Question Of The Week

March 2, 2023

Posted on by Courtney Patterson

QUESTION:
I heard that CMS added a new kind of provider – A Rural Emergency Hospital (“REH”).  Is this a new category of hospital? Does the Stark Law treat it like a hospital for purposes of physician investment?

OUR ANSWER FROM HORTYSPRINGER ATTORNEY HENRY CASALE:
You have asked several questions and so I will take them one at a time.

WHAT IS A RURAL EMERGENCY HOSPITAL?
A Rural Emergency Hospital or REH is a new provider type that became effective on January 1, 2023.  In order to qualify to become an REH, a provider must have been either a Critical Access Hospital (“CAH”), or a rural hospital with not more than 50 beds, and must have been participating in Medicare as of the date of the December 27, 2020 enactment of the Consolidated Appropriations Act, and satisfy the new REH Conditions of Participation (which closely align with the current CAH Conditions of Participation).

AN REH IS NOT A HOSPITAL
Please do not be confused by the name of this new provider. An REH is not a “Hospital” for purposes of the Medicare Program or the Stark Law.  Rather, an REH is a new kind of provider.  The REH payment rules are unique as is the manner in which the Stark Law applies to an REH. 

AN REH DOES NOT PROVIDE INPATIENT SERVICES (EXCEPT SNF SWING BEDS)
An REH is defined as an entity that operates for the purpose of providing emergency department services, observation care, and other outpatient medical and health services specified by the Secretary in which the annual per patient average length of stay does not exceed 24 hours.

The time calculation for determining the length of stay of a patient receiving REH services begins with the registration, check-in or triage of the patient (whichever occurs first) and ends with the discharge of the patient from the REH. The discharge occurs when the physician or other appropriate clinician has signed the discharge order, or at the time the outpatient service is completed and documented in the medical record.

The REH must not provide inpatient services, except those furnished in a unit that is a distinct part licensed as a skilled nursing facility to furnish post-hospital extended care services.  This prohibition on providing inpatient services to a rural population is thought to be the major factor discouraging many eligible CAHs and rural hospitals with not more than 50 beds, from converting to an REH.

AN REH IS PAID AT A SPECIAL RATE
An REH is not a hospital and is not reimbursed in the same manner as a hospital.  Rather an REH is reimbursed at the then-current Medicare Hospital Outpatient Prospective Payment System (“OPPS”) rate PLUS 5%.  The REH is also entitled to a beneficiary copayment (which is not to take the additional 5% reimbursement into account).  In addition, an REH will be paid a monthly facility fee.

STARK APPLIES, BUT…
An REH is required to provide radiology and other outpatient services which fall within the Stark definition of a Designated Health Service (“DHS”).  Therefore, the Stark Law applies, and a physician may not have a compensation arrangement with, or an investment interest in, an REH unless an exception to the Stark Law can be satisfied.

Initially, CMS proposed a special exception for physician investment in an REH which was based on the whole hospital exception.  However, those regulations were never finalized.  Rather, CMS will require an REH to comply with the same compensation arrangement exceptions as any other entity that provides a DHS.

When it comes to whether a physician may have an investment interest in an REH, remember, an REH had to have been a critical access hospital or rural hospital with not more than 50 beds, and there is currently a broad exception to the Stark Law for physician investment in an entity that is located in a rural area.  Therefore, the rural provider exception should be available to most, if not all, REHs.   See 42 C.F.R. § 411.356(c)(1). 

However, an REH does not automatically qualify for this rural provider exception   Rather, this exception requires that in addition to the REH being located in a “rural” area, at least 75% of the REH’s services must be furnished to individuals who reside in a “rural” area.

Effective January 1, 2023, CMS also revised the definition of “Rural” for purposes of the Stark Law to state that a “Rural” area is any area that is not defined as “urban” under 42 C.F.R. § 412.64(b)

42 C.F.R. § 412.64(b) then states that a rural area is essentially any area located outside of a Metropolitan Statistical Area or a Metropolitan Division (in the case where a Metropolitan Statistical Area is divided into Metropolitan Divisions), as defined by the Executive Office of Management and Budget.  However, there are exceptions so you need to check the regulations.

Adding to the confusion is that CMS has stated in the preamble to the Stark regulations that the rural provider test “differs from the rural/urban test that a hospital uses for wage index purposes.”

CMS has also amended each compensation arrangement exception that applies to a Federally Qualified Health Center (“FQHC”) and Rural Health Clinic (“RHC”), to state that as of January 1, 2023, that exception will also apply to an REH.

