Question Of The Week

September 5, 2024

Posted on by Courtney Patterson

QUESTION:
An applicant’s background check revealed a recent misdemeanor arrest that the applicant failed to disclose on their application. Are we allowed to ask the applicant questions about the arrest even though the background check indicated that the case has not yet been resolved?

OUR ANSWER FROM HORTYSPRINGER ATTORNEY HALA MOUZAFFAR:
Absolutely!

It is the hospital’s responsibility, through the credentialing and privileging process, to appoint only highly qualified providers.  To do so, the burden should be on the applicant to demonstrate current clinical competence and an ability to practice safely.  Therefore, it is important to keep the burden on the applicant to resolve any doubts related to their qualifications.  This includes answering additional questions and resolving any doubts that may come up in the course of reviewing their application.  An application that has red flags or outstanding questions should not be processed further until the underlying issues are resolved to the satisfaction of the hospital.

An arrest, for instance, is something that would certainly require follow-up.  Specifically, when was the arrest? Why was the applicant arrested? Were any charges brought against the applicant? Why did the applicant leave this information out of their application? These are questions for the applicant to resolve prior to the hospital processing the application further.

It does not matter if the applicant’s criminal case has not yet been resolved.  The hospital has the ability to ask those questions it feels need to be answered, and for documentation to support those answers, in order to properly resolve any questions about the applicant, and in this case their arrest.

August 29, 2024

Posted on by Courtney Patterson

QUESTION:
Our Credentials Committee is reviewing a reappointment application for a medical staff member who has had some pretty significant behavioral issues over the past year.  We want to recommend that she be reappointed for less than a full two-year appointment term to reinforce the need to change her behavior, but some members of the committee think that it would be an “adverse recommendation” and give her the right to a hearing. Is it?

OUR ANSWER FROM HORTYSPRINGER ATTORNEY LEEANNE MITCHELL:
The short answer is that whether or not a recommendation to grant appointment for less than two years (or three years for those hospitals that have made the switch to longer terms) is governed solely by the existing medical staff bylaws.  If your bylaws do not guarantee two-year appointment terms, and the grant of appointment for less than two years is not specifically listed as one of the things that gives an individual the right to request a hearing in the pertinent section of the bylaws, then no, it would not be considered adverse.

Arriving at this conclusion can be more challenging if, rather than listing specific, clear recommendations that trigger the right to a hearing, the bylaws instead provide that “any recommendation that adversely affects an applicant or member” gives the right to request a hearing.  Whether the hospital views a less than two-year appointment term as adversely affecting an individual or not could very well differ from the viewpoint of the medical staff member at issue.

Bottom line, medical staff bylaws should affirmatively state that medical staff appointment will be granted for “not more” than two (or three) years and should give the Credentials Committee and the Medical Executive Committee the clear ability to grant appointment terms of less than the relevant time period – without concerns that it constitutes an adverse recommendation.  A short-term appointment can be a helpful tool in the exact situation posed above – when medical staff leaders are trying to get someone’s attention, emphasizing the need to make changes during a shortened time period of more focused review.  It can also be helpful when a medical staff member is in the midst of a review process that will not be fully concluded before the current term expires, giving the ability to reappoint that individual on a short-term basis, pending the outcome of the relevant review process.

If you have a quick question about this, e-mail LeeAnne Mitchell at LMitchell@hortyspringer.com.

August 15, 2024

Posted on by Courtney Patterson

QUESTION:
We are in a mid-sized city with one other competing hospital.  Even though this other hospital appears to have a similar composition of specialists (at least on paper), it keeps transferring emergency patients to us claiming it doesn’t have anyone on call in certain specialties.  Our physicians are starting to feel like they’re on call for the other hospital as well as our own. Do we have to accept these transfers?

OUR ANSWER FROM HORTYSPRINGER ATTORNEY IAN DONALDSON:
Under EMTALA, a receiving hospital has the right to refuse a request for a “lateral” transfer.  A lateral transfer occurs where the same services are provided at both the sending hospital and the receiving hospital.  Such a refusal does not violate EMTALA even though it may be in the patient’s best interest for the transfer to be accepted.

However, if the receiving hospital has “specialized capabilities,” and also has the capacity to stabilize the patient’s emergency medical condition, then the receiving hospital must accept the patient.

