QUESTION:    How should we handle potential HIPAA violations by medical staff members? It seems the Privacy Officer should be involved, given that person’s expertise and responsibility for privacy generally. At the same time, HIPAA violations often involve behavioral concerns that the medical staff leadership may want to address.

ANSWER:    There are good reasons for involving a hospital’s Privacy Officer in the review of HIPAA violations by medical staff members. First, HIPAA states “[a] covered entity must designate a privacy official who is responsible for the development and implementation of the policies and procedures of the entity.” 45 C.F.R. §164.530(a)(1)(i). Since the hospital’s Privacy Officer is responsible for “implement[ing]” the HIPAA policies of the hospital, the Privacy Officer should be involved in addressing privacy violations by medical staff members.

Also, Privacy Officers have significant experience investigating and responding to privacy violations. They will be familiar with HIPAA’s dense regulatory requirements and know how to find information that shows if health information was improperly accessed.

At the same time, there are good reasons for using the medical staff process to review HIPAA complaints involving physicians:

• Physicians may be more likely to listen to other physicians.

• Hospital licensing regulations generally require the medical staff to review the actions of its members.

• The medical staff process is protected by a statutory peer review privilege, which may help to prevent the records of a HIPAA investigation from being used in a lawsuit by a disgruntled patient.

• Violations of HIPAA (or any regulation) often include a behavioral component that will be of interest to the medical staff leadership.

Thus, a hybrid process seems ideally suited for reviewing HIPAA violations by medical staff members. Such a hybrid process could use the review process identified in the medical staff Professionalism Policy, but with the HIPAA Privacy Officer closely involved in the review. The Professionalism Policy and the document that describes the composition of the committee that reviews behavioral concerns (e.g., the Leadership Council) should specifically state that other hospital personnel (such as the Privacy Officer) may be involved in the review of behavioral matters.

It’s also important to define expectations for medical staff members. The medical staff Professionalism Policy should define “inappropriate conduct” to include “inappropriate access, use, disclosure, or release of confidential patient information.”

Finally, medical staff and hospital leaders must be willing to enforce policies dealing with patient privacy. In the past, HIPAA violations by medical staff members were often treated with a slap on the wrist. Given HHS’s more vigorous enforcement efforts in recent years, hospitals cannot treat medical staff members as if they are exempt from HIPAA.

For additional information about dealing with physician behavior concerns, please join us in San Francisco for:

The Peer Review Clinic

The Ritz-Carlton, San Francisco
October 23-25, 2014

 See you there!

QUESTION:    Our hospital and a neighboring hospital are planning to form a common parent company. Will we have to file anything with the Federal Trade Commission?

ANSWER:    If you are both nonprofit and the new parent is going to qualify as a 501(c)(3) organization, you should be eligible for an exemption from the Hart-Scott-Rodino pre-merger notification requirements.

FTC regulations, at 16 C.F.R. §802.40, state that: “The formation of an entity is exempt from the requirements of the Act if the entity will be not-for-profit within the meaning of sections 501(c)(1)-(4), (6)-(15), (17)-(20) or (d) of the Internal Revenue Code.” However, it would be a good idea to get confirmation of this from the FTC Pre-Merger Notification Office, which will issue informal interpretations.  See http://www.ftc.gov/enforcement/premerger-notification-program/informal-interpretations.

And don’t forget to talk to the Antitrust Division of your State Attorney General’s Office. They will likely be very interested in reviewing the transaction and are not bound by FTC rules.

QUESTION:      Our MEC has decided to completely revise our Medical Staff Bylaws, which have had only piecemeal amendments over the last decade. As Chief of Staff, I asked at the last staff meeting (and again by e-mail) for volunteers to serve on the Bylaws Committee. Only one physician offered to serve. What can I do?

ANSWER:      Unfortunately, apathy is an issue in many medical staffs. The pressures on practicing physicians today are considerable. Perhaps “Bylaws” simply doesn’t strike many as interesting. But Bylaws are so important to the culture of safety and collegiality! Those who have helped craft new Bylaws come away from that experience not only more engaged, but also with a good understanding of how good bylaws documents can help anticipate problems and help solve them. How about making personal calls to the physicians you (and the other key leaders, such as the current or immediate past officers and department chairs and the CMO) identify as being thoughtful, fair-minded and who relate well to colleagues? It’s good to have some experienced former leaders on a Bylaws Committee as well as some new blood – draw from physicians you are considering for the “leadership pool.” Current leaders should always be on the lookout for potential members to comprise an informal leadership pool. Experiences in the pool over the course of several years can give them some insight and know-how to prepare them to progress to other leadership roles. Not every staff member has the aptitude and willingness to serve in a leadership role. Those who have the potential but not all the fully developed skills can be nurtured along by current leaders. (Those of you who have attended our Complete Course for Medical Staff Leaders will recognize the “leadership pool” as a term coined by our colleague Dr. Randy Reid!) Today, waiting for volunteers may simply not be enough.

