Question:

Our hospital requires employees to submit an excuse from their physician if they are out of work for a certain number of days.  After some unfortunate incidents, the hospital also calls the physician to verify that he or she wrote the excuse.  Recently, an employee claimed this practice violated the employee’s rights under the Americans with Disabilities Act (“ADA”) and HIPAA.  Is he right?

Answer:

No.  With respect to the ADA issue, the federal Equal Employment Opportunity Commission (“EEOC”) has said it does not violate the ADA for an employer to ask for a doctor’s note to explain an absence.  Here’s the EEOC guidance:

May an employer request an employee to provide a doctor’s note or other explanation to substantiate his/her use of sick leave?

Yes. An employer is entitled to know why an employee is requesting sick leave. An employer, therefore, may ask an employee to justify his/her use of sick leave by providing a doctor’s note or other explanation, as long as it has a policy or practice of requiring all employees, with and without disabilities, to do so.

With respect to HIPAA, when an employee gives an employer (such as the hospital) a doctor’s excuse to document that the employee was ill, that excuse becomes part of the hospital’s “employment records.”  These employment records are excluded from the definition of protected health information, so HIPAA doesn’t apply to them.

Here’s how the federal government addressed this issue in the preamble to the 2002 final rule:

When the individual gives his or her medical information to the covered entity as the employer, such as when submitting a doctor’s statement to document sick leave…that medical information becomes part of the employment record, and, as such, is no longer protected health information.

67 Fed. Reg. 53181, 53192 (Aug. 14, 2002).

If the hospital calls a physician to verify an excuse, the hospital is not in violation of HIPAA because it is not disclosing information covered by HIPAA.  However, the physician who receives the phone call should proceed cautiously to avoid violating HIPAA.

Question: What did the Supreme Court rule regarding the validity of the health reform law?

Answer: The most important issue before the Supreme Court was the constitutionality of the Act’s INDIVIDUAL MANDATE TO PURCHASE HEALTH INSURANCE.  The court held that the government cannot force people to purchase health insurance – but can tax them for not having it.  So, for all intents and purposes, the Act has been upheld.

To read the full opinion of the Supreme Court:

http://www.supremecourt.gov/opinions/slipopinions.aspx

Want to know more?  Visit the Supreme Court’s website, where you can read the briefs, listen to oral arguments, and more!

Question:

Our hospital employs physicians in a separate entity that is wholly owned by the Hospital.  Do we have to comply with Medicare’s 3 Day Window Rule?  And, if so, how?

Answer:

Yes.  Medicare’s 3 Day Window rule applies to all diagnostic technical claims, and all non-diagnostic technical claims that are related to an admission, and are performed on the day of admission or at any time within 3 calendar days prior to the admission by the admitting hospital or by an entity that is wholly owned or operated by the admitting hospital.

In its November 28, 2011 Physician Fee Schedule rules, CMS stated that the recent change to the definition of when a non-therapeutic claim will be presumed “related” to the inpatient admission will increase the number of Part B claims that will be subject to the 3 Day Window.

This change went into effect on June 25, 2010.  A hospital may overcome this presumption if it is able to show that the pre-admission non-diagnostic service was clinically distinct or independent from the reason for the beneficiary’s admission using CMS Condition Code 51 “Attestation of Unrelated Outpatient Non-Diagnostic Service.”

CMS also emphasized that while this rule excludes professional services, it applies to the technical component of services provided in a physician practice or other entity that is operated directly by the admitting hospital; that is a provider-based service of the admitting hospital; or is provided by a separate entity that is wholly owned or wholly operated by the admitting hospital.  CMS has developed a new modifier (PD) to be used by the wholly owned or wholly operated entity for services rendered on or after January 1, 2012.

Wholly owned means the admitting hospital is the sole owner.  Wholly operated means that the admitting hospital has exclusive responsibility for conducting and overseeing the entity’s operations.

Please note that exceptions to the rule do exist.  The 3 Day Window rule does not apply to Ambulance Services, Maintenance Renal Dialysis or Part A Services furnished by an SNF, HHA, Hospice and Critical Access Hospital.  Furthermore, in its November 28, 2011 Physician Fee Schedule rules, CMS stated that while they would be considered to be “entities” under the rule, due to the manner in which they are currently being reimbursed, the 3 Day Window Rule cannot be practically applied to a Rural Health Clinic or a Federally Qualified Health Clinic.

