Question Of The Week

May 17, 2018

Posted on by hortyspringer

QUESTION:        We are analyzing the fair market value of what we pay our employed physicians.  How should we classify physicians who practice in more than one specialty?

ANSWER:            There is no definitive rule as to how a physician’s specialty should be classified for compensation or compensation analysis purposes.  For example, the MGMA Physician Compensation Survey directs survey respondents to list their specialty as the area where they spend 50% or more time.  Others may classify physicians into specific specialties based on their training or the specialty that the physicians hold themselves out in.

The Board certification of each physician is another criterion that can be used. In the end, specialty classification for compensation analysis purposes depends on the criteria used by those conducting the analysis.  The key is consistency.

As the Office of Inspector General stated in its Supplemental Compliance Guidance for Hospitals, that when analyzing physician compensation for compliance with the Stark law,

“hospitals should have appropriate processes for making and documenting reasonable, consistent, and objective determinations of fair market value.”
70 Fed. Reg. 4863 (Jan. 31, 2005). (Emphasis added.)

May 10, 2018

Posted on by hortyspringer

QUESTION:        We’re a hospital located in Pennsylvania and want to enter into a services agreement with a company in South Carolina.  The company has a good reputation, but has filed lawsuits against a few hospitals for breach of contract.  One of our concerns is that if the relationship doesn’t go well, it would be extremely expensive and disruptive to defend a lawsuit in South Carolina.  What can we do?

ANSWER:            You should make sure the agreement contains a “Choice of Law and Venue” provision that favors the hospital.  This provision states where a lawsuit is to be filed (venue), and which state’s law applies.  If the hospital drafts the agreement, it should give itself the home field advantage by stating that Pennsylvania law applies and any lawsuit is to be filed in courts having jurisdiction over the county in which the hospital is located.  If the company drafts the agreement, it will most likely give itself the advantage.  However, even if the company drafts the agreement, you can still try to negotiate with it so that the hospital has the advantage.  How the negotiations turn out is, of course, about leverage.

Home field advantage is huge too – the party that has it knows the state’s law, knows the judges, and knows the courtroom.  Also, the party with the advantage does not have to find local counsel to work with its in-house lawyers, or incur costs for itself and/or its lawyers by traveling to and from the location of the lawsuit (which can be an enormous cost and inconvenience in the case of extended litigation).

EXAMPLE CONTRACT LANGUAGE

Choice of Law and Venue

This Agreement shall be interpreted, construed, enforced and governed by and in accordance with the laws of the Commonwealth of Pennsylvania, with venue in the courts having jurisdiction over _______________ County, Pennsylvania.  The parties hereby consent to the jurisdiction of such courts.

May 3, 2018

Posted on by jwilbert

QUESTION:        We’re revisiting our on-call policy and we’re debating whether to set specific rules on physician response times.  Has CMS issued any guidance on this?

ANSWER:            Yes.  CMS advises hospitals to establish detailed, specific guidelines on physician response times.  In particular, CMS has said that a hospital would be “well?advised to establish in its on-call policies and procedures specific guidelines – e.g., the maximum number of minutes that may elapse between receipt of a request and the physician’s appearance for what constitutes a reasonable response time, and to make sure that its on-call physicians and other staff are aware of these time-sensitive requirements.”

This kind of agency guidance is not mandatory, but from a best practice perspective, we would encourage you to craft an on-call policy that follows this advice.  We recommend that you set a bright-line rule for acceptable physician response times.  The rule should be expressed in minutes.

You can carve out well-defined and carefully considered exceptions to the rule (so long as they are otherwise compliant with the law) if you want to allow for more flexibility.  The key is to have clear, detailed, specific guidelines in your policy.

April 26, 2018

Posted on by hortyspringer

QUESTION:        We have an orthopedic surgeon who is applying for appointment and clinical privileges at our system who has a troubling malpractice history.  Within the past five years, he has settled three malpractice claims ($190,000, $100,000, and $75,000).  He also has two other cases that are pending.  We are reluctant to grant him appointment.  At the same time, we are not sure if we have enough to deny his application. What should we do?

