drugs.”

Hospitals can rest assured that their drug testing and drug-free workplace policies which prohibit the use of marijuana are legitimate as long as marijuana is illegal under federal law.

To learn more about these and other employment-related issues and how they impact the employment of physicians, join Henry Casale, Rachel Remaley, and Charles Chulack in Las Vegas, Nevada from October 15 through 17, 2015 for the Physician Employment Institute.

July 30, 2015

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QUESTION:        Can a hospital pay a physician’s current employer to release the physician from a non-compete covenant in order to allow the physician to come to work for the hospital?

ANSWER:            This one isn’t hypothetical. It happens a lot. Assuming that the non-compete is valid and enforceable (in some states and situations they aren’t), it might be possible for the hospital to pay money to a prospective physician employee’s current group to be released from a non-compete. Like everything else, the devil is in the details. First of all, the amount paid must be fair market value. This is easier to determine if the physician’s current contract contains a “buy out” clause allowing the physician to pay liquidated damages in lieu of being subject to the non-compete. Liquidated damages in the range of one year’s salary have been upheld by courts as reasonable, so the hospital can often presume that this amount would be fair market value. If there isn’t a liquidated damages provision, a non-compete can be valued based on what the competition from the physician will cost the current employer, taking into account the physician’s contribution margin to the employer and the cost of replacing the physician. However, the value of the non-compete cannot be calculated based on how much more business the hospital will receive by being able to employ the physician. This could raise questions under the Stark law.

Since the release will also benefit the physician, the amount paid for the release should be considered along with the physician’s proposed salary in terms of whether the physician’s compensation going forward is at fair market value. This is especially important if the hospital is paying off liquidated damages which would otherwise be the obligation of the physician to pay. One way to handle this is to treat the non-compete release payment as a loan to the physician, which can be forgiven if the physician remains employed for a period of time (say, three to five years) and provides charity care or similar community services in the employ of the hospital. This way, the non-compete buyout will function as a retention incentive, and the income attributed to the physician will be spread out over the life of the loan as it is forgiven, both for fair market value determination and tax purposes.

That being said, don’t try this at home without close adult supervision. Call your lawyer.

July 23, 2015

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QUESTION:        Our surveyor discovered that we granted a privilege to a physician for a procedure that we do not do at our facility. We corrected the privilege delineation form, but now we are wondering how to go about notifying the physician that we do not do this procedure.  Our surveyor said that we need to have documentation as to how we handled it. Help!

 ANSWER:        This happens from time to time, but it sounds like you are on top of correcting the forms.

In terms of notifying the physician, we would suggest that you simply inform her of the oversight and then follow that up with a memo or letter summarizing the situation (i.e., there was an oversight made by the Hospital in offering the privilege, the oversight was discovered and corrected, and, because the Hospital will no longer have this privilege on its form, she will no longer see it on her delineation of privileges going forward).

For the physician’s peace of mind, the memo or letter should make it clear that this is not a reduction or “relinquishment” of clinical privileges, so the situation will not trigger any reporting obligation, hearings, etc. Nor would it require the physician to give an affirmative response to any questions about reductions/relinquishments of privileges on an application form in the future.

This is an example of the types of question you can ask our lawyers when you attend the Credentialing Clinic in San Antonio, Texas. Learn how you can join us for this interactive course by clicking here.

July 16, 2015

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QUESTION:        Our Hospitalists have been short-staffed for some time now. They desperately need several new doctors. We understand their predicament, but we are also frustrated that they keep presenting us with sub-par applicants. Then they get upset with us for asking so many questions and taking so long. What can we do? – Credentialing Coordinator

ANSWER:        It sounds like you already have a keen appreciation for the importance of making the right decision at initial appointment. As one Credentials Committee Chair recently noted, “Good credentialing is the foundation of quality care.” Thus, while appointing a below average applicant may give the group some initial relief with their scheduling dilemma, that relief will be short?term, and predictable problems will follow.