Question:

I generally like the idea of strengthening the criteria for appointment to include such things as board certification, no exclusion from Medicare, and no felony or misdemeanor convictions.  But what happens to the person who made a mistake in the past?  Will he, or she, be forever banned from practicing at a top-notch hospital?

Answer:

This was a question we received at a recent on-site educational program.  It was asked by a physician leader who was also a distraught mom.  Her son had been convicted of a DUI following a party celebrating completion of his first year of internship training.  When the son applied for a license, based on the DUI, the state board gave the new young doctor a probationary license.

The mom’s worry was palpable.  She wanted to know if this single mistake would forever change her son’s life.

The answer is probably “yes” and “no.”  In all likelihood, the young doctor is going to have to disclose the DUI and the probationary license on future applications for appointment, employment, managed care participation, and licensure.  It is best to be forthcoming.  Mistakes will often be forgiven, but no one will be anxious to forgive a physician who misrepresented or omitted uncomfortable facts on an application.  That quickly becomes an issue of integrity, and integrity, especially for physicians, is nonnegotiable.

Question: We understand CMS finalized the changes to the Medicare Conditions of Participation contained in its proposed rule issued back in October.  We also understand that these changes were intended to promote “flexibility” but note that, in the case of standing orders, CMS has implemented a number of requirements where there were none before.  Can you tell us about these changes?

Answer:

You are correct on all counts.  Final changes to the Medicare Conditions of Participation were published in the Federal Register on May 16.  The purpose of these revisions is to streamline and simplify CMS’s regulations.

That being said, CMS has now adopted a number of requirements related to standing orders, order sets, and protocols, where, as you said, there were none before.  In its Final Rules, CMS lays out the process it expects to be in place in order for a hospital to use pre-printed and electronic standing orders, order sets and protocols for patient orders.  This process includes the following steps:

(1)        establish that such orders and protocols have been reviewed and approved by the medical staff in consultation with the hospital’s nursing and pharmacy leadership;

(2)        demonstrate that such orders and protocols are consistent with nationally recognized and evidence-based guidelines;

(3)        ensure that the periodic and regular review of such orders and protocols is conducted by the medical staff, in consultation with the hospital’s nursing and pharmacy leadership, to determine the continuing usefulness and safety of the orders and protocols; and

(4)        ensure that such orders and protocols are dated, timed, and authenticated promptly in the patient’s medical record by the ordering practitioner or another practitioner responsible for the patient’s care.

Seems simple enough, right?  But we know from experience that most hospitals have never had this type of formal review process in place and that oftentimes the documentation for the protocols that are carried out every day reside in a long forgotten three?ring binder on a shelf somewhere.  This means many hospitals will need to begin combing through those binders and desk drawers in order to catalog and review the various protocols in place at their facility.

So much for streamlining!

To learn more about the implications of CMS’s Final Rule, please join Horty Springer attorneys Charles Chulack and Ian Donaldson for a special audio conference on June 21, 2012, where they will discuss the new Medicare CoP revisions to the patient care requirements, including verbal orders, standing orders, patient restraints, and medication administration, and how these revisions will impact the patient care processes and policies in your hospital.

Question:

We recently read the final regulations revising the Medicare Conditions of Participation and noticed several revisions dealing with patient care issues.  Does this mean that we will have to revise our Medical Staff rules and regulations?  If so, what changes will we need to make?

Answer:

The final regulations revising the Medicare Conditions of Participation do indeed make changes to several patient care areas, including verbal orders, standing orders, self-administration of medications, and reporting of certain restraint-related deaths, that will require revisions to rules and regulations.  Some of the changes are “permissive” revisions, which simply means that they now allow, instead of require, hospitals to do certain patient care-related things that they were not permitted to do in the past.  For example, the Centers for Medicare & Medicaid Services are now permitting hospitals to have an optional program for patients, or their support persons, on the self-administration of hospital-issued medications or medications the patient brings into the hospital.  However, if a hospital wishes to pursue such a program, medical staff rules and regulations must comply with the revised Conditions of Participation and address when and how self-administration may occur, including the performance of an assessment of the patient’s capacity, or the caregiver’s capacity, to self-administer the specific medication.