EMTALA itself lists burn units, shock trauma units and neonatal units as examples of “specialized capabilities.”  However, courts and CMS have taken the position that an on-call physician also constitutes a “specialized capability.”  Thus, if your hospital has an on-call physician available, and the hospital proposing the transfer doesn’t have an on-call physician available, your hospital must accept the transfer if it has the capacity to take care of the patient.  This is true even if the sending hospital has specialists on its staff who could treat the patient if they were on call (but who are not actually on call).

This requirement has put hospitals in a bind, and while it may be patently unfair, refusing the transfer could create its own host of problems.  As such, we recommend accepting the transfer to avoid having patients get caught in the middle.  From there, you could consider how best to address the situation going forward.

If you have a quick question about this, e-mail Ian Donaldson at IDonaldson@hortyspringer.com.

August 8, 2024

Posted on by Courtney Patterson

QUESTION:
We are part of a ten-hospital system.  Each hospital medical staff has its own bylaws, policies, and rules and regulations.  While we have tried to make them consistent over time, there are still a lot of differences in our documents, including in nomenclature, appointment criteria, and the process for suspensions, investigations, and hearings.  Any suggestions??

OUR ANSWER FROM HORTYSPRINGER ATTORNEY SUSAN LAPENTA:
If it helps, you should know, you are not alone.  Most health systems grew through acquisition, one hospital at a time.  Each new hospital had its own medical staff which had their own governing documents which, of course, the medical staff was reticent to change.

At the same time, working with, maintaining, and updating multiple sets of medical staff governing documents is a herculean task.  It also creates the undesired but inevitable opportunity for the documents to become more divergent and even conflicting with time.

That is why many health systems are moving in the direction of rewriting their medical staff governing documents with a focus on the core objectives of consistency and uniformity.  The rewriting often starts with the development of template documents.  While the medical staff bylaws must live at the local level to comply with accreditation standards, starting from the same template document will result in the bylaws being almost identical throughout the system.

When it comes to other medical staff documents, you have more flexibility.  We advocate for the development and adoption of medical staff policies that live at the system level but that are implemented locally by each medical staff.  These policies typically include a system credentials policy, peer review policy, professionalism policy, and practitioner health policy.  The end result is that instead of there being different policies at each hospital medical staff, there is a single system.

An undertaking like this requires commitment, engagement, strong physician leadership, and an ability to “think outside the box.” But the rewards are long lasting.  If you are looking for a mantra to jump start your medical staff bylaws revision project, we offer the sage guidance from a system CMO:  “Our goal, across the system, is to make our medical staff documents as standardized as possible and as unique as necessary.”

If you have a quick question about this, e-mail Susan Lapenta at slapenta@hortyspringer.com.

August 1, 2024

Posted on by jwilbert

QUESTION:
Our Medical Staff Bylaws allow the MEC or Board to be represented by a lawyer at a medical staff hearing only if the practitioner who requested the hearing is also planning to be represented by a lawyer. We recently went through a hearing where this caused some issues, because the physician who was the chair of the MEC at the time the Committee made its adverse recommendation was not available to present the MEC’s case at the hearing. No one else wanted to step up to advocate the MEC’s position at the hearing. Since the practitioner did not choose to be represented by his lawyer, we had to scramble to find someone to represent the MEC at the hearing. We wish we could have used our lawyer. Is there a better way to handle this?

OUR ANSWER FROM HORTYSPRINGER ATTORNEY RACHEL REMALEY:
There is a better way to handle this! You will be glad to know that neither the Medicare Conditions of Participation for Hospitals nor the accreditation standards prohibit hospitals or their medical staffs from being represented by a lawyer at a hearing, even if the practitioner is not represented. Additionally, the Health Care Quality Improvement Act (“HCQIA”), which grants a safe harbor for immunity for the hospital and those who engage in peer review activities on behalf of the hospital, does not prohibit the hospital or its MEC from having legal representation. The HCQIA does require you to permit the physician who requested the hearing to have legal representation at the hearing, and to provide notice to the physician of that (and other) rights to which he is entitled at the hearing. But if the physician fails to take advantage of those rights – including the right to be represented – there is no obligation on the part of the hospital or MEC to make the same sacrifice. So, it is completely within your discretion to amend the Medical Staff Bylaws to make representation at hearings a right of both parties (without regard to whether the opposing party decides to be represented). Of course, you should always check with your counsel first, so that any applicable state laws and regulations can be consulted (just in case those include more stringent hearing provisions).