There are a few steps that can be taken to help address the problem of a group recruiting applicants who are not likely to meet your credentialing expectations. First, you should consider strengthening your threshold eligibility criteria set forth in the Credentials Policy. Instead of just requiring that an applicant have a license, your criteria could require an unrestricted license and no previous licensure actions within the last seven years. You could also require no past disciplinary actions by any other hospital and no resignations during or in exchange for not conducting an investigation. Completion of an ACGME?approved residency program and board certification are also excellent standards to build into threshold eligibility criteria.

No one’s application gets processed if he or she does not satisfy the threshold criteria. Therefore, once the threshold criteria are built into your Credentials Policy, they will help filter out some of the “sub-par” applicants. (It’s important to remember that waivers to the threshold criteria should be limited to exceptional situations.)

Second, once the threshold eligibility criteria are adopted, they should be shared with all members of the Medical Staff, but you could make a special effort to call the criteria to the attention of the hospitalist group and other groups who may have a history of recruiting problems. Anyone who is recruiting new applicants should understand that all new applicants must satisfy the threshold eligibility criteria. It’s helpful to keep in mind, as noted in the Kohn case discussed in this week’s HLE, courts defer to threshold criteria adopted by hospitals.

Third, if the hospitalist group has a contract with the hospital (and it probably does), the hospital should build the threshold criteria into that contract. No employed or contracted physician should be appointed and granted clinical privileges unless the physician satisfies the basic threshold criteria.

July 9, 2015

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QUESTION:      A patient acts erratically, is still ill, leaves the hospital AMA, and tells hospital personnel not to inform his family. That’s a HIPAA patient direction. The patient has two adult children who would want to know this information. What should the hospital do?

ANSWER:         An adult son brought his 60-year-old father to the hospital’s ED with erratic behavior, confusion and intoxication. The patient was diagnosed to have had a stroke. After receiving hospital inpatient care, the patient is transferred to a rehabilitation facility. The patient leaves the rehab facility by taxi after he has a disagreement concerning the facility’s no smoking rules.

After staying at a hotel for a night, the patient comes to the front entrance of the hospital via another taxi ride. He chooses to simply sit there. A social worker who had been working with the patient joins him. While he is still confused, the patient is not a candidate for an involuntary hold or commitment. The patient refuses to go to the ED or receive any hospital care. He calls for another taxi and leaves for a place unknown. Before he leaves, the patient tells the social worker not to report any of this information to any of his adult children. (He has three children, two of whom live in the area.)

Can the hospital notify the adult children under HIPAA? Should it? HIPAA appears to prohibit any notification given the patient’s directions. But there is a HIPAA exception where information sharing is needed to prevent imminent danger to the individual.

The hospital was uncertain what to do. This was an AMA patient, but not in the usual way. It wasn’t clear that he had re-presented to the hospital. The social worker believed that the man was putting himself at real risk from both the post-stroke physical activity and the certainly odd behavior, but that wasn’t a determination made by a physician. Nor was the social worker comfortable with saying that the individual truly lacked decision-making capacity.

The man’s adult children had been very much involved in his care. They would want to know what was happening. Doing the right thing seemed to lead to informing the adult children.

The concern for the patient and doing right by the adult children lead us to feeling comfortable with relying upon the imminent danger exception. There was also some risk management discussion: a potential HIPAA complaint filed by the man versus a potential complaint filed by the adult children that they should have been informed as to what was going on. The outcome was a collaborative counsel-client decision, very much based upon its peculiar facts (as is so often the case).

July 2, 2015

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QUESTION:        We are in the process of buying a Medicare provider. Can you provide any guidance on Medicare’s Change of Ownership (“CHOW”) process?

ANSWER:             Yes. Medicare has made it practically impossible to acquire any provider without assuming that provider’s Medicare Provider Number. As a result, you will have to follow Medicare’s CHOW process.

