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Medical Staff Challenges: Overcoming
Conflicts Between Hospitals and Medical StaffsPeer Review, Governing Documents, and Board Governance
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have any questions, please contact Customer Service at 1-800-926-7926 ext. 1.
WEDNESDAY, MAY 22, 2019
Presenting a live 90-minute webinar with interactive Q&A
Jennifer A. Hansen, Partner, Hooper Lundy & Bookman, San Diego
Annie Chang Lee, Attorney, Arent Fox, Los Angeles
Robin Locke Nagele, Principal, Post & Schell, Philadelphia
Elizabeth A. (Libby) Snelson, Esq., President, Legal Counsel for the Medical Staff, St. Paul, Minn.
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Medical Staff Challenges:Overcoming Conflicts Between
Hospitals and Medical Staffs
Part I:
Inter-Relationship of the Board, Administration and Medical Staff
Robin Locke Nagele
Post & Schell, P.C.
6
? ?Board
Board Chair
Dept. Chiefs
Committee Chairs
MECMedical Staff
President CMO
Physicians
CNOCOOCFO
CEO
Hospital Staff
6
Origins of Self-Governing Medical Staff
• Corporate Practice of Medicine Doctrine▪ Non-professionals are not qualified to oversee
professional competence/quality of care
▪ Administrative/business objectives should not intrude on the exercise of independent medical judgement
• Incorporated into:▪ The Joint Commission Accreditation Standards
▪ CMS Conditions of Participation for Hospitals
▪ State law licensing laws
7
TJC Conflict of Interest Provisions1. LD.02.02.01
A. The Governing Body, Senior Managers and Leaders address any conflict of interest involving individual leaders that could impact safety and quality of care, treatment and services.
➢ Written policy that (i) defines conflicts, (ii) requires disclosure, and (iii) sets forth how they will be addressed.
2. LD.04.02.01
A. The Leaders address any conflict of interest involving Licensed Independent Practitioners and/or staff that could impact the safety or quality of care, treatment and services.
➢ Written policy that (i) defines conflicts, (ii) requires disclosure, and (iii) sets forth how they will be addressed.
➢ Hospital reviews relationships with other care providers, educational institutions, manufacturers and payers to identify conflicts and ensure legal compliance.
➢ Conflict policies and information is available to all upon request.
8
TJC Conflict Resolution Provisions
1. LD.02.04.01A. The Hospital manages conflict between leadership groups to
protect the quality and safety of care.
➢ Good relationships thrive when leaders work together to develop the mission, vision and goals of the hospital, encourage honest and open communication, and address conflicts of interest.
➢ Leadership conflict that is not managed effectively can threaten health care safety and quality.
➢ Must have a management conflict process in place.
➢ Must identify an individual with conflict management skills.
➢ Must manage conflict quickly, using internal or external resources.
➢ Consider skills training for leaders.
➢ The goal is not conflict resolution but avoiding adverse impact on quality and safety of care.
9
Key Functions of the Medical Staff
1. Credentialing/privileging
2. Practitioner peer review/FPPE/OPPE
3. Formal corrective action
4. Fair hearing process
5. Quality surveillance of the healthcare team
6. Implementation of practice standards through bylaws, rules, regulations and policies
7. Strategic planning/resource management
8. State and federal reporting
10
Impact of Physician Employment
1. Physician has dual or triple reporting
A. Hospital
B. Physician Practice
C. Academic Leadership (in an AMC setting)
2. Medical staff bylaws vs. employment contract
3. Credentialing vs. employment vetting
4. Staff privileges vs. work duties (including academic obligations)
5. Peer review vs. discipline
6. Revocation vs. termination
7. Fair hearing plan vs. employee handbook
11
Issues to Consider
1. If a physician is terminated, what happens to his/her medical staff privileges?
2. If a physician’s privileges are revoked, what impact on employment?
3. What NPDB or state reporting requirements apply in the case of revocation or termination?
4. If a physician has serious clinical quality issues, should this be pursued through the medical staff or employment process?
