QUESTION:      We are seeing a steady flow of locum tenens physicians come through our hospital in specialties where physicians are in short supply. Many of these physicians are here for months…sometimes even years! What options do we have when we are granting these privileges? Is the traditional “temporary privileges” approach to privileging enough for these physicians?

ANSWER:       While locums may come and go, the fact that all clinical privileges carry the same legal obligations and implications remains.

Because we see more and more locum physicians filling long-term vacancies, the hospital and medical staff leadership need to anticipate this reality and determine whether the expedited, abbreviated credentialing process that has traditionally been used for temporary privileges is enough. From our experience, more and more hospitals and medical staffs are deciding that it is not.

Those facilities are adopting a more robust credentialing process for locum physicians, typically taking these requests for privileges through the full medical staff process, and recredentialing their locum physicians on an annual or biennial basis. While this requires more of the medical staff’s time, energy, and resources, these medical staffs have decided that the benefit of ensuring the quality of care being provided and whether there is a continued need for the locums outweighs this administrative burden.

These are among the issues that Susan Lapenta and Ian Donaldson will discuss during their audio conference on February 3, 2015, “Locum Tenens, My How You’ve Changed: New Rules for the New Roles of Long-Term Locum Tenens Providers.” Please join us by registering here.

QUESTION:     We’ve heard that the federal government issued new regulations regarding hospital financial assistance policies. Is this true?

ANSWER:     Yes. The federal government issued proposed regulations governing financial assistance policies on June 26, 2012. The IRS stated in Notice 2014-2 (January 13, 2014), that hospitals will not be required to comply with the proposed regulations “until such regulations are published as final or temporary regulations.”

“Until such regulations are published as final…regulations” became reality on December 31, 2014. The new regulations govern tax-exempt hospitals’ financial assistance policies, limitation on charges and billing and collection procedures as well as community needs assessments.

Missed the Audio Conference? It’s Not Too Late…

Happy New Year from the IRS!
New Rules for Tax-Exempt Hospitals

Recorded:  January 21, 2015

While you were getting ready to celebrate New Year’s Eve, the folks at the IRS delivered a New Year’s gift that will keep on giving. They issued final regulations regarding the requirements for charitable hospital organizations added by the Affordable Care Act.

These final regulations replace previous guidance on these requirements and are 64 pages long. As you might expect with the IRS, the Devil is in the details. The regulations are chock-full of new rules governing billing, collection, financial assistance and community needs assessment.

To help you navigate through this maze and avoid its many traps for the unwary, Horty Springer partners Henry Casale and Dan Mulholland will present a special audio conference on January 21, 2015 at 1:00 pm ET. Be sure to join them to learn about the new rules before they come back to haunt you.

Register/More Information

QUESTION:      Our state, probably like most, requires a criminal background check. Our employed physician group has hired a badly needed primary care physician to serve in one of our more rural clinics. When his application was submitted for medical staff appointment, the report of the background check stopped the process cold. It listed arrest for “minor” infractions, such as assault and disorderly conduct.

The employer insists that the physician’s application be processed timely, as he was scheduled to start in the clinic on January 1. The medical staff process requires that we follow up on unusual information in an application. The applicant is claiming that the hospital is “interfering with his contractual relationship.” This has exacerbated the rift between HR and the medical staff. I thought we were all on the same team? What now?

ANSWER:     With notable exceptions to be sure, the HR/medical staff disconnect, when it comes to employed physicians, has been more perplexing than it needs to be. Medical staff professionals and physician leadership are increasingly very well trained credentialers. They “get it” that credentialing is a duty owed to the patient – to assure that those who are selected to practice in the organization are well qualified to do so safely and competently. They know how to follow up on unusual or problematic questions, circumstances or blanks in an applicant’s background. Their mantra is “the burden is always on the applicant” to demonstrate that he or she qualifies.

Issues such as yours require follow-up, to determine if the arrest was the result of one awful and regretted event or a manifestation of a larger problem.   In addition to the duty to the patient, the medical staff and leadership know very well that there is also a duty to treat the applicant fairly. In this case, that might involve requiring the applicant to provide a complete explanation and documentation of the incident for further assessment.

Some employers of physicians have not caught up to this duty and process. They often have different objectives, such as making sure the clinic is staffed timely.

This is an easy fix, except when you are in the middle of it. The necessary process is that the recruiters, those who hire in the employed physician group and HR must have access to the same excellent education your medical staff professionals have. The “threshold qualifications” for employment and appointment must be coordinated. The employed physician group and HR may create a structure, whether a CVO or some other contractual relationship, to employ the expertise of the Medical Staff Office in the assessment of applicants.

Employment itself never qualifies a physician for medical staff appointment or clinical privileges. Ever.

QUESTION:     Can our hospital’s Institutional Review Board (“IRB”) be structured like and function as a medical staff committee?

ANSWER:     No. The federal Food and Drug Administration regulations pertaining to IRBs, 21 C.F.R. §56.101 et seq., define an IRB as “any board, committee, or other group formally designated by an institution to review, to approve the initiation of and to conduct periodic review of biomedical research involving human subjects.” The Department of Health and Human Services’ regulations echo the “institutional” aspect of the formal designation of IRBs (45 C.F.R. Part 46). Federal regulations require the IRB to be a committee formally designated by a hospital’s Governing Board to review biomedical research involving human subjects at the hospital.

