Question Of The Week

September 24, 2015

Posted on by hortyspringer

QUESTION:        One of the few remaining independent physician groups whose physicians are members of our medical staff desperately needs help. They have been unable to find a physician who is willing to relocate, but have found several qualified non-physician practitioners who are. The group has approached the hospital requesting the same type of net income guarantee recruitment assistance agreement that the hospital would offer to the group if they had located a physician. Since it will be less costly to provide the recruitment assistance needed to recruit a non-physician practitioner, this seems like a simple decision. However, our attorney is telling us that the proposed arrangement violates the Stark law. How?

ANSWER:          Unfortunately, your legal counsel is correct. The Stark law only applies to physicians. A PA, CRNP, CRNA, or other non-physician practitioner (“NP”) is not a “physician” as defined by the Stark law. So the Stark law would not apply to a direct compensation arrangement between the NP and the hospital.

However, that is of little practical benefit if the request is for an income guarantee. By definition, the hospital must, directly or indirectly, pay the guarantee payment to the physician group. This creates a compensation arrangement between the hospital and the group and so in order to comply with the Stark law, this arrangement must satisfy an exception. Unfortunately, in the Preamble to the Stark Phase 3 Rules, in response to a comment asking whether recruitment assistance could be provided to a group to recruit an NP, CMS responded by stating that the physician recruitment exception is limited to the recruitment of a physician. CMS then stated that any recruitment payments made by a hospital to a physician group to assist the group to recruit an NP would constitute a compensation arrangement “to which no exception would apply.”

We have never understood CMS’s position and now it appears that CMS has seen the error of its ways. In the July 15, 2015 Federal Register, CMS proposed creating a new exception to the Stark law that would specifically permit a hospital to provide recruitment assistance to a physician group to employ an NP.

While a positive step, there are a number of concerns with the proposed exception. As proposed, the new exception is much more limited than the physician recruitment exception. For example, it limits the exception to PAs, CRNPs and certified nurse midwives who are employed by a physician group to provide primary care services. It also limits the type of recruitment assistance that may be provided.

In comments that we submitted to CMS, we requested that CMS revise this exception to make it less restrictive and more in line with the physician recruitment exception. Whether CMS will agree with our comments remains to be seen when it publishes final regulations.

Therefore, the safest course of action right now is to provide the recruitment assistance directly to the NP. However, current law does not permit a guarantee-type arrangement with a physician group to recruit an NP. As a result, we have found the types of recruitment assistance that are currently permitted to be used with an NP to be very limited. If you have the luxury of time, a better approach would be to wait and see if CMS publishes the proposed NP recruitment exception in final form and then follow that exception.

The $115,000,000 settlement described in the “Your Government at Work” section of this week’s HLE was, for the most part, due to the compensation paid to employed physicians. Want to learn more about the types of compensation that can be paid to employed physicians? Join Henry, Rachel and Charlie in Las Vegas on October 15-17 at the Physician Employment Institute.

September 17, 2015

Posted on by hortyspringer

QUESTION:        Our MEC recently commenced an investigation regarding a practitioner with a long history of behavioral incidents. The MEC has decided to conduct the investigation itself. Who should be present for the investigation? All of the people normally present at MEC meetings? Only members of the committee? Only voting members of the committee?

ANSWER:           If the MEC has decided to undertake a task, the whole committee can and should be involved. This means all members of the committee, including any individuals who are members by virtue of their position (i.e., ex officio members) and regardless of whether those members are physicians or have voting rights. Members are members because they have a valuable role to play (sometimes, providing expertise or information or administrative support for the committee). Take advantage!

Individuals who often attend MEC meetings as guests, but who are not members, may be excluded from investigations or other sensitive matters, if that makes sense. For example, if the investigation involved a psychiatrist, there would probably be no reason to have the director of the OR or the nurse manager present for the investigation, even if those individuals routinely attend MEC meetings as guests.

Medical Staff Services professionals and other administrative support persons, on the other hand, are often asked to attend and be involved in the MEC’s investigation because they may be able to offer valuable support to the committee as it proceeds (including offering support regarding the terms of the Bylaws, the contents of the practitioner’s credentialing and peer review files, keeping minutes, coordinating meetings, and assisting in drafting or coordinating the drafting of documentation regarding the investigation process – such as interview summaries).

September 10, 2015

Posted on by hortyspringer

QUESTION:        Our hospital is doing a HIPAA security risk assessment and was told we have to follow guidance issued by the National Institute of Standards and Technology (“NIST”). Is that something we have to do?

ANSWER:            No. You can use the NIST publications as a guide, but you don’t have to. The HIPAA Security Rule itself does not reference the NIST guide at all, although some NIST documents are mentioned in the Preamble to that rule. The HHS Office of Civil Rights has published several papers providing useful guidance on complying with the security rule, which can be found at http://www.hhs.gov/ocr/privacy/hipaa/administrative/securityrule. In one of them, OCR says:

Although only federal agencies are required to follow federal guidelines like the NIST 800 series, non-federal covered entities may find their content valuable when performing compliance activities. As stated in the CMS frequently asked questions (FAQs) on the HIPAA Security Rule,

“Covered entities may use any of the NIST documents to the extent that they provide relevant guidance to that organization’s implementation activities. While NIST documents were referenced in the preamble to the Security Rule, this does not make them required. In fact, some of the documents may not be relevant to small organizations, as they were intended more for large, governmental organizations.”

