September 5, 2019

QUESTION:        How do we handle a situation when there is a physician on the Credentials Committee who is married to another physician, and the spouse’s application is up for consideration?

ANSWER:           Every so often we run across physician couples.  In those instances, there may be a situation in which the conflict of interest rules for credentialing or peer review activities are implicated.  For example, imagine that Dr. Wright is appointed to the Medical Staff, is recognized as having good leadership qualities, and is appointed to the Credentials Committee.  Then, his spouse applies for Medical Staff appointment.  The application comes before the Credentials Committee and Dr. Wright is told “You can’t vote on the application” but Dr. Wright insists on voting, because  “I know this applicant better than any other applicant that has been before this committee!”

Well, that may be so, but Dr. Wright can’t vote!  Going back to compliance training and basic conflict of interest rules, Dr. Wright has a conflict of interest regarding his spouse’s application.  He is emotionally involved in the outcome, and probably financially involved too.  Of course, Dr. Wright can provide any relevant information he may have regarding his spouse and can answer any questions the Credentials Committee may have about her.  But, after doing so, it’s prudent for him to leave the Credentials Committee meeting, and not participate in the discussion of his spouse’s credentials or the vote on the application.  Also, the minutes should reflect that he left the meeting, the vote occurring after he left, and his return to the meeting.

June 27, 2019

QUESTION:        We heard that some hospitals have recruited physicians, had them sign employment contracts, then “red flags” are raised during credentialing, or the physician is denied appointment and clinical privileges.  Is there any language in an employment contract to help in those cases?

ANSWER:            We recommend that all employment contracts contain a provision that states:

If the Physician fails for any reason to commence performing services on the Commencement Date, the Employer may, at its option, cancel this Agreement by serving written notice of cancellation to the Physician.  In the event notice of cancellation is sent, the parties shall have no further obligation to one another.

The provision does not require an employer to cancel the contract, but does give the employer the option.  So, if the physician does not commence performing services because the application has not been acted on because the employer or the hospital is gathering further information, the employer may decide that it does not want to exercise the option at that time.  Conversely, if the “red flags” are significant, the employer most likely would cancel the contract.

While this language is useful to include, it is not a guarantee that a physician who has been recruited will go away quietly.   In fact, we have seen a number of cases where the physician still sues, so the best practice is to better align your recruitment and credentialing decisions so that you do not find yourself in the situation where a new recruit has any significant “red flags.”  For additional information, join us for our audio conference

Aligning Your Employment and Credentialing Decisions
July 2, 2019 – 1:00 pm to 2:00 pm (ET)

or contact us for information on how to obtain a CD or MP3.

March 21, 2019

QUESTION:        A physician came back from one of your leadership programs and was worried about whether our credentialing process complies with the Americans with Disabilities Act (“ADA”).  I’m confused about why we would need to comply with a law that only applies to employment.  Isn’t credentialing completely separate?

ANSWER:            It is true that the ADA is an employment law, so on its face, does not appear to apply to credentialing processes.  It is also true that “typical” credentialing practices would likely violate the ADA – because hospitals have traditionally treated health information being sought from applicants just as they would treat any other information being requested on an application form — references, verifications, licensure matters, etc.  As a result, in the credentialing process, health information is requested and reviewed at a stage that is likely analogous to the “pre-offer” stage under the ADA — the most restrictive stage of employment where employers aren’t yet permitted to request any health information.  (Under the ADA, employers do eventually get to request and consider everything necessary that is related to health.  It is more a question of managing the timing of those requests.)

As you pointed out though, credentialing IS different from employment, so why should we care if the process is compliant with the ADA – an employment law?  There are several reasons.  First, there are some hospitals that do directly employ physicians, and the ADA is clearly applicable to those relationships.  Second, even if the hospital isn’t the employer, most hospital-affiliated physician groups make employment contingent on the physician obtaining privileges at an affiliated hospital (i.e., successfully completing the credentialing process), and it is unclear whether a court would agree that one arm of a corporate entity can ask questions or seek information that the other arm of the same entity could not yet legally request.  Third, some jurisdictions have expanded the ADA to independent contractor relationships, and finally, there is a trend in court cases today where independent contractor physicians are claiming to be employees even when there are no employment agreements in place, claiming that the hospital exercises sufficient control over them to render them employees, for example, by making them comply with protocols, order sets, medical staff bylaws requirements.