1. What type of hearing is required, if any?
2. What are the implications for legal liability/immunity protections?
12
Legal Exposures
1. From Patients:A. Corporate Negligence/Negligent Credentialing
B. Ostensible Agency/Vicarious Liability (hospital as “deep pocket”)
2. From Physicians:
A. Federal civil rights & antitrust laws
B. Contract, defamation, tortious interference
3. From Government and qui tam relators:A. False Claims Act (and “wire fraud”) enforcement for
“worthless” and “medically unnecessary” services
B. Physician whistleblower cases
13
Sources of Legal Protection
1. Immunity
A. Health Care Quality Improvement Act (HCQIA)A. Immunity from Damages (except federal civil
rights)
B. No immunity from injunctive relief
B. State Peer Review Immunity Statutes
2. Privilege/Confidentiality
A. Federal Patient Safety and Quality Improvement Act (PSQIA)
B. State Peer Review Privilege Statutes
C. State Patient Safety Privilege Statutes
14
z
Elizabeth ”Libby” SnelsonLegal Counsel for the
Medical Staff [email protected]
MEDICAL
STAFF
DOCUMENTS
z
Elizabeth A. Snelson
Legal Counsel for the
Medical Staff PLLC
Causing ConflictsEffect/Weight of Bylaws
Content
Amendment Procedures
Solving ConflictsEmployed Physicians
Conflicts of Interest
Peer Review
Code of Conduct
Medical Staff-Board conflict
resolution process
16
z
z
Medical Staff Bylaws
Medical Staff Rules and Regulations
Medical Staff Policies
17
z
Effect/Weight of Bylaws
Content
Amendment Procedures
Sources of Conflicts
Elizabeth A. Snelson
Legal Counsel for the
Medical Staff PLLC
18
z
Effect/Weight of Bylaws
Elizabeth A. Snelson
Legal Counsel for the
Medical Staff PLLC
oBylaws as
Contract
oBylaws Binding
on Parties
19
z
Content
Elizabeth A. Snelson
Legal Counsel for the
Medical Staff PLLC
oJoint Commission
Standard MS 01.01.01
oCheck State Law
o Findable? Applicable?
20
z
Amendment Procedures
Elizabeth A. Snelson
Legal Counsel for the
Medical Staff PLLC
oNo Unilateral
Amendment
oJoint
Commission
Standard MS
01.01.01
21
z
Solving ConflictsEmployed Physicians
Conflicts of Interest
Code of Conduct
Elizabeth A. Snelson
Legal Counsel for the
Medical Staff PLLC
[email protected] Photo by Unknown Author is licensed under CC BY-NC
22
z
ADDRESS IN MEDICAL STAFF
DOCUMENTS Elizabeth A. Snelson
Legal Counsel for the
Medical Staff PLLC
23
z
Employed Physicians
Subject to the same credentialing requirements
Subject to peer review
Covered by hearing and appeals rights
Eligible for leadership
Protected from retaliation
Elizabeth A. Snelson
Legal Counsel for the
Medical Staff PLLC
24
z
Conflicts of Interest
Screen candidates and reviewers
Identify employment conflicts
Require disclosure to appointers
Require disclosure to voters
Elizabeth A. Snelson
Legal Counsel for the
Medical Staff PLLC
25
z
Code of Conduct
Address inappropriate behavior
Include sexual harassment of members
Coordinate with hospital compliance code
Align with corrective action process
Elizabeth A. Snelson
Legal Counsel for the
Medical Staff PLLC
26
z
In case there are still conflicts...
This Photo by Unknown Author is licensed under CC BY-SA-NC
27
z
Conflict Resolution Process
Elizabeth A. Snelson
Legal Counsel for the
Medical Staff PLLC
“The organized medical staff has a process which
is implemented to manage conflict between the
medical staff and the medical executive
committee on issues including, but not limited to,
proposals to adopt a rule, regulation, or policy or
an amendment thereto. …”
Joint Commission Standard MS 01.01.01 Element of
Performance 10
28
z
Elizabeth A. Snelson
Legal Counsel for the
Medical Staff PLLC
“The conflict management process includes the
following:
- Meeting with the involved parties as early as possible
to identify the conflict
- Gathering information regarding the conflict
- Working with the parties to manage and, when
possible, resolve the conflict
- Protecting the safety and quality of care.”