DON’T FORGET ABOUT STATE LAW
Please keep in mind that your analysis of whether you should organize an REH should not rely solely on the new REH Medicare rule.   Some states (Pennsylvania for example) do not permit free-standing Emergency Departments.  Unfortunately, regardless of whether Medicare will recognize an REH as a provider, an REH cannot operate in a state unless it is licensed, and in order to be licensed, the state must either permit a free-standing Emergency Department, or adopt new rules licensing an REH.

Therefore, there are some states where REHs cannot lawfully operate under state law and as a result do not have the opportunity to achieve the enhanced reimbursement available to an REH.  If you are in such a state you must wait for your state to create a license category that will recognize either a free-standing Emergency Department or an REH.  But do not lose hope, even where currently prohibited, state licensure bodies are under pressure from rural providers to create a license category for an REH – but until they do, an REH will not be permitted to operate in some states.

If you want to learn more about the Stark Law, the False Claims Act, the Anti-Kickback Statute, recent developments like REHs, and other current issues in Hospital-Physician compliance, consider joining Dan Mulholland and Henry Casale at our next Hospital‑Physician Contracts and Compliance Clinic that will be held in Phoenix on November 16-18, 2023.

If you cannot wait until November for more information on these and many other health law related topics, check out HortySpringer’s Health Law Expressions “Kickback Chronicles” podcast episodes with Henry Casale and Hala Mouzaffar.

February 23, 2023

Posted on by Courtney Patterson

QUESTION:
Did the Department of Justice – Antitrust Division (“DOJ”) recently withdraw its support for several safe harbors from enforcement actions?

OUR ANSWER FROM HORTYSPRINGER ATTORNEY NICHOLAS CALABRESE:
Yes. On February 3, 2023, the DOJ Antitrust Division withdrew from what it called “three outdated antitrust policy statements related to enforcement in healthcare markets.”  The three policy statements are “Department of Justice and FTC Antitrust Enforcement Policy Statement in the Health Care Area” issued in 1993; “Statements of Antitrust Enforcement Policy in Health Care” from 1996; and “Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program” issued in 2011.

The policy statements addressed issues such as antitrust safety zones for:  hospital mergers; hospital joint ventures that encompass expensive medical equipment; and joint purchasing arrangements between health care providers, among other things.

Although new guidance may be coming at some point, for now, the Antitrust Division stated “[r]ecent enforcement actions and competition advocacy in healthcare provide guidance to the public, and a case-by-case enforcement approach will allow the Division to better evaluate mergers and conduct in healthcare markets that may harm competition.”

February 16, 2023

Posted on by Courtney Patterson

QUESTION:
Our bylaws say that new medical staff members are “provisional” for at least 12 months, sometimes for 24 months.  Is this the same thing as focused professional practice evaluation?

OUR ANSWER FROM HORTYSPRINGER ATTORNEY LEEANNE MITCHELL:
No – or at least it shouldn’t be!  Focused professional practice evaluation (“FPPE”) is the Joint Commission terminology for the period of focused review that is required for following the grant of any new clinical privileges as the way of confirming practitioner competence – this means a focused review of all privileges for new applicants and all new privileges for existing practitioners (i.e., increases in privileges).  FPPE can be accomplished in many different ways – chart review, proctoring/direct observation, external reviews, even discussions with others who are involved in the care of the individual’s patients.  The Joint Commission does not mandate the duration of FPPE for any practitioner and, in fact, have specifically noted in the past that using a traditional 12-month provisional period as the time frame for performing FPPE could be overly burdensome for practitioners who had high volumes.

To that end, there is no requirement that hospitals and medical staffs maintain a provisional appointment status, though we do still see many hospitals that continue to utilize that status, generally as a way to assess the “citizenship” aspects of medical staff appointment – like behavior, attendance at and participation in medical staff affairs, completion of medical records, fulfillment of call obligations, etc.  In addition, at the same time, but generally for a much shorter duration, all new members are subjected to FPPE, the requirements of which depend on the practitioner’s specialty and clinical privileges.  The key is to understand that if a medical staff is going to maintain a provisional status or process, it should be addressed separately from the FPPE to confirm competence process.

February 9, 2023

Posted on by jwilbert

QUESTION:
A physician called requesting a patient transfer to our hospital.  We would like to start recording these types of calls for patient safety and quality purposes.  Does the hospital have to obtain the callers’ consent prior to recording these communications?

