Question: Of every six Medicare patients admitted to the hospital for nonsurgical reasons, one will return within 30 days.  Beginning October 2012, CMS started reducing pay to hospitals for such readmissions.  About 80 times a week, U.S. patients undergoing surgery experience mistakes that safety advocates say should never happen.  Whose job is it to address these concerns:  the Medical Staff, Hospital Administration or the Board?

Answer: The easy – and correct – answer is that it’s the job of the Medical Staff, Hospital Administration and the Board.  And, most importantly, that these three groups work together, not individually.

But, the strongest legal answer is the Board.  That’s because the Board is legally responsible for the conduct of the hospital as an institution.  That’s from federal law, state law, and accreditation standards.  And, emerging research shows that Boards can make an enormous difference in improving quality and patient safety.

How to do this?  By working with the Medical Staff and Administration in developing good policies, procedures and criteria for credentialing, privileging, peer review and ongoing performance improvement.  By spending 25% of Board time on quality and patient safety.  By creating a Board Quality committee.  And these are but three actions; there are many more.

These are all important improvements that are a necessary part of a hospital’s mission.  But there is also the hard reality that unless a hospital can shape (or reshape) itself to be paid on its quality outcomes, and not just its procedures, that hospital could find itself in a poor fiscal position to care for its community.  And, that is definitely on the Board.

To learn about the Board’s role in quality, and how critical this role is, join HortySpringer attorneys Linda Haddad and Alan Steinberg for an audio conference on July 2, The Board’s Role in Quality and Safety.

Question: We just discovered that we have been providing a service to certain medical staff members pursuant to a written agreement that has expired.  What can we do?

Answer: First and foremost, DO NOT PANIC!  While all agreements with any person who is in a position must be at fair market value, due to the potential financial penalties that can arise from noncompliance, a hospital’s primary concern is compliance with the Stark Law.  However, the first thing that you have to determine is whether the Stark Law applies.  Is the other party to the agreement a “physician” as this term is defined in the Stark Law?  In most instances, the answer will be yes.  However, if, for example, the other party is a physician assistant or CRNP, then those mid-level providers are not “physicians” and the Stark Law will not apply.

If a physician is involved, what is the physician’s specialty?  Is the physician a pathologist, radiologist or radiation oncologist?  If so, then, according to the Stark Bill, those physicians do not make “referrals,” so Stark does not apply.  Was there a previous agreement?  If so, then 42 C.F.R. §411.357(d)(1)(vii) provides that as long as a new agreement is executed within 180 days of the date of the expiration of the previous agreement, then the agreement will continue to comply with the personal services exception.  Then consider the law in your state regarding expired agreements.  In many states, the agreement will renew as an operation of law.

Also remember that while the personal services exception is the exception that usually applies, the hospital must only satisfy one exception to the Stark Law.  If the physician is making a payment to a hospital for any item or service, see if the “payment by physicians” exception applies (42 C.F.R. §411.357(i)).  This often overlooked exception may prove to be invaluable in these types of situations since the exception does not define “item or services,” and does not require a written agreement.  A written agreement is also not required if an employment relationship is involved, or if the service can be considered to be a medical staff incidental benefit (42 C.F.R. §411.357(m)).

If all else fails and your legal counsel advises you that a voluntary disclosure is legally required, make sure that your legal counsel advises you to consider the foregoing when determining the amount that may be due to the government pursuant to that disclosure.

Want more information on this and many other issues related to hospital-physician financial relationships?  Then join Dan Mulholland and Henry Casale in New York City on November 21-23 for our Hospital-Physician Contracts:  Survival Strategies seminar.

Question:  Has the Internal Revenue Service (“IRS”) issued proposed regulations on the requirement that charitable hospitals perform a community health needs assessment?

Answer:  Yes.  Internal Revenue Code Section 501(r)(3) requires that charitable hospitals perform a community health needs assessment (“CHNA”) every three years or risk losing tax-exempt status.  The IRS has issued proposed regulations on the CHNA requirements and set forth the consequences of failing to meet the requirements.

The proposed regulations state that a hospital meets the CHNA requirements if it has conducted a CHNA within the current tax year or in either of the two immediately preceding tax years and the board has adopted an implementation strategy to meet the community health needs identified through the CHNA by the end of the tax year in which the hospital conducts the CHNA.

Please note that these are proposed regulations, and that the final regulations may differ.  However, a hospital can rely on the proposed regulations for any CHNA performed or implementation strategy adopted up to six months after the proposed regulations are published as final or temporary regulations in the Federal Register.

Also, please note that the IRS is accepting comments on the proposed regulations that are received by July 5, 2013.