QUESTION:    Can we grant temporary privileges under the Joint Commission’s “important patient care need” standard so a physician on our staff can learn a new procedure?

ANSWER:    The Joint Commission has stated that temporary privileges may not be granted to a physician to allow that physician to learn a new procedure. The Joint Commission’s rationale is that the grant of clinical privileges signifies that an individual is competent to perform a procedure. Granting privileges to learn a procedure – even if those privileges are designated as “temporary” – would create confusion as to the meaning of clinical privileges.

The Joint Commission authorizes two types of temporary privileges:

(1)        “new applicant” temporary privileges, which may be granted when an applicant for initial appointment is awaiting approval by the Medical Executive Committee and Board of Directors; and

(2)        “important patient care need” temporary privileges, which are typically used for locum tenens physicians and similar purposes.

In either case, the physician requesting the privileges must be competent to perform them.

In 2007, the Joint Commission’s Standards Interpretation Group (“SIG”) stated that a physician coming to a hospital to learn a procedure “would not qualify as an important patient care need to justify the use of important patient care need temporary privileges.” The SIG went on to say that “[t]he only temporary privileges that could be granted would be full new applicant temporary privileges.” But if “new applicant” temporary privileges are to be used, the applicant must establish that he or she meets all applicable criteria for the privileges in question. In other words, there really is no way to use temporary privileges to allow a physician to learn a new procedure.

The Joint Commission has also pointed out that if a physician “will not be participating in any manner with the procedure,” but will only be doing “standby observation,” there would be no need to credential or privilege the physician. Of course, doing “standby observation” will generally not be sufficient to learn a new procedure.

QUESTION:      Our hospital has adopted a mandatory flu vaccine policy for all employees and our MEC thinks it makes sense to also require vaccines for all private practice providers who are credentialed at the hospital. What is the best way to do this?

ANSWER:     This question seems to be coming up often – another sad reminder that the summer season is transitioning to flu season! Many medical staff leaders see the value in addressing this issue consistently across all providers, regardless of whether they are employed or not.

The simplest solution would be to modify your eligibility criteria in the Medical Staff Bylaws or Credentials Policy so that every applicant and medical staff member would be required to provide evidence of an annual influenza vaccination. Of course, any exemptions in the hospital’s policy for employees could also be recognized (i.e., allowing providers to wear a mask whenever they are in the hospital if, for example, a medical condition would prohibit them from obtaining a vaccination).

Have other credentialing questions? Then join us this fall for The Credentialing Clinic at the New York Marriott Marquis where we will work through all of your toughest credentialing dilemmas, including how to modernize your eligibility criteria.

And if you can’t make it to the Big Apple, please contact us to have The Credentialing Clinic come to you!

QUESTION:    In a nutshell, how does deferred compensation personal services agreement for ED call coverage work?

ANSWER:    In a deferred compensation program, a hospital would enter into an individual personal services agreement with those physicians on the medical staff who wish to participate in the program. Those physicians would provide ED call coverage and assume other responsibilities in return for compensation pursuant to a deferred compensation plan.

In return for the physician’s services, the hospital would credit the account established for the physician pursuant to the deferred compensation plan each day that the physician is scheduled by the hospital for, and in fact provides, ED call coverage. The amounts credited are subject to distribution and investment vesting rights and forfeiture provisions as described in the plan (for example, being excluded or precluded from Medicare, Medicaid, or any other federal or state health care program; failure to remain on the active staff; and failure to maintain malpractice insurance coverage, among other things, would be subject to forfeiture).

The agreement would be in effect for a one-year term, automatically renewable for additional terms of one year unless either party serves written notice to the other of its intent not to renew. If the hospital serves notice of its intent not to renew, any payments or benefits of the physician that have been accrued under the deferred compensation plan shall become vested and payable to the physician as of the expiration of the then current term. If the physician serves notice of intent not to renew, any payments or benefits that have been accrued under the plan but not yet vested shall be forfeited by the physician.

The amounts credited to each physician’s account would not be presently available to the physician, but will vest in the future, and many physicians consider the amounts as part of their retirement packages.

Join Linda Haddad and Alan Steinberg for more information on this topic and other topics in their “EMTALA & ED Call – What’s Hot Now?” audio conference on September 2, 2014.

QUESTION:   Our hospital is currently using a pre-application process for individuals interested in applying for clinical privileges and medical staff membership at the hospital. We also conduct interviews with these individuals, with the interview occurring before a decision is made on whether the individual satisfies the threshold eligibility criteria included in the pre-application. Is this acceptable?

ANSWER:    There are no legal prohibitions on conducting an interview with an individual who is interested in applying for medical staff appointment and clinical privileges before a determination is made about whether the individual satisfies the threshold eligibility criteria listed on a pre-application form. However, to reduce the chance of confusion about the reasons behind the interview, it would be best to make it clear to the individual that the interview is only being conducted in conjunction with the pre-application form and to make a determination about whether the individual satisfies threshold eligibility criteria. If the individual is deemed ineligible to apply because of information provided on the pre-application form and during the interview, there should be no reason for the individual to believe that he or she is entitled to a medical staff hearing or appeal under the Bylaws since there has not been a denial of the individual’s application.