OUR ANSWER FROM HORTYSPRINGER ATTORNEY MARY PATERNI:
The hospital’s obligation to get a caller’s consent prior to recording the communication depends on whether the hospital is located in a “one-party consent” or an “all-party consent” state.

One-party consent states allow a person to record so long as they are a party to the communication and consent to the recording.  In this case, the physician making the call does not have to be informed that the call is being recorded since the physician receiving the call has already provided the necessary consent.  The hospital may, as a courtesy, include an automated message at the top of the call that informs the physician making the transfer request that the conversation will be recorded.

On the other hand, states that have adopted “all-party consent” recording laws prohibit the use of devices to record absent the consent of all parties involved in the communication.  Therefore, if you find yourself in an “all-party consent” state, then the hospital will be required to disclose that it is recording the call prior to the start of the conversation.

When deciding whether and how to record patient transfer calls, keep in mind that the hospital is obligated under the HIPAA Privacy Rule to protect private health information shared during these communications.  Therefore, it is important that the hospital determine how it will record and how it will store these communications.  If, for instance, the hospital decides to contract with another entity to record and store these communications, then the entity will likely be furnishing Business Associate services.  In this case, it would be necessary for the hospital and the entity to enter into a business associate contract to ensure that the entity is safeguarding these communications in a manner appropriate under HIPAA.

February 2, 2023

Posted on by Courtney Patterson

QUESTION:
We have a physician who has been working his way through our peer review process with very little sustained success.  Recently, there were several significant clinical events that caused Medical Staff Leaders to escalate the matter to the Medical Executive Committee which decided to commence an investigation.

Our question is “do we have to re-do all the great work done by our Peer Review Committee, or can we use that as part of our investigation?”

OUR ANSWER FROM HORTYSPRINGER ATTORNEY SUSAN LAPENTA:
This is an excellent question and one that we hear quite frequently.  We know from experience Medical Staff Leaders will be able to address and resolve most issues that come to their attention, whether they are of a clinical or behavioral nature, using collegial and progressive steps.  However, every once in a while, a practitioner can’t or won’t change and Medical Staff Leaders will need to escalate concerns to the Medical Executive Committee for a formal, capital “I” investigation.

The procedure for conducting an investigation is laid out in your credentials policy, bylaws or investigation manual.  Once you get to an investigation, the stakes are high for everyone, so it is very important to follow the procedures outlined in your documents.

It is also important that the investigation is thorough, fair, and objective.  However, that does not mean that you have to re-do all the work done by the Peer Review Committee.  That would simply make no sense.  The Medical Executive Committee, or more likely an investigating committee appointed by the Medical Executive Committee, should have access to any documents that it deems relevant, including documents from the practitioner’s credentials file and quality file.  The investigating committee can and should review and rely on informational and educational letters along with letters of awareness, and letters of counsel or guidance.  It can and should review and rely on prior performance improvement plans (aka voluntary enhancement plans).  The investigating committee can and should rely on case reviews and reports from external experts.

If you have worked your professional practice evaluation process, once you get to the investigation phase, you may have already done most of the heavy lifting.  The role of the investigating committee may be primarily to pull together all prior progressive actions that had been taken and consider potential patterns and trends.  Additionally, the investigating committee may want to conduct interviews of individuals with relevant information including staff, the department chair and members of the Peer Review Committee.  Critically, even if your governing documents don’t expressly require it, the investigating committee will want to provide the subject physician with notice of the concerns that have been identified and an opportunity to discuss, explain or refute those concerns.

So, the bottom line is you can and should consider information reviewed by and generated for the Peer Review Committee at part of an investigation.  But you should also use the investigation to answer any outstanding questions and to meet with the subject physician.

January 26, 2023

Posted on by Courtney Patterson

QUESTION:
From time to time, patients in our emergency department will leave without being seen (“LWBS”). Can we get in trouble under the EMTALA law when that happens?

OUR ANSWER FROM HORTYSPRINGER ATTORNEY JOHN WIECZOREK:
Generally no, as long as you document the event correctly. Here is what the CMS Interpretive Guidelines for EMTALA say about LWBS:

If a screening examination reveals an emergency medical condition (EMC) and the individual is told to wait for treatment, but the individual leaves the hospital, the hospital did not “dump” the individual unless:

  • The individual left the emergency department based on a “suggestion” by the hospital;
  • The individual’s condition was an emergency, but the hospital was operating beyond its capacity and did not attempt to transfer the individual to another facility; or
  • If an individual leaves a hospital Against Medical Advice (AMA) or LWBS, on his or her own free will (no coercion or suggestion), the hospital is not in violation of EMTALA.