Question: We’ve had concerns raised about a member of our medical staff writing scripts for themselves and family members.  There was also a question raised about another member who performed a test on a family member without going through the formal mechanisms for patient registration.  What can we do to educate our medical staff about the risks involved with these kinds of practices?

Answer: Medical staff members need to be reminded of the significant concerns that arise when a physician treats himself or herself, a family member, or someone with whom the physician has a close relationship (such as a domestic partner, fiancé, etc.) Such activities also present serious risks for the hospital, including the legal risk of malpractice liability and the risk of citation for violation of regulatory and accreditation requirements for proper documentation of care provided to patients, all of whom should be registered in the usual manner.

The American Medical Association has spoken specifically to this issue, in its Code of Ethics (see Standard E-8.19), as have various state medical boards.  We recommend reviewing the guidance provided by these bodies and adopting policy language in the Medical Staff Rules and Regulations that reinforces that the standards of acceptable medical practice do not allow physicians to treat themselves or members of their own families.  Of course, there is an exception to every good rule, so the provision should recognize specific exceptions, like where the patient’s disease is rare or exceptional and the physician is considered an expert in the field or in an emergency where no other medical staff member is readily available to care for the family member.

 

Question: Our hospital is in a state with a very weak peer review privilege.  We are looking for ways to better protect our peer review information and thought that the federal Patient Safety and Quality Improvement Act (“Patient Safety Act”) could assist us in achieving this goal.  Is this possible?

Answer: Yes.  The Patient Safety Act can be used to protect peer review information.  The confidentiality and privilege protections under the Patient Safety Act are extremely strong and in most cases exceed those available under traditional state peer review privileges.  The preamble to the proposed regulations for the Patient Safety Act instructs that the protection of peer review information is one of the specific purposes of the Patient Safety Act.  The preamble provides as follows:

Traditional state-based legal protections for such health care quality improvement activities, collectively known as peer review protections, are limited in scope:  They do not exist in all States; typically they only apply to peer review in hospitals and do not cover other health care settings, and seldom enable health care systems to pool data or share experiences between facilities.  If peer review protected information is transmitted outside an individual hospital, the peer review privilege for that information is generally considered to be waived….  [T]he Patient Safety Act specifically addresses a number of these long-recognized impediments to improving the quality, safety, and outcome of health care services.

Thus, the Patient Safety Act not only considers peer review information to be within the scope of its protections, it also seeks to broaden the protections available under state laws by allowing for the sharing of peer review information between hospitals and affiliated entities (e.g., physician group practices) and eliminating the ability of a provider to “waive” the privilege and confidentiality protections under the law.

However, once a hospital reports peer review information to a Patient Safety Organization under the Patient Safety Act, it is difficult to retrieve in identifiable form the information and then use the information for other purposes.  Consequently, if a hospital needs peer review information to conduct a medical staff hearing, appeal, or investigation and has already reported the information to a Patient Safety Organization, it will be hard to access.

But, the regulations for the Patient Safety Act anticipated this situation and allow providers to maintain information in a Patient Safety Evaluation System before reporting the peer review information to the Patient Safety Organization.  Information maintained in a Patient Safety Evaluation System is subject to the same strong privilege and confidentiality protections that apply to information reported to Patient Safety Organizations.  The only difference is that information held in a Patient Safety Evaluation System can be removed easily to be used for other purposes, such as to satisfy external reporting requirements or for conducting medical staff hearings and appeals (once the information is removed from the Patient Safety Evaluation System, it is no longer subject to the protections under the Patient Safety Act).  The key is to have a well-defined Patient Safety Evaluation System that provides guidelines for when the hospital will report peer review information from its Patient Safety Evaluation System to the Patient Safety Organization.

To learn more about protecting peer review information under the Patient Safety and Quality Improvement Act, join Horty, Springer & Mattern attorneys Henry Casale, Rachel Remaley, and Charlie Chulack for the Institute on Employed Physicians and Their Impact on the Medical Staff in Chicago from October 3 through October 5, 2013.

Question:

I’ve never quite understood hospital accreditation.  Is it the same as a regulation?  What do TJC, HFAP, and DNV stand for anyhow?  And why are they important?

Answer:

Accreditation is different from regulation.  Regulation comes from governmental entities.  On the federal level, the Centers for Medicare & Medicaid Services (“CMS”) set the regulations to which hospitals need to comply in order to be a Medicare participating hospital.  CMS issues the Medicare Conditions of Participation (“CoPs”) that must be met.  On the state level, usually the state’s department of health issues hospital licensing regulations that the hospital must meet in order to stay licensed.