A good way to achieve this clarity is by adding a paragraph to your pre-application form (or use a cover letter with the pre-application form) that informs the applicant that he or she is required to complete the enclosed pre-application form and that upon receipt of a complete pre-application and after an interview is conducted, a determination will be made as to whether the applicant is eligible to receive a full application for medical staff appointment and clinical privileges. You may also want to reinforce this process by spelling it out in the Medical Staff Bylaws or Credentials Policy.

Pre-application interviews can be tricky because they often, if not always, elicit a subjective response in the person conducting the interview. Nonetheless, we recommend that any interview that occurs before a decision is made on whether to extend an application form to an individual be conducted only to determine whether threshold eligibility criteria (i.e., information requested on the pre-application form) are satisfied.   If that decision is based on more subjective information, the greater the risk – especially if the individual is in a protected class because of race, gender, disability, age, etc.

If the decision is based on objective criteria only and the individual seeks a specific reason why he or she was deemed to be ineligible to apply for appointment, the reason will be much easier to articulate in any follow-up communication.

QUESTION:    Can our lab bill Medicare for specimen collection fees for lab specimens collected by phlebotomists who are independent contractors rather than employees?

ANSWER:     Yes. Section 60.1 of Chapter 16 of the Medicare Claims Processing Manual states: “This fee will not be paid to anyone who has not extracted the specimen.” The Manual provision in question is silent about the employment or contractor status of the phlebotomists who work for the lab. Therefore, this provision does not prohibit the laboratory from billing the collection fee, regardless of whether the specimen is collected by employees or independent contractors, since in either case it is the lab which collects the specimens through these individuals. No other interpretation makes sense. If the Manual provision stating that the fee will not be paid to “anyone” who has not extracted the specimen was read in a way to allow only the individual who personally extracted the specimen from the patient to be paid the fee, then only individual phlebotomists – rather than labs that employ or contract with them – could receive the payment. However, this is not the case since labs do get paid when their employees extract specimens. There is no express or implied prohibition against labs using independent contractors to actually extract the specimen and be paid the fee. The statement in question was likely inserted to prohibit the collection fee to be channeled to doctors’ offices, nursing homes or other places where a lab extracted a specimen as a disguised kickback or referral fee, not to prohibit labs from independently contracting with phlebotomists.

QUESTION:     We have an applicant who is refusing to answer one of the questions on our application form because she says that her lawyer told her it could violate a settlement agreement that she has with another hospital. We think that information is relevant to her request for appointment at our hospital. Can we still ask for the information? Should we ask for a letter from her lawyer? Should the application be held 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 related policies) 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.

QUESTION:    We are being surveyed by the Joint Commission and the physician surveyor has informed me that she is going to cite us for noncompliance with MS.01.01.01 because our bylaws do not include a reference to who can grant disaster privileges. We have a provision in our bylaws that deals with the granting of privileges, we have a policy on disaster credentialing, and we reference disaster privileges in our credentialing policy.  I pointed all of this out to the surveyor, but she wasn’t buying it.  Do we need more in our bylaws?

ANSWER:    It is hard to believe that this kind of issue is still being raised by Joint Commission surveyors, but it is. Several other clients said the same thing happened when they were surveyed by the Joint Commission. They were cited, despite the fact that they had a disaster privileging policy, because the medical staff bylaws did not specifically mention this term.

In our opinion, MS.01.01.01 does not require the medical staff bylaws to address disaster privileges, so long as you have a disaster privileging policy or address this issue in your credentials policy. The surveyor appears to be interpreting the Standards literally and without regard to the discretion which the Joint Commission said it would grant to hospitals and their medical staffs in determining what constitutes a “basic step” and must be in the bylaws, and what constitutes a “detail” and can be in a separate policy.

Notably, the language of MS.01.01.01 – the standard which delineates those matters which must be outlined in the “Bylaws” vs. other policies – says nothing about disaster privileges. While Standard EM.02.02.13, EOP 2 states that the Bylaws must identify the individuals responsible for granting disaster privileges, the Joint Commission itself, and others within the hospital industry, use the term “Bylaws” loosely, when referring to the Medical Staff Bylaws, credentialing policy, rules and regulations, and other medical staff policies. It is for this very reason that the Joint Commission took the opportunity, through MS.01.01.01, to outline the items which must be included in the “Bylaws” document.

Although we do not agree with the surveyor’s interpretation, some battles are not worth fighting. All you need to do to satisfy the surveyor is modify the “Basic Steps” in the bylaws to include a sentence on disaster privileges. We recommend the following language: “When the disaster plan has been implemented, the Chief Executive Officer or the President of the Medical Staff may use a modified credentialing process to grant disaster privileges after verification of the volunteer’s identity and licensure.”