One way to address concerns about the credentialing process is to change the timing of requesting and/or reviewing health information, asking detailed questions about the health of all applicants but waiting to review that information until after the Credentials Committee has determined that an individual is “otherwise qualified” for the clinical privileges requested on the basis of everything else that is being considered — education, training, experience, etc.  Only after that determination is made should the health questionnaire be reviewed.  Due to the sensitivity of that information, we also recommend that only one or two medical staff leaders review that information — reporting to the Credentials Committee that there are no concerns, or that concerns were raised and now the committee needs to discuss accommodations.

February 9, 2017

QUESTION:        Our Credentials Committee recently considered a request for a waiver, submitted by a physician who does not satisfy our threshold criteria for appointment.  A few years back, this physician pled guilty to a felony battery charge, which ultimately led to a downward spiral in which he violated a restraining order and had his probation revoked.  The physician was forthcoming about his criminal background when he submitted his application, though his explanation largely deflected blame for the matters leading up to his arrest, guilty plea, and probation violation.

Before processing the physician’s request for a waiver, the Chief of Staff and CMO have recommended that the physician be required to provide substantial information (including arrest and/or court records) regarding these matters.  The Chair of the Credentials Committee disagrees and believes that the Credentials Committee, which has the responsibility pursuant to the Medical Staff Credentialing Policy to consider and make recommendations regarding waivers, should simply talk with the physician to get his side of the story and, if any questions remain after that, decide whether to ask for additional information.  Who is right?

ANSWER:            Most Medical Staff Bylaws or Credentialing Policies call on the Credentials Committee to consider and make a recommendation on requests for waivers of threshold eligibility criteria.  Often, the Credentials Committee is given broad discretion regarding what information to consider when reaching its recommendation.  And, as the individual charged with planning the agenda and activities of the Credentials Committee, the Chair would have the ability to exercise much discretion in determining how the committee would go about considering any request for a waiver.

The Credentials Committee may wish to review the application (or preapplication) submitted by the individual or any explanation submitted by the individual in conjunction with his or her request for a waiver.  It may also wish to speak with the individual regarding the waiver request and the circumstances that led to the individual being ineligible.  Therefore, the Chair’s expressed preference for talking with the individual is not totally out of line.

However, in almost any circumstance where a waiver is to be granted, the Credentials Committee is going to want to also verify the facts with third parties – to corroborate the story that is being told by the individual requesting a waiver.  The only exceptions to this would be when the circumstance is so obvious that no verification is required.  This may be the case, for example, if the individual does not have a coverage arrangement with another member of the medical staff, but explains that this is because no one else is practicing in the subspecialty in which he or she is requesting privileges.  Another example would be an individual whose office or residence is farther from the hospital than required by Hospital policy, in which case the individual may simply be providing the relevant addresses and explaining why the small discrepancy in distance will not affect his or her ability to respond appropriately to patients.

In the case at hand, where the individual is requesting a waiver related to his criminal history, it is hard to imagine any scenario where the Credentials Committee, MEC, or Board could proceed in processing the request for a waiver without verifying the facts of the matter from third party sources.  If the medical staff leaders or hospital failed to conduct this verification, how could they later justify such inaction (for example, in a court case brought by a patient or staff member who alleged to have been harmed by the physician’s conduct)?  Merely taking the physician’s word for it seems especially unreasonable in light of the fact that his original explanation deflected blame.

So, who is right in this situation – the Chief of Staff and CMO (who want to request written documentation) or the Chair of the Credentials Committee (who wants to talk with the individual requesting the waiver)?  In the end, the answer is that both of them are right in some ways.  It is the Chair of the Credentials Committee who ultimately decides whether the matter gets placed on the Credentials Committee’s agenda and, if so, the information that is gathered in advance of the meeting to assist the Credentials Committee as it talks with the applicant.  But, the committee will not be able to do its job properly without obtaining substantial information to corroborate the physician’s story – and so the Chair would be wise to take the advice of the Chief of Staff and CMO and gather the relevant documents from the individual prior to the Credentials Committee meeting.