The CHOW process requires both the Seller and the Buyer to complete a CMS Form 855-A for each Medicare Provider Number. (It is not unusual for one provider to have several Medicare Provider Numbers.) You will also need to obtain a new NPI number that will correspond to each Medicare Provider Number.

The Buyer and the Seller’s completed Forms, 855-A, with all attachments, must be sent to the Medicare Contractor. Please be sure to provide all information requested in the required format. When they ask for a zip code +4 or the date in an mm/dd/year format, they mean it! If you have to provide any supplemental information, then you also have to have a new certification statement (Section 15 of Form 855-A) signed and dated by an “Authorized Official.” An “Authorized Official” is defined in the 855-A as an individual who has the authority to make the changes in that submission and to commit the Buyer to fully abide by the statutes, regulations and program construction of the Medicare Program.

Once the Medicare carrier approves the application, it will be sent to CMS’s Regional Office for their review and comment. Once approved, the Regional Office will issue an approval to the provider, the Medicare Contractor and the State.

This process takes time, so plan accordingly. Also since the Buyer will be assuming the Seller’s provider number, the acquisition agreement should address the rights of the Buyer in the event of an overpayment that was caused by the Seller’s pre-closing operation of the provider but is not discovered until after the Closing Date.

Did you notice how many of this week’s cases involved employed physicians? We did!

Please join Henry, Charlie and Rachel in Las Vegas on October 15-17 for the Institute on Employed Physicians and Their Impact on the Medical Staff.

June 25, 2015

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QUESTION:        Our hospital would like to develop a “VIP” program by which certain individuals would receive special recognition when they are hospitalized. For example, current or past members of the Board of Directors or other individuals who have served the community might receive a card, flowers or a personal visit. Is such a program acceptable under HIPAA?

ANSWER:          HHS has issued no guidance on this topic. However, we believe a VIP program poses little risk under the HIPAA Privacy Rule.

The Privacy Rule permits hospitals to use or disclose protected health information for its own “health care operations.” “Health care operations” is defined broadly to include “general administrative activities,” which could reasonably be interpreted to include efforts to build and maintain relationships with individuals who are involved in the affairs of the community.

Of course, some hospitalized individuals who are particularly concerned with privacy may complain that the VIP program does not actually involve health care operations. One way to limit the possibility of such complaints is to ensure that any individual who has opted out of the facility directory, as permitted by the Privacy Rule, does not receive special recognition. More broadly, any dissemination of information within the hospital should be limited to those with a “need to know” for purposes of the VIP program.

Another way to limit complaints is to ensure that the health information of a patient is not disclosed outside of the hospital. For example, if flowers or other small gifts are ordered, they should be sent to an administrator’s office and then re-directed to the patient. Patients may expect hospital personnel to know they are hospitalized, but they may object to that information being shared with the local florist or other merchants.

We are unaware of any enforcement actions involving VIP programs, which might suggest that they are not viewed as a HIPAA violation by HHS. However, hospitals that choose to implement them should do so in a way that protects patient privacy and limits the disclosure of patient information.

June 18, 2015

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QUESTION:        I was recently appointed as chair of a medical staff committee and am very happy, but I just realized that instead of merely attending meetings, I’ll have to run them, so I’m also extremely nervous. Help!!!

ANSWER:          An efficient meeting is the key to making it an effective meeting, and running a meeting is hard work. Here are some tips:

Tip #1. Start on time. This is one of the most important tips. If a meeting isn’t started on time, chances are it won’t end on time, and that has consequences which we’ll discuss below. If a meeting always starts on time, the attendees will more than likely be there on time, since no one likes to walk into a meeting late, and being late disrupts the meeting.

Tip #2. Limit the conversation. What “limit the conversation” means is that if a couple of attendees in the room are making the same point, over and over again, that’s unproductive, so the chair should step in and say “Ok, any other points of view that we haven’t discussed yet?” Also, if a discussion “drifts,” the chair should step in and restate the purpose of the discussion. This can be hard to do, but it is a skill that needs to be developed. Otherwise, the participants start thinking the meeting is a waste of time, and the downward spiral begins.