The Guidelines tell the surveyors to look for this:

In cases where an individual (or person acting on the individual’s behalf) withdrew the initial request for a medical screening examination (MSE) and/or treatment for an EMC and demanded his or her transfer, or demanded to leave the hospital, look for a signed informed refusal of examination and treatment form by either the individual or a person acting on the individual’s behalf. Hospital personnel must inform the individual (or person acting on his or her behalf) of the risks and benefits associated with the transfer or the patient’s refusal to seek further care. If the individual (or person acting on the individual’s behalf) refused to sign the consent form, look for documentation by the hospital personnel that states that the individual refused to sign the form. The fact that an individual has not signed the form is not, however, automatically a violation of the screening requirement. Hospitals must, under the regulations, use their best efforts to obtain a signature from an individual refusing further care.

So as long as you follow these guidelines, you should be OK.  But make sure your ED staff understand these rules.

January 19, 2023

Posted on by Courtney Patterson

QUESTION:
Some of our residents have shown an interest in moonlighting at our hospital. Is that something we would be able to offer them?

OUR ANSWER FROM HORTYSPRINGER ATTORNEY HALA MOUZAFFAR:
Yes, absolutely! However, there are some parameters the hospital should be aware of when deciding what type of services residents can provide while moonlighting.

As you are probably aware, CMS requires that the services residents provide to inpatients related to their Graduate Medical Education (“GME”) program be billed as GME payments.  These services cannot be billed as physician services.

This also used to be true for inpatient services provided by residents, not related to their GME.  However, in March 2020, CMS issued a new rule that, among other things, changed the language in 42 C.F.R. § 415.208 that lays out the rules for moonlighting. This new rule established that services provided by residents to inpatients at a resident’s home institution, not related to their GME, were covered as physician services and payable under the physician fee schedule if three criteria were met and documented in the medical record:

(i)         The services must be identifiable physician services and meet the conditions for payment,

(ii)        The resident must be fully licensed to practice in the State, and

(iii)       The services performed must be able to be separately identified from those services that are required as part of the approved GME program.

So, while you can offer residents a range of options for moonlighting, it is important to keep in mind the billing consequences for the types of services the resident is providing.

Also, remember that moonlighting residents would need to be granted clinical privileges to provide services outside of their residency program.  Because moonlighting residents have usually not completed a residency program, they are typically not eligible for clinical privileges as Medical Staff members.  Instead, moonlighting residents are often granted privileges as a category of “Licensed Independent Practitioner.”  Be sure to consult your Medical Staff Bylaws and related documents to see how they treat moonlighting residents.

January 12, 2023

Posted on by jwilbert

QUESTION:
We have a contract with a Patient Safety Organization (“PSO”) and are concerned by the Garcia case summarized in this week’s Health Law Express.  Is there anything that we can do to enhance the eligibility of information we are generating for protection under the Patient Safety and Quality Improvement Act (“PSQIA”)?

OUR ANSWER FROM HORTYSPRINGER ATTORNEY CHARLIE CHULACK:
Information becomes Patient Safety Work Product (“PSWP”) when it is collected as a part of a provider’s Patient Safety Evaluation System (“PSES”).  Therefore, it makes sense for health care providers that have an agreement with a PSO (or who are considering one) to draft a robust PSES Policy that specifically identifies information that is being collected as a part of its PSES.  The policy should also state that the information is being collected “solely” for reporting to a PSO and constitutes PSWP.  However, before identifying information to include in the PSES, a health care provider should review any applicable laws and regulations that define information collection and reporting obligations.  For example, Pennsylvania requires healthcare entities to report patient safety events to the state.  Under HHS Guidance (and most of the case law on the subject), such information would not be considered PSWP because it is not developed “solely” for reporting to a PSO – it is also being developed for reporting to the state.  The court in Garcia goes one step further, holding that a contractual obligation to generate patient safety information renders that information ineligible for protection as PSWP under the PSQIA. As noted above, this is an incredibly narrow interpretation of the privilege under the PSQIA and sees no support in the PSQIA regulations (although it is consistent with another recent case from a federal court in Oregon – Dence v. Wellpath).  The court appears to indicate that the contract’s reference to accreditation standards provides another reason the mortality review was generated, further removing it from the PSQIA protection.  However, the PSQIA regulations contain a PSWP disclosure exception for “voluntary disclosure[s] to an accrediting body.”  This suggests that information could qualify as PSWP and still be shared with an accreditation entity, such as The Joint Commission, to demonstrate that a health care provider is meeting accreditation standards.  Thus, the court’s reliance on obligations created by accreditation standards as a justification for certain information not being eligible to become PSWP is puzzling.  Nevertheless, development of a PSES is a tricky task, and a health care provider should review its information generation and reporting obligations to assist in defining its PSES and what qualifies as PSWP.