In contrast, accreditation is a process and outcome by which a hospital voluntarily undergoes a review by an accreditation organization.

The Joint Commission is the oldest of the three accrediting bodies.  Its roots run back to the early 1900s when the American College of Surgeons created its Hospital Standardization Program.  The Joint Commission on Accreditation of Hospitals (“JCAH”) began in 1951, created by the merging of the Hospital Standardization Program with similar programs run by the American College of Physicians, the American Hospital Association, and the American Medical Association.  The JCAH changed its name in 1987 to The Joint Commission on Accreditation of Healthcare Organizations (“JCAHO”), and then slimmed down, name-wise, in 2007 to “The Joint Commission.”

The Healthcare Facilities Accreditation Program (“HFAP”) was originally created in 1945 to conduct an objective review of services provided by osteopathic hospitals.  The HFAP is an accreditation program of the American Osteopathic Association.

DNV Healthcare, Inc. (“DNV Healthcare”) is the third provider of hospital accreditation.  DNV Healthcare is a subsidiary corporation of Det Norske Veritas (the original “DNV”), an independent Norwegian foundation that has as its primary purpose the safeguarding of life, property and the environment.  The Original DNV goes back to 1864 and is quite global.  DNV Healthcare is the most recent of the accrediting bodies in terms of accrediting U.S. hospitals.

Why would any hospital voluntarily agree to be accredited by any of these organizations?  Because accreditation by The Joint Commission, HFAP, or DNV Healthcare provides “deemed status” – automatic recognition that the hospital has complied with the Medicare CoPs and so remains or becomes a Medicare participating hospital.

But, while “deemed status” comes with any of these accrediting bodies, each of these organizations have different approaches and standards by which they review and accredit hospitals.  The differences among these organizations run from large conceptual differences to differences in the details.  Which accrediting body to use, if any, is an important decision for any hospital.

To learn more about accreditation, its benefits, its costs, and many other important issues, please join us on June 4, 2013 from 1:00 to 2:00 p.m. (Eastern Time) for Grand Rounds – Accreditation:  What Physicians Need to Know!

Question:

As Chief of Staff, I appointed a new Vice Chief of Staff a month ago to serve out the term of an ill elected Vice Chief.  The new Vice Chief made negative comments about another physician (who is in a competing group) in an elevator where he was overheard by a family member of a patient. After learning of these remarks from the family member, the physician about whom the remarks were made asked for an investigation into what he sees as defamation. We had a hard time finding anyone willing to serve; this Vice Chief has not yet had any leadership training.  What can I do as Chief of Staff?

Answer:

You, along with one or more other Medical Staff leaders and perhaps the CMO, could try counseling the new Vice Chief and follow up with a written statement of expectations.  Disparaging comments in a public area are never acceptable.  Leaders have a responsibility to set a good example for others.  If this new Vice Chief (or any physician) has information relevant to clinical performance or professional conduct of any other physician, he should direct that information into the peer review process.  Discussing such issues publicly might be grounds for removal from office, but if he is cooperative, leaders might be willing to give him a chance to learn and improve.  If leaders are convinced that he is sincerely committed to appropriate conduct in the future and wishes to continue to serve, it would be a good idea for this physician to obtain some leadership training. The physician who asked for the investigation cannot be told the outcome of the counseling, but leaders can advise him that the process is confidential and that leaders take the concerns seriously.

Question: We have sent questionnaires to other hospitals in the past, then after appointment, information comes to light that we wish we had during credentialing.  In initial credentialing, what should hospitals do as senders of questionnaires?

Answer: Questionnaires should be carefully worded to capture all the information the hospital and its physician leaders reasonably believe to be helpful to assess qualifications.  Asking about whether the applicant has been the subject of an investigation is not likely to result in information about letters of guidance, letters of reprimand, performance improvement plans, or focused professional practice evaluations.  If there is a certain kind of information that is relevant to your decision-making, it should be reflected in the request for information.

For example:

“Timely, comprehensive and legible completion of medical records:
No concerns___  Some concerns___  Unable to assess___”

could be added to your evaluation form.

Always remember to hold an application incomplete until all reference requests are received, remember that the burden is on the applicant to provide the requested information, and remember not to process incomplete applications!

Question: Is there a time limit for precautionary suspensions?  Or can it be until the investigation is completed, even if that takes more than 14 days?

Answer: The duration of a precautionary suspension is within the discretion of the hospital and medical staff leadership implementing the suspension, in accordance with any relevant provisions of the organization’s Medical Staff Bylaws or Credentials Policy.  Of course, precautionary suspensions should only be implemented – and remain in place – as long as an imminent risk of harm to patients or others exists.  But, there is no legal time limit for the duration of the precautionary suspension.

