QUESTION:    In the January 2, 2014 Question of the Week, you discussed the Bundled Payments for Care Improvement initiative, which was developed by the CMS Innovation Center. In Model 2, the participants were “live” and in the risk-bearing period (“Phase 2” – actual expenditures on beneficiaries were reconciled against a “target price” for an episode of care – if a participant was under the target price for a beneficiary, it kept the difference, but if over the target price, pays the difference to CMS). Can you update us on Model 2, Phase 2?

ANSWER:    Yes. In November, CMS announced that it would eliminate downside financial risk for 2014 for all participants in Phase II because of complications associated with launching BPCI. The elimination of downside financial risk means that hospitals will not have to pay back CMS for losses, nor will hospitals have any financial liability for the rest of 2014. However, hospitals will still be able to earn gains if their aggregate spending falls below the aggregate target price amounts during 2014. However, as of the first quarter of 2015, all BPCI participants in Phase 2 will face full downside risk.

QUESTION:      We’ve had some debate over who can order therapeutic diets. Can you help explain the rules on this issue?

ANSWER:      Historically, CMS has restricted the ability to order therapeutic diets to “practitioners responsible for the care of the patient.” This generally meant physicians. However, in its Final Rule dated May 12, 2014, CMS changed its position on this matter, and revised 42 C.F.R. §482.28(b)(2) to read “All patient diets, including therapeutic diets, must be ordered by a practitioner responsible for the care of the patient, or by a qualified dietician or qualified nutrition professional as authorized by the medical staff and in accordance with State law governing dieticians and nutrition professionals.” (Emphasis added.)

This change came about largely in recognition of the fact that registered dietitians are trained to order patient diets independently, without requiring the approval or supervision of a physician. In order to give hospitals more flexibility in this area, CMS noted that “[i]n order for patients to have access to the timely nutritional care that can be provided by [registered dieticians], a hospital must have the regulatory flexibility either to appoint [registered dieticians] to the medical staff and grant them specific nutritional ordering privileges or to authorize the ordering privileges without appointment to the medical staff, all through the hospital’s appropriate medical staff rules, regulations, and bylaws.”

While it is unlikely most medical staffs would elect to make dieticians full members, CMS does indicate that in order for a dietician to order patient diets independently, clinical privileges must be granted and monitored by the medical staff.

Of course, your state law may still limit a dietician’s scope of practice, so be aware of any restrictions at the state law level.

For answers to more of your credentialing and privileging questions — including those related to allied health professionals — please join us for The Credentialing Clinic or contact us about having The Credentialing Clinic come to you!

 

QUESTION:    Nationally, what are you seeing with regard to the composition and structure of Medical Executive Committees and what is the national norm regarding term limits for Department Chairs?

ANSWER:    In many hospitals, the Medical Executive Committee (“MEC”) has become unwieldy and ineffective. One trend we are seeing is an effort to re-engineer the MEC and reduce the number of physician members and hospital/administrative representatives. The goal is to create a more nimble, effective body that can respond promptly to the challenges facing the Medical Staff and the Hospital, and also be a forum for thoughtful discussion, planning, and action.

Seven to nine members is considered by many leadership gurus to be the “best practice”/optimum size for leadership committees and professional boards in order to conduct efficient operations and promote thoughtful discussion and action. An article in the Harvard Business Review observed that research on group dynamics indicates that, in larger groups, members “cease to take personal responsibility for the group’s actions and rely on others to take the lead.” Large groups also “inhibit consensus building.”

As another trend, the “agendas” for MEC meetings are being re-evaluated to be sure that the issues that truly need discussion and planning take precedence over the important – but more “routine” and ongoing – agenda items that appear each month. Consent agendas are definitely on the rise!

Finally, we are seeing that many MECs (and all Medical Staff committees really) benefit from having the expectations and requirements for committee service explicitly articulated and shared with the committee members, prior to their service. While many of the principles are common sense, we are finding that making them explicit helps MECs (and other committees) function better.

The most common “term of service” we are seeing nationally for Department Chairs is still two years and reappointment for additional terms is generally permitted. But increasingly, the initial term is lengthened to three years in order to permit more leadership development and effective functioning.

In many hospitals, Department Chairs are no longer elected by members of the Department. Rather, there is  a “Nominating/Leadership Development Committee” that is responsible for not only nominating candidates for Medical Staff office, but also selecting committee chairs and members and Department Chairs, after obtaining feedback from others. This requires a lot of education with the Medical Staff, but this model has proven to be very effective in improving the quality of overall Medical Staff leadership.