January 5, 2023

Posted on by Courtney Patterson

QUESTION:
There is a lot of confusion amongst members of our Medical Staff about the relationship between Medical Staff appointment and clinical privileges.  For example, it is common to hear individuals refer to “Active Staff Privileges.” How can we help educate our Medical Staff on the difference between Medical Staff appointment and clinical privileges?

OUR ANSWER FROM HORTYSPRINGER ATTORNEY IAN DONALDSON:
Many people confuse or intertwine these two concepts, even though they are separate and distinct.  As such, it is important that your bylaws recognize appointment and clinical privileges as distinct concepts.

Appointment relates to an individual’s membership on the Medical Staff (i.e., that they are recognized as being “on the team”).  With this membership comes certain rights and responsibilities, like voting, serving on committees, etc.

Clinical privileges relate solely to the patient care services an individual has been authorized to provide at the hospital.  They do not relate to an individual’s involvement in Medical Staff affairs and, in turn, are not tied to the individual’s staff category.  In fact, an individual may be a member of the Medical Staff but have no privileges (e.g., “Community Staff”) or could have clinical privileges but no membership on the Medical Staff (e.g., telemedicine providers).

Ensuring your Medical Staff Bylaws documents make this distinction will hopefully help to educate your Medical Staff on this issue.

December 22, 2022

Posted on by jwilbert

QUESTION:

Our hospital has noticed that on-call coverage by other local hospitals has gotten thinner since the pandemic.  If other hospitals adopt lighter on-call schedules, it means more patients are transferred to our hospital and our on-call physicians have more of a burden.  Is it acceptable for these other hospitals to have limited (or zero) on-call requirements for their specialists?

OUR ANSWER FROM HORTYSPRINGER ATTORNEY PHIL ZARONE:

The Emergency Medical Treatment and Labor Act (“EMTALA”) requires every Medicare-participating hospital with an Emergency Department to have an on‑call schedule.  Specifically, each hospital is required to have “a list of physicians who are on call for duty after the initial examination to provide further evaluation and/or treatment necessary to stabilize an individual with an emergency medical condition.”  42 C.F.R. §489.20(r)(2).

The Centers for Medicare & Medicaid Services (“CMS”) expects a hospital to provide adequate on-call coverage consistent with the services provided at the hospital and the resources the hospital has available.  If a hospital has physicians on the Medical Staff who routinely provide services in their specialty to patients in the community, the hospital is expected to also provide a reasonable amount of on-call coverage in that specialty.

Prior to 2003, CMS informally operated under the “three‑physician rule.”  This rule stated that if there were three or more specialists on a hospital’s Medical Staff, CMS expected that hospital to provide on-call coverage 24 hours a day, 365 days a year.  In other words, under the three-physician rule, physicians were each expected to provide about 10 days of on-call coverage per month.

In 2003, CMS specifically disavowed the three‑physician rule.  In lieu of the three‑physician rule, CMS said it will use an “all relevant factors” test by which CMS will:

  • consider all relevant factors, including the number of physicians on staff, other demands on these physicians, the frequency with which the hospital’s patients typically require services of on‑call physicians, and the provisions the hospital has made for situations in which a physician in the specialty is not available or the on‑call physician is unable to respond.

CMS has refused to give any firm guidance on the number of days of coverage a hospital must have per physician under the “all relevant factors” test.  Thus, a hospital will only know if its on-call schedule is compliant if, after a complaint and CMS investigation, the hospital is found to be in compliance with EMTALA.

If you have reason to believe that another hospital’s on-call coverage is inadequate or nonexistent, you may want to first gather data to attempt to confirm this is the case.  If the data seem to confirm a problem exists, you might want to arrange a meeting with the other hospital to discuss the issues.  EMTALA allows for hospitals to work together to develop “community call plans” – this might allow all the involved hospitals to make better use of their resources.

There’s certainly no easy solution to on-call problems.  Hopefully, gathering data and communicating will result in better outcomes than any of the alternatives.