- Joint Commission Standard LD.02.04.01, Element of Performance 4
AND ALSO THIS
CONFLICT RESOLUTION
PROCESS
29
z
Elizabeth A. Snelson
Legal Counsel for the
Medical Staff PLLC
“Dispute Management
Disputes occurring within the medical staff
organization between, among or within its
departments, committees, leadership and
members, and disputes between the medical
staff and the board are managed according to
this section, except
*any issue relating to peer review actions or
recommendations, which are handled
exclusively according to Article VI.
*amendments to the medical staff bylaws, rules
and regulations or policies proposed to resolve
the dispute must be acted upon by the medical
staff and board as required by these bylaws. …Massachusetts Medical Society Model Medical Staff Bylaws
30
z
Elizabeth A. Snelson
Legal Counsel for the
Medical Staff PLLC
1.Disputes Within the Medical Staff
Because the medical staff must be self-governing,
the board and its administration have no roles in
managing disputes between medical staff
committees, departments and members. No
medical staff dispute can be referred to the
hospital administration or board for action.
a. Disputes between the Medical Staff and
Medical Executive Committee
The medical staff, at the request of any member,
can raise, discuss and overturn or otherwise
change actions taken by the medical executive
committee at any medical staff meeting at which a
quorum is present.
b. Disputes between Departments,
Committees and Members
Disputes between medical staff departments,
committees and members can be referred to the
medical executive committee, or can be managed
by the medical executive committee at its initiative.…
Massachusetts Medical Society Model Medical Staff
Bylaws
31
z
Elizabeth A. Snelson
Legal Counsel for the
Medical Staff PLLC
2. Disputes between the Medical Staff
and Board
Anytime the board takes action to reject or
substantially revise a medical executive
committee or medical staff recommendation,
request or action, that action will be tabled
pending referral of the matter to the Joint
Conference Committee established in these
bylaws. The Joint Conference Committee shall
manage and resolve the differences, after
sufficient opportunity for the committee to receive
and review any documentation or other
appropriate information, by meeting and working
with any involved parties.
3. Dispute Resolution by Mediation
If the dispute resolution processes in this section
do not resolve the dispute, the parties shall
resolve the dispute using a mutually agreed upon
mediator.”Massachusetts Medical Society Model Medical Staff Bylaws
32
z
Fix the Medical Staff Documents
Use Bylaws to Address Known Issues
Include Conflict Management Processes
Elizabeth A. Snelson
Legal Counsel for the
Medical Staff PLLC
33
Peer Review
Presented by
Annie C. Lee, Associate, Arent Fox
arentfox.com
1. Credentialing 2.OPPE/FPPE3. Issues/Problems
4. Investigation5. Corrective
Action 6. Fair Hearing
Life of Peer Review
arentfox.com
35
1. Credentialing
arentfox.com
36
• Practitioner submits application.
• Medical staff office confirms application is complete and primary source verifies.
• The Department, Section, or Credentials Chair reviews complete application and interviews the applicant.
• The Credentials Committee reviews application, makes recommendation to the Medical Staff’s Executive Committee (MEC).
• The MEC reviews application and Credentials Committee recommendation, makes a recommendation to the governing body.
• If the MEC’s recommendation is negative or restrictive, the applicant gets a fair hearing.
Typical process (may
differ depending
on hospital):
arentfox.com
37
Credentialing: What it is, What it is not
• The process of obtaining, verifying, and assessing the qualifications of a health care practitioner to provide patient care services in or for a health care organization.