January 5, 2017

QUESTION:        Our hospital is negotiating with health insurers to perform delegated credentialing on their behalf.  The insurers are telling us that we cannot have a hearing officer option for conducting a hearing when providers are subject to certain adverse actions, such as termination of participation on a panel.  Is this correct?

ANSWER:            In our experience, this is how health insurers interested in delegating credentialing functions to health care providers interpret the Medicare Advantage rules for provider participation.  According to those rules, a health insurer involved in the Medicare Advantage program has to give physicians certain rights when it suspends or terminates the physician’s participation agreement.  Among those rights are the right to receive notice of the reasons for the action and the right to appeal that action.  The rules go on to talk about a hearing panel but only state that the insurer (or insurer’s delegate) must ensure that the majority of the hearing panel members are peers of the affected physician.

Now you could follow the constitutional principle of English law that instructs that “everything that is not forbidden is permitted” and go ahead and draft your delegated credentialing policies so that they allow for the hearing officer alternative to using a hearing panel.  However, this may create headaches down the road since health insurers have to perform a pre-delegation audit of your policies and procedures before delegating credentialing and will most likely require a revision to your policies if they permit the hearing officer option.  Some providers, such as hospitals, use their existing medical staff credentialing policies and procedures to build off of to put delegated credentialing processes in place.  To the extent that a hospital is interested in doing so and its existing Credentials Policy allows for the hearing officer option, it can simply revise its Credentials Policy to indicate that the option is not available when a hearing is offered for delegated credentialing purposes (as opposed to medical staff purposes).

October 27, 2016

QUESTION:        We have an applicant who had significant issues at the last hospital where she practiced, significant enough that she left while under investigation.  The NPDB report provided us with very little information, really only enough to know that the matter appeared to involve behavior and not clinical care, but it certainly was not enough to feel like we know what happened.  The hospital won’t respond to our requests for information, and when we formally asked the applicant for additional information, her lawyer sent us a letter telling us she is bound by a “legally binding” settlement agreement not to disclose what happened except that she had decided not to pursue the investigative process.  What can we do?

ANSWER:            This is a classic example of an incomplete application.  Settlement agreement or no, you should advise the applicant that she has the burden of producing information sufficient to evaluate her qualifications.  You can agree to keep any information provided to you by the applicant, and by the other hospital, confidential for use in your credentialing process only.  However, you cannot process this application without some information to determine the basis for the physician’s resignation while under investigation.  If she does not provide the information within a reasonable time, you can advise her that her application will be deemed to have been withdrawn.  It is helpful to have very clear and direct language in the Medical Staff Bylaws to emphasize that the burden is on the applicant to provide information necessary to assess qualifications, as well as a statement that incomplete applications will not be processed.  Don’t be dissuaded by the existence of a settlement agreement – the courts have supported the need to obtain information relevant to the credentialing process.

In Scott v. Sisters of St. Francis Health Services, 645 F. Supp. 1465 (N.D. Ill. 1986), St. James Hospital refused to forward Dr. Mac Scott’s application to the Credentials Committee because it had been unable to obtain information regarding his suspension and subsequent resignation from the medical staff of Ingalls Hospital.  Dr. Scott had sued Ingalls Hospital and, as part of a settlement agreement, the hospital could only respond to inquiries about Dr. Scott with a form letter prepared by Dr. Scott’s attorney, which provided no meaningful information upon which to make a recommendation regarding appointment.

Dr. Scott sued, alleging:  (1) that the refusal to forward his application to the Credentials Committee was a violation of his civil rights and racially motivated; and (2) that the hospital president had exceeded her authority by refusing to forward the application.  The federal district court rejected those arguments and entered judgment in favor of the Sisters of St. Francis Health Services, stating:

Scott’s assertion, however, does not take into account the fact that the bylaws provide that Sister is to forward only completed applications to the Credentials Committee for consideration.  Sister discussed with Scott the problems he experienced at Ingalls and the need for additional information from Ingalls about his suspension.  Sufficient evidence was presented at trial to show Scott’s application was incomplete, and Scott’s efforts prevented St. James from obtaining needed information from Ingalls.  As such, Sister’s decisions to not forward Scott’s applications were not outside the bounds of her authority as President of St. James nor indicative of any intent to discriminate against Scott on the basis of his race.  [Emphasis added.]

