May 23, 2019

QUESTION:        We have a group practice that is affiliated with our health system.  The group practice employs physicians and advanced practice clinicians.  Two months ago, one of the employed physicians was given notice that the group was not going to renew his contract and his employment would expire in 90 days.  The contract provides that when his employment expires, his appointment and privileges at all health system hospitals expires too.

Last night, the Medical Executive Committee at one of our system hospitals started an investigation into complaints about this physician’s behavior.  If the investigation is not completed by the time his contract expires are we required to report this to the National Practitioner Data Bank as a resignation while under an investigation?
ANSWER:            The answer to this question is no.  You would not have to file a report with the Data Bank because the expiration of appointment and privileges was triggered by an expiration in his employment contract.   There is helpful guidance on this issue in the NPDB Guidebook.  In a related scenario, outlined in the Q&A: Reporting Clinical Privileges Actions section of the Guidebook, it noted that a report would not have to be submitted: “The termination was not a result of a professional review action and, therefore, was not reportable. It does not matter that the employment termination, which was a result of the hospital’s employment termination process, automatically resulted in the end of the practitioner’s clinical privileges.”

While your situation is a little different, the same principle should apply.  The physician did not resign during, or in exchange for not conducting, an investigation.  Rather, the physician’s appointment and privileges automatically expired as a result of the contract expiration.  The controlling act was the expiration of the physician’s contract which affected his appointment and privileges.

As a practical aside, we recommend that serious consideration be given to when an investigation should be commenced.  The Medical Executive Committee should only commence an investigation when it has exhausted collegial, progressive steps or if there are extreme circumstances, such as a pending precautionary suspension.

If the subject physician is employed by a system-affiliated group, there is nothing wrong with considering the physician’s employment status prior to the Medical Executive Committee commencing a formal investigation.  Generally, in these situations, when a physician’s employment is set to expire or be terminated, there would be no need for a formal investigation.  The problem behavior should not be ignored but less formal steps, such as the implementation of a performance improvement plan for behavior, could be taken in the interim to facilitate the smooth and orderly operation of the hospital.  A formal investigation is not likely the best use of your time or resources.

May 11, 2017

QUESTION:        Our hospital is about to sign a letter of intent to merge with a regional health system.  The lawyers want us to also sign a “joint defense agreement.”  What is that and does it make sense to do so?

ANSWER:            A joint defense agreement or “JDA” memorializes the intention and understanding of parties to a prospective merger or acquisition regarding:  (1) particular communications that have been made between them, (2) the contents of such communications, and (3) any other work product containing or referring to such communications shall remain confidential and protected from disclosure to any third party.  The JDA also permits the parties and their respective attorneys to share and exchange information among themselves and with any retained experts or consultants without waiving any privilege that may apply to that information.  It is usually a good idea to have a JDA in any merger transaction.  The courts have recognized that the joint defense and common interest privileges will protect privileged communications between the parties from disclosure.  Given the recent aggressive posture of the FTC and state attorney generals who have challenged numerous health care mergers, a JDA is not only a good idea, it is a critical tool for self-preservation.