ANSWER:            Malpractice claims can be tough sometimes.  A single claim, standing alone, does not necessarily indicate a problem. However, multiple malpractice claims may reflect underlying issues pertaining to judgment, skill, communication, or behavior, all of which are relevant considerations for appointment and clinical privileges.

Furthermore, according to a study by the New England Journal of Medicine, only 4% of physicians had three or more malpractice claims.  The risk of recurrence of a malpractice claim increases with the number of previous paid claims.  Physicians who have three paid claims had three times the risk, or a 24% chance, of another paid claim within two years.  According to a Vanderbilt University study, physicians with past records of malpractice claims can be expected to have “appreciably worse claims experience” than other physicians in future years.

You can also review relevant data available from the National Practitioner Data Bank, which includes medical malpractice payments by practitioner type and state.  This may help to put your applicant’s malpractice history in perspective.  Malpractice history, including judgments and settlements, is also important because it could be used against the hospital in a negligent credentialing case if the physician were appointed and then subsequently was sued.

Therefore, before you move forward with the application, you should require the applicant to resolve the concerns raised by his malpractice history.  One way to review and assess the concerns would be to review the underlying malpractice cases through your peer review process or to use an expert from an external peer review organization for this purpose.  Since the burden of resolving questions about qualifications is on the applicant, the applicant should be responsible for providing a copy of the medical records from the malpractice claims.  The applicant would also be responsible for any costs associated with this review.

Remember to keep the burden on the applicant to resolve your concerns.  If the concerns cannot be resolved, you may determine that the application is incomplete and should not be processed.  Denying the application is a last resort that is almost never needed.

April 19, 2018

Posted on by hortyspringer

QUESTION:        Our hospital is accredited by the Joint Commission.  When we perform FPPE to confirm competence for new Medical Staff members, we typically evaluate the physician’s first five cases.  We’ve recently heard rumblings that this may no longer be acceptable.  What’s up?

 

ANSWER:            Based on recent reports from hospitals, it appears that Joint Commission surveyors are requiring hospitals to be more rigorous in how they perform FPPE to confirm competence.

The point of FPPE for new physicians is to confirm that a physician who looks good on paper (via the credentialing process) looks just as good in actual practice.  FPPE can have the added benefit of helping new physicians become familiar with the hospital (e.g., through conversations with proctors about standard operating procedures, etc.).

Evaluating a physician’s first five cases may not give the hospital a realistic view of the physician’s practice.  For example, if the physician is a general surgeon and those first five cases are all appendectomies, the hospital would have no confirmation of how well the physician performs other, unrelated procedures.

Fortunately, groups of privileges may require similar skills and judgment.  Thus, the evaluation of a practitioner’s ability to exercise one privilege may be used to confirm a practitioner’s ability to perform one or more other privileges.  These are sometimes referred to as “Index Privileges.”

Thus, while FPPE to confirm competence should generally include more than a physician’s first five cases, there’s no need to individually evaluate every privilege a physician has been granted.  Instead, hospitals can identify groups of privileges that require similar skills, and use those groupings to help them confirm that a physician is competent to perform all the privileges that have been granted.

 

April 12, 2018

Posted on by hortyspringer

QUESTION:        Our hospital believes that it has received Medicare Part A and Part B reimbursement to which it is not entitled.  Must the hospital immediately return the money that it owes?

ANSWER:            While the hospital must refund overpayments of Medicare Part A and Part B reimbursement to which it is not entitled, you have 60 days from the date in which you identify the overpayment to refund the money.  However, even the federal government understands that you must be given a certain period of time to accurately identify whether an overpayment has occurred and to quantify the amount of that overpayment.