Additional cases that have held that a hospital has no duty to process an incomplete application include Evers v. Edward Hospital Association, 617 N.E.2d 1211 (Ill. Ct. App. 1993), and Eyring v. East Tennessee Baptist Hospital, 950 S.W.2d 354 (Tenn. Ct. App. 1997).  (While Scott and Evers involved the initial credentialing process, Eyring was a reappointment case.)

July 14, 2016

QUESTION:        We have several ambulatory surgery centers (“ASCs”) in our System.  We recently looked at the bylaws of the ASCs and they are quite antiquated.  Even more of a concern, we learned that the credentialing process in the bylaws is not being followed at the ASCs.  We need to work with the ASCs to change their bylaws, but where do we start?  The medical staff bylaws (and credentials policy) for the hospitals in our System are now all very similar.  Can we incorporate the ASCs into the medical staff bylaws?

ANSWER:           You asked if the ASCs could be incorporated into the medical staff bylaws of the hospitals in your System.  This approach has the appeal of simplicity.  However, given the vast differences in the size, structure, and organization of the medical staffs at the ASCs and the medical staffs at the hospitals, this option seems awkward at best.  There might also be some regulatory issues with this approach.  Specifically, the ASCs are required to have their own medical staffs in some states.  Thus, in order for the medical staffs of the ASCs to function as a part of the medical staffs of the System hospitals, it could be necessary to seek an exception from the Department of Health.

Another option would be to take the medical staff documents that were prepared for the System hospitals’ medical staffs and use them as a starting point for the creation of governance documents for the ASCs.  We recommend this approach for several reasons.  First, this approach would provide an opportunity to update the ASC bylaws to reflect current practices.  Second, this approach would help ensure that the ASC bylaws are well-drafted and in compliance with controlling law.  Third, while the hospital medical staff documents would have to be substantially pared down and streamlined for use by the ASCs, these documents would include key provisions, such as a System Credentials Committee, a Professional Affairs Committee to resolve disputes among the Medical Executive Committees, and language to ensure that decisions at one System facility are applicable at all System facilities, which would facilitate uniformity within the System.

May 26, 2016

QUESTION:        Do hospital-employed physicians have a conflict of interest with respect to private practice physicians in matters involving credentialing?  Privileging?  Peer review?

ANSWER:           Some independent physicians may feel that employed physicians should not be involved in leadership positions or that there should be quotas pertaining to the number of employed physicians in these positions for fear that their employment relationships could influence their actions. Legally, there is no support for viewing an employment relationship as a disqualifying factor. And we have rarely seen the type of political pressure from management that independent physicians worry about being brought down on employed physicians.

Of course, if a specific concern is raised about an individual’s participation in any given process, it always makes sense to consider whether an individual’s employment would result in a conflict of interest under the guidelines that have been adopted by the medical staff.  But practically, it seems difficult to imagine a medical staff adopting bylaws documents that exclude employed physicians from serving in leadership positions – or from otherwise participating in credentialing and peer review activities – given the large number of physicians who are now employed by hospitals.

February 18, 2016

QUESTION:        A registrant at our recent Complete Course for Medical Staff Leaders in Naples asked: Can you change the bylaws AFTER someone’s already credentialed, even if it might make that physician ineligible at recredentialing (e.g., thresholds)? If ineligible, is that reportable to the NPDB?

ANSWER:          Yes and No. An organization can decide to revise its eligibility criteria; it may choose to “grandfather” current staff members (upheld by several courts in cases involving board certification, when potential applicants alleged disparate treatment). However, grandfathering is not required. An organization can decide to apply the new criteria uniformly.  It is fair to provide advance notice and an opportunity for those affected to be heard (and to become eligible, if possible).

Leaders should carefully assess the need to apply the standard to current members and to articulate the quality rationale. A determination of ineligibility is not an adverse professional review action and is not reportable to the National Practitioner Data Bank.