The Security Rule does not prescribe a specific risk analysis or risk management methodology. This paper is not intended to be the definitive guidance on risk analysis and risk management. Rather, the goal of this paper is to present the main concepts of the risk analysis and risk management processes in an easy-to-understand manner. Performing risk analysis and risk management can be difficult due to the levels of detail and variations that are possible within different covered entities. Covered entities should focus on the overall concepts and steps presented in this paper to tailor an approach to the specific circumstances of their organization.

Therefore, while the NIST publications might help you in doing the risk assessment, they are not binding on you.


 

September 3, 2015

Posted on by hortyspringer

QUESTION:        As Chief of Staff, I have been involved in several collegial interventions with an employed physician who is an outlier in clinical care and behavior. HR has been addressing the behavior and our Multispecialty Peer Review Committee has been reviewing his quality concerns. He is now claiming that this is double jeopardy – does he have an argument?

ANSWER:           As more physicians become employed by hospitals and their affiliates, physician leaders often collaborate with the management team (typically led by the Chief Medical Officer in these situations) to “triage” an issue and determine whether it makes sense to proceed through the medical staff process, the HR process, or a hybrid of the two. Regardless of what route is chosen, it is not “double jeopardy” (a term used in criminal law and thus not applicable). Rather, leaders assess which route makes most sense under the circumstances. There are a number of factors that may cause leaders to use one or the other – or even both – options. Information-sharing policies are increasingly being adopted to facilitate keeping both physician leaders and the management team in the loop, while maximizing peer review protection. Professionalism policies can guide leaders to use progressive steps to address behavior issues. Peer review policies (often called “Professional Practice Evaluation” policies in Joint Commission and HFAP accredited hospitals) can similarly provide steps for collegial intervention, Focused Professional Practice Evaluation and performance improvement plans.   There is no absolute right or wrong approach – if the physician is cooperative, leaders can seek to engage the physician in committing to performance improvement on both fronts based on their assessment of all the factors. The HR process may be better suited to address behavior issues and the medical staff peer review process to address clinical concerns. Both processes should develop documentation of the progressive steps. This will support the reasonableness of the steps taken.

For a discussion of these and related issues, tune into our “Employed Physician Peer Review: Maximizing Performance and Protection” audio conference on October 6, 2015 – 1:00 p.m. to 2:00 p.m. (ET). Join Phil Zarone and Charlie Chulack as they discuss the various concerns regarding hospital-employed physicians and how best to move forward so that the hospital is protected and performance is maximized.

And join Charlie Chulack, Rachel Remaley and Henry Casale for the Physician Employment Institute in Las Vegas on October 15-17 where all of our other seminars will be offered – please join us – and bring a team!

August 27, 2015

Posted on by hortyspringer

QUESTION:        We have several physicians who are chronic outliers in medical record completion. They are all good clinicians and a few are in specialties that we really need here, but it’s getting to the point where it’s affecting continuity of care and, quite honestly, the hospital’s bottom line. What is the best way to deal with this?

ANSWER:            It’s pretty much a guarantee that on every medical staff there will be a handful of outliers in this area, meaning physicians who are chronically late or incomplete with medical recordkeeping. Traditionally, the medical staff response to those situations has been to “automatically suspend” the physicians, although we believe the term “automatic relinquishment” is a more appropriate way to describe the situation.  Calling the physician in to meet with the MEC sometimes works because it is hard to look colleagues who are every bit as busy as you are in the eye and explain why one physician can’t do what everyone else is expected to do.

Some organizations have tried not insignificant monetary fines which must be fully paid for the physician to remain eligible for appointment to the medical staff. A few organizations have even tried the imposition of additional emergency call for those physicians who are chronic outliers. It is clear that medical recordkeeping requirements must be enforced, for many regulatory, legal, accreditation and patient care reasons. In the current era of physician employment, the employer likely has additional “enforcement mechanisms” available under the contract.

August 20, 2015

Posted on by hortyspringer

QUESTION:        Our organization’s delineation of privileges (“DOP”) form includes a laundry list of over 200 procedures. We want to move to a core privileging model for each specialty but need some direction on the best way to get started. We are especially concerned about how to address procedures that are done infrequently and/or not specifically listed in the core.

ANSWER:           Many hospitals have moved to “core” privileges and many have struggled with how best to address these types of questions. For a while, many organizations defined their cores somewhat vaguely to be, essentially, anything the physician would have learned in residency training. However, CMS and the Joint Commission let it be known that they did not like this form of core privileging because nobody really knew exactly what the physician was permitted to do. As CMS stated in a 2004 memo, “[s]pecific privileges for each category must clearly and completely list the specific privileges or limitations for that category of practitioner.”

As such, the guidance from CMS and the Joint Commission makes it clear that core privileging cannot be used to avoid the need to identify the specific tasks a physician may perform. Instead, core privileging is a way of grouping privileges based on a determination by the hospital that all the privileges in the group require similar education, training and experience.

What does this mean for those procedures outside of the core? Typically, we see these procedures identified as “special privileges,” meaning that any procedure that falls outside of the core will be included in a list of individual procedures that can only be requested if applicants can show that they have the required additional education, training, and/or experience beyond that required for the core in their specialty.

This means organizations must first decide what is in the core and what special procedures fall outside the core and then develop criteria for both.

This is an example of the types of questions you can ask our lawyers when you attend The Credentialing Clinic, which is being offered in Las Vegas this fall, Naples this winter, and San Antonio in the spring.

Click here to learn how you can join us for this interactive course.

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

Posted on by hortyspringer

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

Posted on by hortyspringer

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

Posted on by hortyspringer

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.