What it is (according to The Joint Commission
definition):
What it is not: a formality
arentfox.com
38
Accreditation Requirements: The Joint Commission
arentfox.com
39
Accreditation Requirements: The Joint Commission
arentfox.com
40
Red Flags:
Any information that puts the Medical Staff on notice that the applicant may not meet hospital’s standards or may endanger any person
Examples:
• Incomplete application
• Past disciplinary actions
• Pending investigations
• Pending recommendation of disciplinary action
arentfox.com
41
2. OPPE / FPPE
arentfox.com
42
Ongoing Professional Practice Evaluation (OPPE)
TJC Standard
MS. 08.01.03
Ongoing / Maintaining
privileges
Helps identify trends early
Can lead to “for cause”
FPPE
arentfox.com
43
Focused Professional Practice Evaluation (FPPE)
TJC Standard
MS. 08.01.01
Required for all initially requested privileges
Concerns identified / “for cause FPPE”
Non-reportable
actions
arentfox.com
44
3. Problems / issues
identified
arentfox.com
45
Common Peer Review Issues
Disruptive behavior
Clinical competency Physical/
mental impairment
Substance abuse
Willingness to follow rules/policies
Significant poor outcome
Illegal activity
arentfox.com
46
“for cause” FPPE
• Different from initial privileges FPPE
• Meet NPDB’s definition of investigation?
arentfox.com
47
4. investigation
arentfox.com
48
Whatis it?
• Process provided in the Medical Staff Bylaws beforetaking corrective action
arentfox.com
49
When to investigate?
• Acts, demeanor, conduct or professional performance reasonably likely to be:
• Detrimental to patient safety/quality of patient care
• Unethical • Unprofessional,
inappropriate, disruptive harassing
• Contrary to Bylaws/Rules/Policies
• Below applicable standards
arentfox.com
50
Don’t get hung up on the numbers . . .
Investigations may be initiated in response to the circumstances in a single case or to investigate a pattern or trend.
arentfox.com
51
Why investigate?
• To discover facts to establish truth!
arentfox.com
52
How to Investigate?
Follow Bylaws/ Policies
• And also, fairness and good judgment
Develop a Plan
• Do it at the outset; make it flexible
Gather Information
• Medical records
• Complaints
• Witness interviews
• Practitioner interviews/ submissions
Smart In Your World arentfox.com
53
Who investigates?
• Check Bylaws for details• Officers, quality/peer review
committee, MEC, CMO, ad hoc committee
• Ensure they are committed participants who understand the investigation’s goals
• Avoid conflicts of interest (real or perceived)
arentfox.com
54
When to Stop
Investigations Need Conclusions
Written report to the
MEC
May lead to an MEC recommendation/action
- Closing without action (but do not purge)
- Educational opportunity/ non-restrictive discipline
- Restrictive action
Restrictive actions may
have consequences
(hearings, reports)
Smart In Your World arentfox.com
55
5. CORRECTIVE ACTION
arentfox.com
56
Summary Restriction/Suspension (CA)
May immediately suspend/restrict clinical privileges where failure to take that action may result in an
imminent danger to the health of any individual
Bylaws typically identify who has authority; time-limits; rights to meet with MEC
May be implemented
before/
during/after investigation
May continue for indefinite period of
time, but needs some end point
(lifting, termination)
Smart In Your World arentfox.com
57
Terminate Medical Staff membership
and clinical privileges at hospital
Recommended Actions
arentfox.com
Letter of reprimandEducation
requirement
Mandatory proctoring
Mandatory pre-approval of cases
Time-limited restriction
58
6. Fair hearing
arentfox.com
59
What is a Peer Review Hearing?
• An adversarial, evidentiary process by which a practitioner can challenge an adverse action or recommendation that affects his or her medical staff membership, clinical privileges, or both.
• The hearing’s outcome is made by unbiased fact finders (hearing committees or arbitrators).
• Peer review hearing is an internal, administrative remedy governed by “fair procedure.”
arentfox.com
60
Steps Leading to the Peer Review Hearing
MEC takes (or
recommends) action
against MS member
MEC sends letter to MS member re
action
MEC sends
Notice of Charges
to MS member
Lots of other things
happen
Hearing
MS member requests hearing to challenge the
action
Smart In Your World arentfox.com
61
Why do we have to provide peer review hearings?• State Law
• Some states provide a common law or statutory right to a hearing• Ex: California case law
− Courts found that physicians have a right to practice their profession.
− If a hospital adversely impacts that right, then the physician has the right to challenge the action in a hearing.