QUESTION:   A current staff member wants to bring in another physician to his practice, in a specialty we really need. However, this candidate was terminated from the medical staff of another hospital and is suing that hospital. His attorney assures him that he will win. We have asked for more information, but that hospital won’t provide any documents in light of the litigation. What can we do?

ANSWER:     This application should be held incomplete until you have full information. The candidate has the burden of providing all information needed for an evaluation of qualifications. A hospital must exercise reasonable care in assessing the qualifications of all applicants. The candidate and his counsel can provide you with all documents they have, so at least you can assess the basis for the termination. Dire need is not the only consideration! And, the physician’s attorney’s assessment of the likelihood of prevailing is not something that you can rely on to satisfy your organization’s responsibility. This application should remain incomplete until you have sufficient information to determine whether this applicant should be appointed with conditions, or not appointed. If you don’t get everything you need, keep the application incomplete! At the very least, you can obtain the Complaint, Answer and any motions and briefs pending in court.

 

To help deal with such situations in the future, consider adding to your threshold eligibility criteria a requirement that applicants have no history of adverse actions at another hospital. Granting an occasional waiver to such a criterion when an applicant can show exceptional circumstances and equivalent qualifications is a better option than spending valuable time and energy assessing the circumstances that led another organization to terminate. A termination is rare and is a major red flag.

QUESTION:    Our hospital uses a team of hospitalists who provide care for all internal medicine admissions. This has been a successful program; quality of patient care and patient satisfaction have markedly increased. The problem is that now we have a number of internists appointed to the medical staff who very rarely, if ever, come to the hospital, however they still have clinical privileges. This brings up problems during reappointment in being able to assess current clinical competence. Any solutions?

ANSWER:    Reappointment, when it includes the renewal of clinical privileges, is to be a “performance-based reappraisal,” which does become harder if you have little clinical data. If an internist is appointed at another hospital, you can request the physician’s quality file from a hospital where he or she is more active, obtain peer evaluations that incorporate the six ACGME general competencies from physicians to whom referrals are made (including the hospitalists), and also, possibly, seek managed care quality profiles. You could request office records from the physician to review as well, although not many medical staffs seem to take that approach because of how onerous it is for a physician who no longer provides services at the hospital.

The approach that many medical staffs and hospitals have taken in the recent past is having a staff category that does not include clinical privileges – Ambulatory Care Staff or Community-Based Staff – which includes perks like being able to access patients’ electronic records and being able to have office H&Ps entered into the record, while not granting clinical privileges which gets the hospital off the hook for performing OPPE, FPPE and needing to assess clinical data at reappointment.  Because so many physicians are transitioning to such staff categories from the Active Staff due to changes in clinical practice patterns, we are also seeing a move towards permitting these individuals to vote and serve in leadership roles as part of the desire to keep them connected to the hospital.

 

Question:    Under the Americans with Disabilities Act (“ADA”), are we permitted to disclose information about the disability of a physician previously employed by us in response to a reference request from a prospective employer that seeks information on the ability of the physician to perform the functions of his anticipated position?

Answer:    If the information about the physician’s disability was obtained through a “medical examination or inquiry,” the answer is “no.” Under the ADA, any information obtained regarding the medical condition or history of an employee as a result of a “medical examination” or “medical inquiry” must be “collected and maintained on separate forms and in separate medical files and is treated as a confidential medical record.”

This statutory rule contains several exceptions which permit disclosures of the information to: (1) supervisors and managers regarding necessary restrictions on the work or duties of the employee and necessary accommodations; (2) first aid and safety personnel, when appropriate, if the disability could require emergency treatment; and (3) government officials investigating compliance with the ADA. However, none of the exceptions encompass disclosure of information obtained through a medical examination or inquiry on an ex-employee’s disability in response to a reference request.

At least one court has concluded that information about an ex-employee’s health disclosed in response to a reference request was not a violation of the ADA if the information was not obtained through a medical examination or inquiry. In EEOC v. Thrivent Financial for Lutherans, the United States Court of Appeals for the Seventh Circuit found that an employer did not violate the ADA by informing a prospective employer that the ex-employee suffered from migraine headaches. This information was obtained when the former employer contacted the ex-employee after he failed to show up for work and did not notify anyone. The court concluded that the contact was not a “medical inquiry.” As such, the information obtained about the ex-employee’s migraine headaches was not subject to the confidentiality provisions of the ADA.