While you are free to (and probably should) adopt Bylaws language that provides for a universal right to legal representation at medical staff hearings, you should consider a different course of action when conducting professional review activities that are part of the collegial, progressive steps of the peer review/professional practice evaluation processes. We have long recommended that the peer review process be conducted as it was originally intended: peer-to-peer, without the meddling of legal counsel. After all, the whole point of “peer” review has always been to ensure that those who have the clinical expertise and ethical/professional obligations of the medical profession are at the forefront of reviewing their colleagues’ work and assisting with continuous performance improvement. Lawyers play no role in this process. Having lawyers present at collegial conversations and interventions can only hamper conversation and increase defensiveness. It is sure to stifle the process.

For this reason, we have always recommended that Bylaws documents and peer review policies state that no lawyers are allowed (both for the peer reviewers and for those subject to the review process) at these types of meetings. Your policy might allow for rare exceptions to this general rule, where requested by the practitioner subject to review and for good reason, but only if the exception is agreed to by the committee/body conducting the peer review activity. Further, we recommend that such exceptions rarely be made. Importantly, however, if an exception is made to allow the practitioner to bring a lawyer to a meeting, the peer review body should also be granted the same exception (allowing its legal counsel to be present, if it so desired).

In sum, at a medical staff hearing, the practitioner will always be entitled to be represented by counsel if he or she wishes. Therefore, the MEC and Board are not in any way compromising the interests of the physician if the Bylaws provide them with the unqualified right to utilize counsel for representation at the hearing (regardless of whether the physician chooses to have legal representation). By contrast, in routine peer review activities at the Hospital, the practitioner will almost never be entitled to be represented by counsel and, in turn, it would be unfair to allow the MEC and Board to utilize legal representation at meetings that are held pursuant to that process – unless an exception has been made to the general rule, permitting the practitioner to bring counsel to a meeting.

If you have a quick question about this, e-mail Rachel Remaley at rremaley@hortyspringer.com

July 25, 2024

Posted on by jwilbert

QUESTION:
We are confused about whether an applicant for Medical Staff appointment and clinical privileges is entitled to a hearing because of his failure to disclose certain unfavorable information and our decision to not process his application.  The physician claims that he is entitled to a hearing.  How should we handle this?

OUR ANSWER FROM HORTYSPRINGER ATTORNEY CHARLIE CHULACK
While it is always important to consult requirements under state law, which may address situations when a hearing is required, your Medical Staff Bylaws or Credentials Policy (“Bylaws”) should clearly define the consequences for certain events and the circumstances that give rise to a hearing.  For example, if the physician failed to disclose an “accusation” filed against him by the state licensing board and such information is requested on the application, the Bylaws should spell out the results of failing to disclose such information requested on the application.  Specifically, the Bylaws should state that any misstatement in, or omission from, the application is grounds to stop processing the application. A decision not to process an application for these reasons should not entitle the applicant to a hearing or appeal (and this should be clear in your Bylaws).

With that in mind, it also makes sense to review your application forms to confirm that the application questions are seeking information that you need to make an informed decision about someone’s qualifications.  For example, your application should not only seek information on past actions by licensing boards, it also should ask for information on pending actions.  Confirm that the questions on the application form are consistent with provisions in the Bylaws with respect to the threshold eligibility criteria that someone must satisfy for eligibility for appointment.  If one of your threshold eligibility criteria requires an applicant to “have a current, unrestricted license to practice that has never been subject to any restrictions, conditions, or probationary terms and have never had a license to practice in any jurisdiction denied, revoked, restricted or suspended by a state licensing agency,” then there should be a corresponding question on the application seeking this information.

Finally, your Bylaws should place an obligation on members to notify the Medical Staff Office of any change in information provided as a part of the application and state that a failure to do so may result in administrative relinquishment of appointment and clinical privileges.  This permits the Medical Staff and Hospital to evaluate any changes in an individual’s qualifications, weigh those changes against eligibility criteria, and assess the appropriateness of any applicable consequences under the Bylaws.  Unless state law requires it, an automatic relinquishment of appointment and clinical privileges because of failure to continuously satisfy threshold eligibility criteria does not give rise to a Medical Staff hearing.

If you have a quick question about this, e-mail Charlie Chulack at cchulack@hortyspringer.com

July 18, 2024

Posted on by Courtney Patterson

QUESTION:
We asked a physician to attend a Leadership Council (a small group of Medical Staff leaders) meeting to provide input about some recent behavioral concerns we have had about them. The physician agreed, but only if they can bring their attorney. Our policies don’t address a provider’s ability to bring an attorney to meetings like this, so do we have to let the attorney attend the meeting?