− “Fair procedure,” not “due process.”
• California Business and Professions (“B&P”) Code Section 809 et seq.− Codified the right to a hearing and its process.
• Health Care Quality and Improvement Act of 1986 (HCQIA) (42 U.S.C. sec. 11112)
− Doesn’t require hearings, but incentivizes them
− Grants sweeping immunities if provide a hearing that meets certain standards.
• The Joint Commission (MS.10.01.01.)− “There are mechanisms including a fair hearing and appeal for addressing adverse
decisions …”
Smart In Your World arentfox.com
62
Questions?
ContactAnnie C. Lee
Associate
213.443.7680
arentfox.com
63
64
MEDICAL STAFF CHALLENGES: OVERCOMING CONFLICTS BETWEEN HOSPITALS AND MEDICAL STAFFS
Presented by: Jennifer A. Hansen. Esq. May 22, 2019
© HLB 2019 66
CASE STUDIES
• Economy v. Sutter East Bay Hospitals, 31 Cal.App.5th
1147 (2019).
• Henry v. Adventist Health Castle Medical Center, 2019 WL
346701 (D. Haw. Jan. 28, 2019).
• Powell v. Bear Valley Community Hospital, 22 Cal.App.5th
263 (2018).
© HLB 2019 67
THE GOVERNING BODY
• A hospital “is properly concerned with the maintenance of the goals and aims of its professional staff, and with avoiding disruption of hospital operations.”
Miller v. National Medical Hosp. (1981) 124 Cal.App.3d 81, 91-92
• A hospital’s governing body must be permitted to align its authority with its responsibility and to render the final decision in the hospital administrative context.
Hongsathavij v. Queen of Angels Med. Ctr.(1998) 62 Cal.App.4th 1123, 1143
© HLB 2019 68
ECONOMY V. SUTTERThe Facts
• Dr. Economy – anesthesiologist practiced at Summit
Hospital for 20 years
• Closed Department – exclusive contract between East
Bay Anesthesiology Medical Group and hospital
• State health inspector determined “Immediate Jeopardy”
in part because of misuse of medication and
recordkeeping errors by Dr. Economy
• Hospital asked East Bay to remove Dr. Economy from
anesthesia department schedule temporarily, then
indefinitely
© HLB 2019 69
ECONOMY V. SUTTERThe Facts
• The medical group asked Dr. Economy to resign
• Dr. Economy refused to resign
• The medical group terminated Dr. Ecomomy making him
ineligible to practice anesthesiology at the hospital
although he continued to hold medical staff membership
and clinical privileges
• The hospital did not provide notice or a hearing
© HLB 2019 70
ECONOMY V. SUTTERThe Lawsuit
• Dr. Economy sued the hospital alleging the hospital
deprived him of statutory and common law hearing rights
• Trial court awarded Dr. Economy approximately $3.9
million
• On appeal, hospital argued the medical group was not a
“peer review body”
• The Court of Appeal held the hospital’s request to remove
Dr. Economy was tantamount to a decision to suspend
and revoke his privileges depriving Dr. Economy of an
opportunity for a hearing
© HLB 2019 71
ECONOMY V. SUTTERTakeaways
• Facts of the specific case matter!
• Focus in Economy was removal for “medical disciplinary
cause or reason”
• Consider contract clauses authorizing removal for non-
medical disciplinary cause or reason
• Administrative decisions such as restructuring departments
• Non-clinical concerns
• Review terms of contracts and bylaws for consistency
© HLB 2019 72
HENRY V. ADVENTIST The Facts
• Dr. Henry is a board-certified general and bariatric
surgeon
• Dr. Henry complained of discrimination
• After the complaint, peer review was initiated of 7
surgeries
• Plaintiff’s clinical privileges were suspended and his On-
Call Agreement was terminated
• MEC conducted a review and issued recommendations
• Fair hearing panel upheld the MEC recommendations
© HLB 2019 73
HENRY V. ADVENTIST The Lawsuit
• Dr. Henry filed complaint in federal court pro se alleging
racial discrimination and retaliation
• The hospital filed a Motion for Summary Judgment
• The District Court noted Title VII protects employees, but
does not protect independent contractors
• The Court applied the Ninth Circuit Darden test and other
case law and found as a matter of law Dr. Henry was an
independent contractor rather than an employee for Title
VII purposes
• The Court held the peer review process did not create an
employment relationship
© HLB 2019 74
HENRY V. ADVENTIST Factors Influencing Court’s Decision
• Two express agreements with clear language stating that
plaintiff would be considered an independent contractor,
not an employee
• Earnings varied depending upon how many emergency
interventions occurred, how many days he was available
to be on-call, and the general surgery call schedule
• Hospital did not have complete control over when Dr.