We get this question from time to time, probably because of some language found in the Health Care Quality Improvement Act (“HCQIA”).  To clear up any confusion, let’s take a look at that language – and why it does not impose a time limit on precautionary suspensions.

The HCQIA is the federal statute which provides qualified immunity to those who conduct peer review activities and those who provide information during the course of credentialing and peer review.

With respect to those conducting peer review activities, the general rule is that HCQIA immunity is only available if the physician was provided notice and an opportunity to have a hearing and appeal before an adverse professional review action was implemented.  There are two exceptions to this general rule, however, and hospitals and their leaders are excused from the “prior notice and hearing” requirements of the HCQIA in both of these situations:

1. when privileges are restricted or suspended for 14 or fewer days, during which an investigation is conducted to determine the need for a professional review action; and
2. when privileges are immediately restricted or suspended, subject to subsequent notice and hearing or other adequate procedures, where failure to take action may result in imminent danger to the health of an individual.

In our experience, hospital and medical staff investigations – especially if they involve clinical concerns – almost always take more than 14 days to complete.  Therefore, we do not recommend that leaders proceed in suspending individuals pursuant to the first exception listed above.

Rather, we recommend precautionary suspension language that helps leaders fall within the safe harbor provided by the second option, described above.  In other words, we recommend that the Bylaws or Credentials Policy provide for precautionary suspension (prior to investigations, formal “notice,” and hearing and appeal rights) when the leadership believes that failure to implement the suspension may result in imminent danger to the health of an individual.  Further, we recommend review by the Medical Executive Committee on an expedited basis (no longer than 14 days after implementation of the suspension) regarding whether the suspension should be upheld until the issue can be resolved.

As a final point, be aware that the fact that a precautionary suspension is in place does not mean that an “investigation” must be conducted.  There are a number of situations where an investigation might not be the right solution.

For example, the matter could potentially be resolved by gathering facts and working with the practitioner collegially, through the peer review process, to achieve performance improvements.  In that case, resorting to formal investigation and “corrective action” procedures would not be necessary or warranted.

Note that in such a case, the precautionary suspension might be in place throughout the fact-gathering phase, while the peer review body considers the facts and develops a solution, and until such time as the practitioner completes any performance improvement activities.  This could be far longer than 14 days.

By way of further example, a precautionary suspension might be implemented because of several bad and unexpected outcomes experienced by a physician’s patients within a short period of time (e.g., three patients died this month, unexpectedly).  At the time the precautionary suspension is considered, you may have no idea why the unexpected and adverse outcomes have occurred.  In turn, the precautionary suspension could be deemed necessary to put a hold on things while the cause of those outcomes is determined.  In the end, resolving the matter might be as simple as consulting a few charts and talking to a few specialists to discover that these three patients were unusual in many regards and the outcomes, while unexpected, were not related to the care provided but, rather, to the unique circumstances of each patient.

Note that in this case, the precautionary suspension may be in place for only a few days.

In conclusion, precautionary suspensions serve the unique purpose of allowing the leadership to put things on hold – or implement a “pause” – while additional facts are gathered and an imminent risk is resolved.  They are unrelated to whether or not an investigation is underway and the mere implementation of a precautionary suspension does not dictate that an investigation be conducted.  Finally, there is no time limitation on precautionary suspensions, so long as your Bylaws or Credentials Policy language states that the grounds for precautionary suspension are imminent risk to the health of any individual.

(NOTE: Please consult counsel about situation-specific considerations regarding National Practitioner Data Bank reporting implications for precautionary suspension lasting more than 30 days.)

Question: Is a subpoena from a state board of medicine treated just like any other subpoena for purposes of the Health Insurance Portability and Accountability Act (“HIPAA”)?  In other words, is it true that the hospital can’t release a patient’s Protected Health Information to a state board of medicine unless it first takes certain steps, such as getting a qualified protective order from a court, or informing the patient?

Answer: No, a subpoena from a state board of medicine is not treated like any other subpoena for HIPAA purposes.  Protected Health Information (“PHI”) which is the subject of such a subpoena can be released to a state board of medicine without a qualified protective order or notice to the patient.  HIPAA provides that PHI may be disclosed to a “health oversight agency” for “licensure or disciplinary actions” necessary for oversight of the health care system.  (45 C.F.R. §164.512 (d).)  HIPAA also states that a state board of medicine is a “health oversight agency.”  (45 C.F.R. §164.501.)  That said, if certain categories of particularly sensitive information are involved (such as mental health, drug/alcohol, or HIV/AIDs), state law should be consulted to see if it offers greater protections to the information.