Tip #3. Take an issue off-line. There are times when a meeting is getting bogged down because no one has the information needed to make a decision. For example, is the bylaws revision being discussed a Joint Commission Standard? A best practice? If no one knows for sure, further discussion will not help the committee make a decision, so that issue should be taken off the agenda until the next meeting, to research the issue.

Another reason to take an issue off the agenda is when there are so many conflicting points of view that the issue won’t be able to be resolved at the meeting. The chair knows that no matter how much more discussion there is, the issue won’t be resolved. So, the chair should stop the discussion, and maybe appoint a small group to investigate or research the issue, then bring the results back to the committee.

Tip #4. End on time. This is the most important tip. If a meeting is to end at 8:30 a.m., end the meeting. Although some attendees don’t mind going over, others will start thinking about work that needs to be done, or another meeting to go to, or an appointment to make – focus is lost. A meeting that runs on and on and on isn’t efficient and becomes much less effective as time goes on. Also, not ending on time affects meeting attendance. If an attendee knows that the meeting always goes over, he or she is less likely to attend the meeting.

Sometimes agendas are just too full, or there may have been too much discussion on one issue, etc. – that happens. But, instead of plowing on through with more and more disinterested attendees as each minute ticks by, just end the meeting, and hold those agenda items over for the next meeting. The exception is if the issue is of critical importance, but that will be few and far between.

June 11, 2015

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QUESTION:        Our professional practice evaluation committee (“PPEC”) recently obtained an external review of a neurosurgery case that involved significant complications and a poor outcome for the patient. We shared the de-identified results of that review with the surgeon and invited him to submit his written comments and meet with the committee. Instead of doing so and without notice to the PPEC, he arranged for his own external review, by a neurosurgeon picked by him and unknown to the committee. He has submitted that review – which found no deviation from the standard of care – to the committee, with a statement indicating that no further review is required. What can we do with conflicting external reviews? Should we reprimand him for violating HIPAA?

ANSWER:        It can be frustrating when the leadership is attempting to deal openly and collegially with a colleague and its efforts are rebuffed. Such is the case here, where the neurosurgeon whose case is under review has ignored your request for his personal input and his attendance at your upcoming meeting and, instead, has obtained an unauthorized review by a third party. Your knee-jerk reaction may be to reprimand him or disregard his unsolicited expert opinion out-of-turn. After all, you are trying to help this practitioner improve his performance and he is, by all observation, fighting you tooth and nail. While that perspective is understandable, we encourage you to also think about this from the neurosurgeon’s perspective before deciding on next steps.

First, to get the legal issue out of the way, please note that there does not appear to be a violation of HIPAA’s privacy regulations, since the neurosurgeon is part of an organized health care arrangement with the hospital (as are all doctors who are members of the Medical Staff) and, in any event, the disclosure of information he made to his external reviewer was limited to records of a patient that he and the hospital have both treated and was for the limited purpose of quality improvement. HIPAA permits disclosures in such situations.

While HIPAA may not have been violated, the neurosurgeon’s actions may have nevertheless violated the hospital’s policies. For example, the hospital may have policies requiring all external reviews to be arranged through a specific person (such as the CEO or CMO) or body (such as the MEC), to ensure that any contracts for such reviews include appropriate protections. Further, the hospital may require its own business associate agreement or a confidentiality policy to be signed by any reviewer prior to sending that reviewer medical records. In this case, because the review was arranged by the neurosurgeon, but involved the disclosure of the hospital’s records, the hospital lost the opportunity to protect itself through the contract with the reviewer. It would be appropriate to follow up with the neurosurgeon by requesting a copy of the business associate agreement and, consistent with any hospital or Medical Staff policy, by notifying him of the appropriate process for arranging external reviews of care provided in the hospital.