Henry would be on call
• No reasonable fact finder could find that the peer review
process went beyond ensuring Dr. Henry’s work met the
standard of care
© HLB 2019 75
HENRY V. ADVENTIST Takeaways
• Incorporate express independent contractor language in
contracts consistently
• Carefully consider compensation methods
• Consider providing some flexibility such that hospital does
not have complete control over when physician is on call
(hospital will make “best efforts” to accommodate
availability)
• Peer review recommendations should be based on health
and safety concerns (not based on financial impact to
department)
© HLB 2019 76
POWELL V. BEAR VALLEYThe Facts
• Dr. Powell practiced medicine in both Texas and California
as a general surgeon
• In 2000, the MEC of Brownwood Regional Medical Center
in Texas found Dr. Powell failed to advise young boy’s
parents that he severed the boy’s vas deferens during
hernia procedure or of the ensuing implications (while
falsely representing to the medical staff that he fully
disclosed this)
• Brownwood terminated Dr. Powell’s membership and
clinical privileges
© HLB 2019 77
POWELL V. BEAR VALLEYThe Facts
• Dr. Powell applies at Bear Valley in October 2011 and is
appointed as provisional member for one year
• Dr. Powell told several MEC members that Brownwood
terminated him because management disagreed with
advanced or costly procedures and Texas Medical Board
allegations were dismissed with no disciplinary action
• Peer review of 12 charts, 8 considered problematic
• MEC recommended advancing Dr. Powell based on two
charts but Board expressed concerns and MEC retracted
recommendation to review all peer reviewed charts
© HLB 2019 78
POWELL V. BEAR VALLEYThe Facts
• MEC recommended advancement again
• Board still had concerns and requested the 2001 letter
from the Texas Medical Board which Dr. Powell failed to
produce
• Application was deemed incomplete and provisional
privileges expired
• Dr. Powell produced a letter from Texas Medical Board,
but still not the requested 2001 letter
• MEC recommended advancement
• Board disagreed and reached a tentative decision to deny
request for active privileges
© HLB 2019 79
POWELL V. BEAR VALLEYThe Administrative Proceedings & Litigation
• JRC found the Board’s tentative decision to deny active
privileges was reasonable and warranted
• Dr. Powell challenged decision with Writ of Mandate
• Trial court denied Writ and Court of Appeal affirmed
• Court of Appeal held the Board acted within its authority to
protect patients properly exercising independent judgment
while according due weight to the MEC’s recommendation
• Court of Appeal held the Board did not act irrationally in
considering circumstances of young patient at Texas
hospital at which physician’s privileges had been
terminated
© HLB 2019 80
POWELL V. BEAR VALLEYTakeaways
• The Board’s independent judgment is important!
• Include bylaws that allow the Board to accept, reject or
modify the MEC’s and/or JRC’s recommendation
• Lapse in privileges based on an incomplete application
does not trigger hearing rights in California
• Physician dishonesty on application may justify
termination of membership or privileges
• Include attestation statement on the application
acknowledging that dishonesty on application can serve
as grounds for denial of appointment or termination and
have bylaws that are consistent
© HLB 2019 81
QUESTIONS?
PRESENTER
Jennifer A. Hansen
Hooper, Lundy & Bookman, P.C.
Chair, Medical Staff Practice Group
619.744.7310
82
BOSTON LOS ANGELES SAN FRANCISCO SAN DIEGO WASHINGTON D.C.83