This issue has been gaining momentum lately in research audits performed by both the Office of Human Research Protections and the Food and Drug Administration in which the agency takes issue with the fact that the institutions included their IRBs as one of several “medical staff committees” that lived in a medical staff governance document like the bylaws. The auditors pointed generally to the language cited above, that it is an institutional responsibility to maintain an appropriate IRB, not a medical staff responsibility. As a practical matter, the concern is that (however unlikely) if the IRB procedures need to be revised because of a regulatory change, the medical staff may refuse to do so, as is contemplated by the amendment process to these rules. By comparison, if the IRB is a hospital committee, hospital administration and/or the Board could implement a change on its own action. Again, while the likelihood of a Medical Executive Committee or a medical staff as a whole acting in such an obstructionist manner is very slim, in the eyes of the audit agencies, it is a valid concern.

Therefore, we recommend that the IRB be created by a Board resolution and thereafter function as a committee of the hospital, rather than the medical staff, with its independent authority derived from the Board. For this reason, a medical staff committee should not act as the IRB. There may be substantial overlap of the IRB membership with that of a medical staff committee. However, the IRB should be constituted as a separate committee of the Board in accordance with the membership requirements set forth in the federal regulations.

QUESTION:    We would like a hospital employee to obtain a daily list of admissions, review the patient’s medical record to determine if the patient might benefit from rehab services offered by the hospital, and contact the patient if rehab is indicated. Is this permitted, or would it violate HIPAA’s “marketing” rules?

ANSWER:    This practice would be permitted by HIPAA. Under HIPAA, “marketing” means “to make a communication about a product or service that encourages recipients of the communication to purchase or use the product or service.”

However, HIPAA includes a number of exceptions to this definition of marketing. Under HIPAA, the following activities are not “marketing” (as long as payment is not made to the entity for making the communication):

1. “case management or care coordination for the individual, or to direct or recommend alternative treatments, therapies, health care providers, or settings of care to the individual”;

2. “to describe a health-related product or service (or payment for such product or service) that is provided by, or included in a plan of benefits of, the covered entity making the communication”; or

3. “case management or care coordination, contacting of individuals with information about treatment alternatives, and related functions to the extent these activities do not fall within the definition of treatment.”

Calling a patient to discuss the rehab services offered by the hospital satisfies the exception to the definition of marketing. Thus, such calls would not violate HIPAA.

QUESTION:        Our state law says that employers may not make hiring decisions based on criminal convictions unrelated to the employee’s suitability for a particular job. What makes a person suitable for practicing medicine?

ANSWER:        There is not a single, fully-accepted answer to your question. Accordingly, in order to comply with your state law, you will have to use your professional judgment to define the types of crimes that are related to practicing medicine.

At least one court has held that conviction of any felony is a legitimate consideration when looking at the qualifications of a physician for Medical Staff appointment or clinical privileges (See Bouquett v. St. Elizabeth Corp. (Ohio 1989), holding that the “best interest of patient care encompasses more than technical skills and professional competence. It includes the perceived integrity of the physician which becomes suspect after he has been convicted of a felony.”) But, that case was not decided recently and with the passage of time may have lost a bit of its persuasive authority, especially since the modern trend is to more significantly limit the consideration of criminal background.

A number of health care organizations have begun to think through the issue of job?related crimes – and, in assisting them, we have come up with a short list of criminal activity that is pretty obviously related to the practice of medicine:

• crimes related to violation of the state’s medical practice statute
• crimes related to possession or distribution of controlled substances
• insurance or health care fraud and abuse
• violence
• sexual assault
• abuse of a member of a vulnerable population (child abuse, elder abuse, etc.)

Some employers choose to limit consideration of criminal activity temporally (a practice that is strongly encouraged by the EEOC). For example, you may choose to consider only those crimes occurring in “the past 7 years” or “since the commencement of medical training.” Of course, you should work with your counsel to ensure that any time frame you choose is consistent with your state’s laws.

Finally, also consider incorporating mitigating factors into any examination of an applicant’s criminal background. For example, while a conviction or plea of guilty or no contest might result in automatic elimination from consideration with respect to some crimes, for other crimes, you might examine the circumstances of the crime on a case-by-case basis, along with the following factors:

• The nature of the conviction
• How closely the actions of the applicant, with respect to the crime, bear on his or her ability to safely practice medicine
• The time elapsed since the conviction
• The applicant’s age at the time of conviction
• Evidence that the applicant has rehabilitated himself or herself
• Evidence that the applicant has been practicing medicine since the conviction, without additional incident

For more details on employment trends affecting physician employment and hospital?physician relations, please join us January 15-17 for the Institute on Employed Physicians and Their Impact on the Medical Staff. We will discuss criminal background checks, the EEOC’s guidance on how to lawfully consider criminal background during the hiring process, and many other interesting issues. Consult the brochure for more information about the program.