Similarly, hospitals may continue to use standing orders and evidence-based protocols under the revised Conditions of Participation, but must now meet certain conditions, including review and approval by the medical staff and the hospital’s nursing and pharmacy leadership and periodic review for the safety and usefulness of the standing orders and protocols.  These conditions should be outlined in a section on standing orders in the rules and regulations, or a policy that is cross-referenced in the rules and regulations, to ensure that the medical staff is complying with the Conditions of Participation in the implementation and use of such orders.

For more information on this topic, please join Ian Donaldson and Charlie Chulack on Thursday, June 21, 2012 from 1:00 p.m. to 2:30 p.m. ET for the audio conference “The New Medicare CoPs and Patient Care:  Can High Quality Care & Low Administrative Burdens Coexist?”  Ian and Charlie will discuss in detail the patient care issues addressed in the revised Medicare Conditions of Participation and the changes the medical staff will have to make to its rules and regulations as a result.

Question:

Just when I thought I finally understood all of the Medicare Conditions of Participation (“CoPs”), I understand that CMS has gone about rewriting many of them.  Why did they do that?

Answer:

Basically, the President made CMS do it.  By Executive Order 13563,  entitled “Improving Regulations and Regulatory Review,” the President directed each executive agency to establish a plan for ongoing retrospective review of existing significant regulations, to identify those rules that could be eliminated as obsolete, unnecessary, burdensome, or counterproductive, or that could be modified to be more effective, efficient, flexible, and streamlined.

CMS was up for the challenge.  As described in CMS’s regulatory impact analysis that preceded the new CoPs as published in the Federal Register:

CMS has not reviewed the entire set of CoPs for Hospitals in many years.  These requirements have grown over time and, while often revised, have not been subject to a complete review.  CMS staffs as well as CMS stakeholders, including TJC, the American Medical Association, the AHA, and many others, have identified problematic requirements over the years.  Accordingly, we decided to conduct a retrospective review of the CoPs imposed on hospitals and to remove or revise obsolete, unnecessary, or burdensome provisions, and to increase regulatory flexibility while identifying and adding opportunities to improve patient care and outcomes.  We analyzed all potential reforms and revisions of the CoPs for both the costs and the benefits that they would bring to hospitals and CAHs [critical access hospitals].  Based on our analysis, we decided to pursue those regulatory revisions that would reflect the substantial advances made in healthcare delivery and that would benefit hospitals and CAHs through cost savings.

And what kind of cost savings are we talking about here?  According to CMS’s Summary of Costs and Benefits, the top cost savings come from the following areas of change:

• §482.22 Medical Staff  – $330,000,000;
• §482.54 Outpatient services – $300,000,000;
• §482.24 Medical records services – $170,000,000;
• §482.23 Nursing services – $110,000,000.

And the true value of these changes, if they even come close to these estimates?  Priceless.

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Join HortySpringer partners Dan Mulholland and Henry Casale as they provide a thorough overview of what is in the new CoPs and what you need to know NOW to comply.

The New Medicare Conditions of Participation
June 7, 2012
1:00 – 2:30pm

Question: A registrant at our recent Complete Course for Medical Staff Leaders asked: “Should an AHP be on the Credentials Committee?”

Answer: CMS has for years required that non-physician practitioners who provide a “medical level of care” be credentialed and privileged as required by CMS.  (These include Advanced Practice Nurses such as Nurse Midwives, CRNAs and Nurse Practitioners and Physician Assistants.  However, not everyone realizes that CMS expects RNFAs to be privileged through the Medical Staff process.  See The Interpretive Guidelines in the Medicare State Operations Manual Condition of Participation: Surgical Services.)  Now, the newly revised Medicare Conditions of Participation (CoPs) published within the last week explicitly encourage hospitals to appoint non-physicians to the Medical Staff and to serve in expanded roles, in accordance with state laws.

Some Credentials Committees already have a subcommittee to deal with privileging for non-physician professionals.  One or more APRNs and PAs can be included as members of a Credentials Committee or a subcommittee or they can be invited when needed.  Their input can be valuable for development of eligibility criteria for privileging.  (Note that nomenclature is evolving; APRNs and PAs may prefer not to be lumped into a category called “AHPs.”  Some organizations refer to these individuals collectively as mid-level providers, Advanced Practice Clinicians or Advanced Practice Professionals.)

What will these provisions of the new CoPs mean for your hospital and Medical Staff?  What’s required and what’s up to each organization?  Join HSM for an audio conference on June 28 as part of our 4-part series on practical implications of the new CoPs.

Question:

Our hospital has a nonprofit subsidiary that employs physicians.  Will Medicare payments to this subsidiary be covered by the new “3-day window rule”?