Nonetheless, employers should tread carefully in this area. Other laws may come into play, such as the Health Insurance Portability and Accountability Act (“HIPAA”), especially if the employer is a health care provider and the health information of the employee was obtained during treatment provided by the employer.

For more information on the ADA and effectively managing health issues of employed physicians, please join Henry Casale, Rachel Remaley, and Charles Chulack for the Institute on Employed Physicians and Their Impact on the Medical Staff from December 4 – 6 in New York City, New York.

QUESTION:  While conducting routine verification of an application for appointment, we learned that the physician applicant may have been involved in a couple of behavioral incidents at another hospital. We asked the physician to obtain that hospital’s peer review file so that we can consider it as part of our credentialing process. Stating that its file is confidential and privileged, the hospital has refused to release a copy and will not provide any information other than a statement that the physician is “in good standing, with no pending adverse actions.” Since this matter is outside of the physician’s control, should we just accept the physician’s version of the behavioral incidents and move forward with the credentialing process? What choice do we have?

ANSWER:     The situation that you describe is, unfortunately, not too uncommon. Many hospitals are so averse to litigation that they are unwilling to be forthcoming with references and/or information from practitioners’ peer review files. This is unfortunate, since that information is necessary for credentialing by other organizations.

First and foremost, what you need to know is that applicants have the burden of demonstrating that they are qualified in all regards for Medical Staff appointment and the clinical privileges they are requesting – and you do not need to continue processing the application until you receive whatever information is necessary to resolve any concerns that have been raised about the applicant. (Of course, we recommend that you have good bylaws language that outlines all of these principles and that clearly delineates when an application is “complete” and ready to be processed.)

Understanding that the burden is on the applicant, many credentialers make the mistake of believing that their hands are tied in a situation such as this and that they cannot process the application without obtaining the full credentials and peer review files. This is not the case. Leaders have the discretion to determine, based on the facts at hand, the information that is necessary to resolve a concern. In some cases, that may mean obtaining the full peer review file. In other cases, it may suffice to resolve the concern through other means.

For example, consider asking the physician applicant about the incidents. He or she may be able to offer an explanation that would satisfy your concerns (for example, the applicant might admit that the incidents occurred and provide a believable explanation of the steps the physician has taken to prevent a recurrence). If the applicant provides an explanation of the behavior incidents that is either unbelievable or contrary to other information you have received, then, of course, his or her explanation would not suffice and you would want to look for other information to resolve the concern.

You may also choose to speak with others who might have information about the incident.

Or, if the incidents raise specific concerns about the physician’s behavior (for example, the ability to get along with nurses), you might speak with others who have general knowledge of the physician’s behavior (in this case, nurses or nurse supervisors).

In some cases, you may not be able to use alternate sources of information to resolve concerns about an applicant. It may be that the alleged incidents are simply too grievous to be resolved through anything less than the full peer review file of those incidents.

Further, you may need to see the actual peer review file for verification of the facts if the applicant’s veracity is called into question (for example, he or she has been “caught” making omissions or misrepresentations during the application process).

As you can see, credentialing is not black and white. Join us at The Credentialing Clinic this fall to learn more about exercising your leadership discretion in a responsible way as you wade through the sometimes gray credentialing process.

QUESTION:    One of our older surgeons had several very bad cases right in a row. Medical Staff and Hospital leadership were very concerned and, after a lot of discussion, we decided we could not let the surgeon practice until we had completed a focused review. We asked the surgeon to “agree to refrain from exercising her clinical privileges” while we completed the focused review, but she refused. We then imposed a precautionary suspension. A week later, the surgeon resigned. We had not commenced an investigation so we weren’t sure if we had to report the resignation to the National Practitioner Data Bank (“NPDB”).

 ANSWER:     You are correct in thinking about whether an investigation was started with respect to your reporting obligation to the NPDB. The Health Care Quality Improvement Act (“HCQIA”) imposes an obligation on hospitals to report professional review actions that adversely affect the clinical privileges of a physician for a period of longer than 30 days. The HCQIA also requires a hospital to file a report if it accepts the surrender of clinical privileges “while the physician is being investigated…relating to possible incompetence or improper professional conduct or…in return for not conducting such an investigation.” So, clearly, if the physician had resigned during an investigating or in return for not conducting an investigation, the resignation would have been reportable to the NPDB.