The Affordable Care Act’s overpayment rule for Medicare Parts A and B went into effect on March 23, 2010.  However, final regulations were not published until February 12, 2016 (the “Overpayment Rule”).  (See, 42 C.F.R. §401.301 to §401.305.)  We should note that the Overpayment Rule described in this response is limited to Medicare Part A and Part B claims.  There is a separate overpayment rule for Medicare Part C and Part D claims.

The Overpayment Rule requires providers to repay any overpayments of Medicare Part A and Part B payments within 60 days of the overpayment being “identified.”  However, the Overpayment Rule does not define exactly when an overpayment has been “identified,” which has caused a certain amount of confusion as to when the 60-day repayment period begins to run.

The Preamble to the Overpayment Rule recognized that the “identification” process will take time.  CMS appears to want to afford providers a certain amount of flexibility and recognizes that part of the identification process is quantifying the amount of the overpayment, which requires a reasonable and diligent investigation.  At the same time, CMS expects providers to use “reasonable diligence” and stated that “a total of 8 months (6 months for timely investigation and 2 months for reporting and retaining) is a reasonable amount of time, absent extraordinary circumstances affecting the provider, supplier or the community.”  However, it should be noted that while this time period was discussed in the Preamble, CMS did not include it in the final Overpayment Rule.

The Overpayment Rule also makes it clear that the repayment period is six years from the date that the overpayment is received.  So, you should see if similar overpayments were made at any time during this six-year look-back period.  The Overpayment Rule then provides that a Self-Disclosure to either the OIG’s Self-Disclosure Protocol or the Stark Self-Referral Disclosure Protocol (“SRDP”) is an exception to the 60-day repayment obligation.  The Overpayment Rule states that if a provider makes a Self-Disclosure to either the OIG or CMS, then no overpayment is due the government until the Self-Disclosure has been resolved (despite the fact that it typically takes years to resolve a Self-Disclosure).

What is important to keep in mind is that once an overpayment has been identified, the hospital must act.  If the hospital knows, or should know, that it has received an overpayment, but fails to repay the overpayment within the 60-day period required by the Overpayment Rule, the hospital could be alleged to violate the False Claims Act.

April 5, 2018

Posted on by hortyspringer

QUESTION:        In regard to leaves of absence, our Medical Staff Credentials Policy says that practitioners’ clinical privileges will expire at the end of their natural term.  Is that right?  Can’t a practitioner be reappointed during the LOA?  I couldn’t find anything specifically addressing that anywhere, but we have a loyal and long-standing member of the Medical Staff who is out on leave and who is up for reappointment.  Are we supposed to kick him off of the staff and make him apply as an initial applicant after his medical leave is resolved?

 

ANSWER:            It is our advice that hospitals not reappoint members of the Medical Staff, or renew clinical privileges for a practitioner, while they are out on leave.  The reason is that when they are on leave, there is something about their situation that prevents them from practicing or fulfilling the duties of Medical Staff appointment and, in turn, hospital and Medical Staff leaders would need to learn about that situation and resolve any concerns (for example, the health status of the individual) prior to making any decision about their appointment and privileges.  For this reason, it makes sense not to process any reappointments while the individual is away.

We recommend that your Bylaws or Credentials Policy language regarding leaves of absence state that if membership or privileges expire while an individual is on leave, the individual may later submit an application for “renewal,” rather than being required to apply as an initial applicant at the time of reinstatement:

If a practitioner’s current membership and/or clinical privileges are due to expire during the leave, they will expire at the end of their natural term.  The practitioner will be required to submit an application for reappointment and/or renewal of clinical privileges as part of the reinstatement process.

Note that individuals whose membership and/or privileges expire while on leave are uniquely able to apply for renewal, rather than apply as initial applicants, despite having a lapse in appointment/privileges.  The distinction can, in some situations, be important (for example, for practitioners who have been grandfathered from meeting current board certification requirements, instead having to satisfy only those requirements in place at the time of their initial appointment).

As part of the renewal application (which would be processed at the time the practitioner applies for reinstatement), the individual should be asked to explain any outstanding concerns that arose in conjunction with the leave (e.g., health status, lapse of currency).

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.