Unless there is good reason to proceed otherwise, a reprimand is probably not necessary. Unless you have additional facts pointing to the contrary, it seems likely that this physician did not realize that his actions in obtaining an independent review informally – and without the authorization of the hospital and its Medical Staff leaders – could violate policy.

Now that you have the neurosurgeon’s independent review in your hands – what should you do with it? Medical Staff leaders often struggle with how to proceed in cases where experts disagree. Admittedly, this can seem like a “damned if you do and damned if you don’t” sort of situation. The good news is: Most courts give great deference to the decisions of hospitals and their Medical Staff leaders in matters involving Medical Staff appointment and clinical privileges. So, when facing conflicting information, your hands are not tied. You should feel comfortable looking at all of the information at hand, weighing each piece against the totality of information, and then finalizing a decision. Things to keep in mind:

  • Don’t reject the neurosurgeon’s independent review out of hand, simply because the neurosurgeon obtained it without notice to the PPEC and without going through formal channels. Consider the qualifications of the independent reviewer and the quality of the report that he or she supplied. Ask follow-up questions, if necessary. In the end, you may reject the review if the reviewer is not adequately qualified, does not have current clinical experience, or has not delved into the parts of the case that the PPEC thinks are relevant. If you do reject the report, or choose to give it little weight, articulate your reasons for doing so – and record those reasons in the minutes of the meeting where the matter is decided.
  • If the independent review seems well-informed and the reviewer seems well-qualified, you may try to work out the conflict between the PPEC’s external review and the neurosurgeon’s external review via any one or more options. First, you may choose to send the report submitted by the neurosurgeon to the PPEC’s external reviewer – and ask that your reviewer comment on the contrary conclusions. Second, you may choose to send the PPEC’s external review report to the neurosurgeon’s independent reviewer – and ask that reviewer to comment on the contrary conclusions. You could send both external reviews to a third external reviewer, who may act as a “tie breaker.” As a fourth option, you could choose to simply contact the neurosurgeon’s reviewer to question him about his conclusions – and verify that he had all relevant information about the care and about the PPEC’s concerns at the time he conducted his review and wrote his report.
  • In the end, the PPEC will need to weigh all of the information it has gathered before deciding how to proceed. This will mean considering all external reviews, any input from the physician, the opinions of the physicians who serve on the committee, and the physician’s peer review history, among other things. It must decide which sources of information are most credible, informative, relevant, and persuasive. Remember that the purpose of professional practice evaluation is to identify areas where there is room for improvement. Therefore, the leadership may choose to give less weight to a case review that concludes that there was “no deviation from the standard of care” (a term usually reserved for malpractice litigation, which relates only to whether the care is considered negligent by legal standards and not to whether the care satisfies your organization’s expectations) and more weight to a review which identifies strengths and weaknesses in the care that was provided.

Finally, one last point that, though discussed last, is not of least importance. The PPEC has invited the neurosurgeon to submit written feedback and to attend its upcoming meeting. The physician has ignored these requests. It is important that you follow up on these invitations – and not get sidetracked by the fact that the physician has submitted a report from an independent reviewer. Now is the time to follow up with the neurosurgeon. Tell him that you will consider the report he submitted, but that he must provide the written feedback and attend the meeting, as previously requested. If you have language in your Medical Staff Bylaws, Credentials Policy, or Professional Practice Evaluation Policy stating that individuals must provide information upon request by the leadership, or stating that they must attend meetings when given special notice that they are required to attend and that their care will be discussed, cite that language.

Make it clear that the leadership will not be thrown off course by the submission of the independent review – or by any other antics. Performance improvement can occur only if physicians under review actively participate in the professional practice evaluation process. Accordingly, it is important that this neurosurgeon get on board and work with the PPEC, collegially, to help it get to the bottom of what happened in this case to give rise to such serious complications and such a poor outcome.