OUR ANSWER FROM HORTYSPRINGER ATTORNEY HALA MOUZAFFAR
Nope. In this scenario, you do not have a legal obligation to permit an attorney to attend. The meeting is not a hearing where you would be required to allow the physician’s attorney to be present. It is simply an opportunity for the hospital and physician to get together and discuss the concerns in a collegial manner.

The physician should feel free to consult an attorney, have the attorney accompany them to the hospital, etc., but once the doors shut to that meeting, you do not have an obligation to allow that attorney to be on the other side of them accompanying the physician.

Moving forward, there are some ways you can edit your policies, so you avoid this kind of conundrum in the future. Hospital policies should make it clear that in collegial and educational meetings, like the one you described, no counsel representing the practitioner, medical staff, or hospital will be permitted to be present. Putting something like this in writing gives you a clear place you can point to and say, “sorry our policy doesn’t allow that.”  By not allowing attorneys for any party, it also creates an equal expectation for all parties involved.  And, let’s face it, keeping attorneys out of these collegial/education conversations keeps them just that – collegial and educational. Once you add attorneys to the mix, that heat dial moves up whether you intend it to or not because things just feel more confrontational.

If you have a quick question about this, e-mail Hala Mouzaffar at hmouzaffar@hortyspringer.com.

July 11, 2024

Posted on by jwilbert

QUESTION:
A physician recently resigned employment with a group that’s affiliated with the hospital.  Is there anything we should consider with respect to the physician’s Medical Staff appointment and privileges?

OUR ANSWER FROM HORTYSPRINGER ATTORNEY MARY PATERNI
Yes, you’ll want to evaluate whether the physician is still eligible for continued appointment and privileges under the Medical Staff Credentials Policy (or Bylaws).

Malpractice insurance is often provided through employers, so physicians who resign their employment often lose their malpractice coverage.  Most Medical Staff Credentials Policies state that such insurance is a threshold eligibility criterion for appointment and privileges and that physicians will “automatically relinquish” their privileges if they lose their insurance.  (If your Credentials Policy doesn’t say this, it should!)  So, one step is to determine if the physician has acquired new malpractice insurance.

Similarly, Credentials Policies often require physicians to have acceptable coverage arrangements to be eligible for appointment and privileges.  Resignation from a group may mean that those coverage arrangements are no longer in place, so the existence of appropriate coverage should be confirmed with the physician.

Finally, all the other eligibility criteria in the Credentials Policy should be reviewed to determine if the physician’s resignation from employment will cause the physician to be ineligible.  For example, some Credentials Policies require the physician to maintain an office within the hospital’s service area as a condition of being granted appointment and privileges.

On the employment side, a physician’s employment contract may contain an “incident and coterminous” provision saying that the physician’s privileges will automatically be resigned upon termination of the contract.  Similarly, the contract may include a restrictive covenant prohibiting the physician from practicing in a defined geographic area for a certain amount of time after the contract ends.  However, the employer (not the Medical Staff) is responsible for enforcing such contractual provisions.

If you have a quick question about this, e-mail Mary Paterni at mpaterni@hortyspringer.com.

June 27, 2024

Posted on by Courtney Patterson

QUESTION:
Is there any evidence that offering free trips or other freebies to a physician induces that physician to order the product sold by the person or entity that offered the freebie?

OUR ANSWER FROM HORTYSPRINGER ATTORNEY HENRY CASALE:
The federal government thinks so and so did the jury in a recent case.

In a qui tam case that was brought against the Cameron-Ehlen Group, Inc., d/b/a Precision Lens (“Precision Lens”), and its owner Paul Ehlen, the qui tam relator, and ultimately the federal government, alleged that Precision Lens and Mr. Ehlen provided kickbacks to ophthalmologists in various forms, including travel and entertainment, to induce those physicians to order Precision Lens’ Intraocular Lens (“IOLs”).

The unlawful “remuneration” in this case was alleged to consist of Precision Lens and Mr. Ehlen transporting certain physicians who had a history of using Precision Lens’ IOLs to luxury vacation destinations on a private jet – which was typically flown by Mr. Ehlen. The alleged remuneration included multiple trips, high-end skiing, fishing, golfing, hunting, sporting, and entertainment vacations, often to exclusive destinations such as New York City to see a Broadway musical, the College Football National Championship Game in Miami, and the Masters golf tournament in Augusta, Georgia.