In your situation, even though there was no investigation, the physician’s clinical privileges had been precautionarily suspended. The NPDB Guidebook specifically addresses the reportability of resignations that occur during a suspension. According to E-20 of the Guidebook: “If the physician, dentist, or other health care practitioner surrenders his or her clinical privileges during a summary suspension, that action must be reported to the NPDB.” Therefore, even though the surgeon did not resign during or in lieu of an investigation, the surgeon’s resignation while under a precautionary suspension must be reported to the NPDB. It is also important for you to check state law. You may have a separate obligation to report the resignation under state law.

QUESTION:    Sovaldi is a new Hepatitis-C drug that is remarkably effective with a 90% cure rate. In comparison, existing medications have roughly a 50% effective rate. The problem is that Sovaldi is also remarkably expensive, $1,000 a pill with a typical 12-week, 84-pill course. As a hospital, should we add Sovaldi to our approved medications list?

ANSWER:     Whether it’s called appropriate use of resources, having to put limits on health care spending, or health care rationing, this is an issue that can’t be avoided, and it will come up with expensive medications yet to come. And, no, it is not fair when some people can afford Sovaldi or the platinum health insurance that will pay for it, while others cannot. Of course, there are ethical issues involved. In some ways, this is an issue to be addressed by a hospital’s ethics committee as much as a pharmacology committee or a committee that addresses purchases of medical devices, drugs and inventory (and so their costs).

A recent article in Modern Healthcare stated that the drugs Sovaldi and Olyio are projected to cost Medicare up to $5.8 billion in 2015. The Illinois Department of Health Care and Family Services (DOH) went on record as to its own decision-making concerning Sovaldi and its Medicaid coverage. As per the DOH, in 2013, Illinois spent $6.7 million for all of its Hep-C therapies. In the first six months of 2014, Illinois spent more than $16 million on Sovaldi.

The DOH established 25 criteria that have to be met in order for Illinois to fund the use of Sovaldi. As described by the DOH Medical Director: “I am torn. On the one hand, I recognize that everybody should be able to get reasonable medical services without thinking of cost when they are sick. Life is much more precious than that. On the other hand, if we decide that the cost does not matter because someone else is paying for it, then we’ve become irresponsible and irrational.”

Interestingly, a similar debate arose earlier this year when Zaltrap, a new cancer drug, was recently approved by the FDA. Zaltrap is much more expensive than the other medications used. Memorial Sloan?Kettering Cancer Center decided not to carry the drug because of its cost and its effectiveness as compared to other existing, less expensive medications. MSK went on record with an editorial in The New York Times to explain its position.

These questions are never going to go away. But that doesn’t mean the answers are easy to come by, either.

QUESTION:    We can find an e-mail exchange between our hospital and a referring physician that discussed a personal services agreement that satisfies all of the requirements of the Stark Law except for the requirement that the agreement is to be signed by both parties. The e-mail exchange shows that the parties agreed on the terms of the Agreement. Can the e-mails be used to satisfy the Stark signature requirement?

ANSWER:    The personal services and fair market compensation exceptions to the Stark Law state that an agreement must be in writing and signed by both parties. That is usually accomplished by using a hard copy of a written agreement that is physically executed by both the hospital and the physician. However, while there is little precedent on the application of the federal Uniform Electronic Transaction Act (“UETA”) to the Stark Law, 73 PS §2260.303, the UETA appears to provide a solution to your dilemma.

Section 2260.303(a) of the UETA states that “a record or signature may not be denied legal effect or enforceability solely because of its electronic form.” Subsection (c) then states: “If a law requires a signature, an electronic signature satisfies the law.”

The “editor’s notes” attached to the UETA define a number of terms that are used in the UETA. The editor’s notes on the definition of an agreement state: “whether the parties have reached an agreement is determined by their express language and all surrounding circumstances.”

The editor’s notes that describe an electronic signature then state:

The idea of a signature is broad and not specifically defined. Whether any particular record is ‘signed’ is a question of fact. Proof of that fact must be made under other applicable law. This Act simply assures that the signature may be accomplished through electronic means. No specific technology need be used in order to create a valid signature. One’s voice on an answering machine may suffice if the requisite intention is present. Similarly, including one’s name as part of an electronic mail communication also may suffice, as may the firm name on a facsimile. (Emphasis added.)

When one also considers that the preamble to the Stark Phase 3 Regulations states: “Nothing in the regulations precludes execution of the agreement in counterparts” 72 FR 51051 (Sept. 5, 2007), then it is difficult to see any reason why, given the terms of the UETA, a hospital could not consider the e-mail exchange between the hospital and the physician to satisfy the Stark signature requirement.