Answer:

No, as long as the hospital does not completely control the operations of the subsidiary. Under the 3-day window rule, a hospital (or an entity that is “wholly owned” or “wholly operated” by the hospital) must include on the claim for a Medicare beneficiary’s inpatient stay, the diagnoses, procedures, and charges for all outpatient diagnostic services and admission-related outpatient non-diagnostic services that are furnished to the beneficiary during the 3-day payment window. 42 C.F.R. §412.2(c)(5).  Diagnostic services have long been subject to this rule. The current effective date for this rule as it pertains to non-diagnostic services is July 1, 2012.  The key question is whether a subsidiary employing physicians is “wholly owned” or “wholly operated” by the hospital so as to trigger the applicability of the rule.

Medicare regulations, at 42 C.F.R. §412.2(c)(5)(i), provide:

An entity is wholly owned by the hospital if the hospital is the sole owner of the entity.  An entity is wholly operated by a hospital if the hospital has exclusive responsibility for conducting and overseeing the entity’s routine operations, regardless of whether the hospital also has policymaking authority over the entity.

Commentary from CMS issued with the 2012 physician fee schedule program payment policies in the November 28, 2011 Federal Register provided some guidance on how CMS interprets the “wholly owned and wholly operated” provisions of the 3-day window rule.  CMS stated that at the present time, physician practices self-designate whether they are owned or operated by a hospital on the 855B enrollment form filed with Medicare.  76 Fed. Reg. 73285.  These regulations went on to restate guidance from 1998 regulations when the 3-day window rule was first adopted and applied to diagnostic services.  However, this commentary was not particularly helpful in that it simply gave examples of physician practice entities wholly owned by a hospital, which CMS said would be subject to the 3-day window rule, contrasted with a physician practice entity and a hospital both owned by a third corporation, which CMS said would not be subject to the rule.  The commentary never addressed the meaning of “wholly owned” or “wholly operated” beyond parroting the regulations.

The Medicare Claims Processing Manual, CMS Pub. 100-04, §90.7, as amended by Transmittal 2373 (Dec. 21, 2011), also restated the regulations when it purported to give guidance on the meaning of “wholly owned” or “wholly operated,” by saying:  “Wholly owned or wholly operated entities are defined in 42 CFR §412.2; ‘An entity is wholly owned by the hospital if the hospital is the sole owner of the entity.’  And, ‘an entity is wholly operated by a hospital if the hospital has exclusive responsibility for conducting and overseeing the entity’s routine operations, regardless of whether the hospital also has policymaking authority over the entity.'”

Since CMS has never issued any guidance as to the meaning of “wholly owned” or “wholly operated” other than the provisions cited above, these terms are to be interpreted based on their plain meaning. As a nonprofit corporation, the subsidiary in your case is not “owned” by anyone since nonprofit corporations have no owners or shareholders.

Furthermore, the subsidiary would not be “wholly operated” as long as the hospital does not have exclusive responsibility for conducting and overseeing the routine operations of the subsidiary.  As long as the subsidiary has separate staff who are responsible for its day-to-day operations, it would not be considered to be wholly operated by the hospital for the purposes of the 3-day window rule.

Question: Our hospital and MEC members just won summary judgment upholding denial of reappointment to a physician whose behavior was disruptive for years.   This has consumed everyone’s attention for too long.  Our new Vice Chief of Staff suggests developing a Physician-Hospital Compact based on his experience at another hospital. Could this help put this all behind us?

Answer: Many hospitals and physicians have found that the process of working together on developing a Compact has helped the board, management team, physician leaders, and both independent and employed physicians develop better lines of communication and prepare them for the dramatic changes facing organizations today.  Litigation such as you have experienced may not feel much like a victory after years in court.  A Compact can build on the hospital’s mission, vision and values statement to provide a framework for the future, in terms of principles of appropriate behavior that all applicants for appointment and reappointment would sign.  That may help avoid this kind of litigation but, more importantly, foster trust and commitment to common goals.

We think that a carefully crafted Compact is a worthwhile idea, and can help focus efforts to improve care for patients and also improve the process of providing care. A successful Compact must include not just Guiding Principles, but also Action Steps to make them happen.

Join senior partners Linda Haddad and Barbara Blackmond as they discuss the benefits of a Compact, and how to develop one that yields measurable results, at our audio conference on May 22, 2012.