QUESTION:
Can a hospital operating multiple campuses under a single CCN number have an exclusive contract with a physician group to exercise clinical privileges at one campus and an exclusive contract with another group to exercise privileges at another campus?

ANSWER FROM HORTYSPRINGER ATTORNEY DAN MULHOLLAND:
The guidance we have received over the years has been that if a Medicare‑certified hospital has multiple campuses, clinical privileges cannot be limited solely to one campus.

This guidance is based on reading the Medicare Conditions of Participation and the official Interpretive Guidance issued by CMS in conjunction with the provider‑based rules.  The COPs and Interpretive Guidance state:

42 CFR §482.22 Condition of Participation: Medical Staff
The hospital must have an organized medical staff that operates under bylaws approved by the governing body, and which is responsible for the quality of medical care provided to patients by the hospital.

Interpretive Guidelines §482.22
The hospital must have one medical staff for the entire hospital (including all campuses, provider‑based locations, satellites, remote locations, etc.).  For example, a multi‑campus hospital may not have a separately organized medical staff for each campus.  On the other hand, in the case of a hospital system, it is permissible for the system to have a unified and integrated medical staff (hereafter referred to as a “unified medical staff”) for multiple, separately certified hospitals.  The medical staff must be organized and integrated as one body that operates under one set of bylaws approved by the governing body.  These medical staff bylaws must apply equally to all practitioners within each category of practitioners at all locations of the hospital and to the care provided at all locations of the hospital.  The medical staff is responsible for the quality of medical care provided to patients by the hospital.

The provider‑based rules state:

42 CFR §413.65 (d) Requirements applicable to all facilities or organizations.  Any facility or organization for which provider‑based status is sought, whether located on or off the campus of a potential main provider, must meet all of the following requirements to be determined by CMS to have provider‑based status:

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(2) Clinical services.  The clinical services of the facility or organization seeking provider‑based status and the main provider are integrated as evidenced by the following:

(i) Professional staff of the facility or organization have clinical privileges at the main provider.

This essentially means that while a hospital with multiple campuses could have an exclusive contract that limits the exercise of clinical privileges to members of the group at all campuses and provider‑based locations, an exclusive contract limiting the exercise of privileges to physicians in the contracting group to one campus would not work since other physicians with privileges at the other campuses could claim that they have the right to exercise those privileges system‑wide.

Aside from the CMS rules, a hospital would be bound by exclusivity provisions in existing hospitals, so if there is an exclusive contract in place covering all locations, the hospital would be in breach of contract if it allowed physicians outside the group to exercise clinical privileges at another hospital.

The risk of non‑compliance with this interpretation of the rules is most likely a citation on a survey (either a routine one or one triggered by a complaint) which could be easily fixed by allowing privileges to be exercised at each campus.

Moreover, notwithstanding the rule that privileges extend to each campus, a physician can always choose to only practice at one campus, and if the physician is employed by the hospital or health system, the employer could tell the physician that he or she must limit the exercise of privileges to specific campus(es).

If you have a quick question about this, e‑mail Dan Mulholland at DMulholland@hortyspringer.com.