Mr. Ehlen claimed that he was personal friends with these physicians and that the trips were gifts from one friend to another.  Mr. Ehlen and Precision Lens argued that the Antikickback Statute (AKS) does not prohibit a friend from providing a gift to another friend, even if the friends happen to do business with each other. Armed with this “friends” defense, Mr. Ehlen and Precision Lens rolled the dice, and risked a jury trial.

Unfortunately for Precision Lens and Mr. Ehlen, the government was able to convince a jury that the various “gifts” that Precision Lens, and its owner, Mr. Ehlen provided to the ophthalmic surgeons constituted unlawful remuneration that was intended to induce the physicians to order Precision Lens’ IOLs in cataract surgeries that were reimbursed by Medicare. It didn’t help that the government was also able to prove that Precision Lens maintained a fund, referred to internally at Precision Lens as a secret fund or slush fund, that was used to finance many of these multiple physician trips.

Another interesting aspect of this case that helps to explain the jury’s verdict was the government’s expert witness.  In order to convince the jury that the intent of the free trips was to induce the physicians to order Precisions Lens’ IOLs rather than IOLs manufactured by another company, the government presented a medical device marketing expert who provided testimony on how companies use gifts and incentives to influence physicians to use their products.  The expert witness provided research that showed that gifts and other incentives trigger the impulse to reciprocate, even if it was just subconsciously, and even at levels disproportionate to the gift.

This expert also testified that although doctors generally claim that their medical decisions are not influenced by the financial benefits they receive from product manufacturers, these benefits do in fact have a strong influence on medical decision making.

Apparently, the jury believed this expert witness along with the other evidence presented by the government because the jury concluded that the free trips were unlawful kickbacks provided to the ophthalmic surgeons with the intent to induce their use of the Precision Lens’ IOLs in cataract surgeries reimbursed by Medicare.  The jury then entered a judgment against Precision Lens and Mr. Ehlen in the amount of $487,048,705.13, which in early 2024 was reduced to a mere $216.7 million.

The OIG and DOJ believe that the fraud and abuse laws level the playing field for all competitors. They argue that a company such as Precision Lens should be competing with the manufacturers of similar products, on price and quality, not by giving the physicians who order their products lavish gifts.  The expert testimony in this case supported this argument.  That expert testimony should be kept in mind any time a referral source considers providing something of value to a referring physician.

If you have a quick question about this, e-mail Henry Casale at hcasale@hortyspringer.com.

If you want to learn more about the OIG, the Anti-Kickback Statute, the Stark Law, the False Claims Act, exclusive agreements, the recent FTC regulations on noncompete agreements, and much more, check out our latest episode of The Kickback Chronicles podcast and also join us at the Hospital-Physician Contracts and Compliance Clinic Seminar in Las Vegas from November 14-16, 2024!

June 20, 2024

Posted on by Courtney Patterson

QUESTION:
We liked those tips for running an effective meeting that you gave two weeks ago. Do you have any more tips for running an effective meeting?

OUR ANSWER FROM HORTYSPRINGER ATTORNEY NICHOLAS CALABRESE:
Sure, let’s get right to them!

The first tip deals with post-meeting tasks.  The meeting attendees should have clear goals and assigned tasks after leaving the meeting.  For example, does research need to be done?  Be clear on the specific issue that is to be researched, how it is to be presented (a memo?  Oral report?), when it is due (one week prior to the next meeting?  At the next meeting?) and to whom the results are to be reported (the chair?  Everyone on the committee?).

The second one deals with how a chair keeps order at a meeting.  By strict adherence to Robert’s Rules of Order?  No!  We recommend that Robert’s Rules be looked to for guidance, but not be binding, and that the chair reserve the power to make all definitive procedural rulings.  Why?  Because if there is a parliamentarian on the committee, he or she can dominate the discussion just because he or she knows Robert’s Rules inside and out.  Also, it’s impractical to expect everyone on the committee to know all of the rules, and we don’t want to put them at a disadvantage during meetings.  So, don’t get bogged down in Robert’s Rules – think fundamental fairness.

The last one deals with how to record what happened at a meeting.  You should have someone take notes to prepare the minutes of the meeting.  The minutes record the decisions of the committee.  We’ll save what should be in minutes, and what should be left out of minutes, in a future Question of the Week, which hopefully, won’t be in two weeks.

If you have a quick question about this, e-mail Nick Calabrese at ncalabrese@hortyspringer.com.