A Publication of the American Health Lawyers Association Medical Staff, Credentialing, and Peer Review Practice Group

Volume 12 • Issue 1 • January 2013

MedStaff News The Intersection of Credentialing and Peer Review: How Much Information Is Enough? Ramona H. Thomas, Esquire Broad & Cassel Miami, FL

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ost jurisdictions impose a legal duty on healthcare facilities to use due care in selecting the physicians appointed to the medical staff.1 A failure to exercise such due care in the credentialing process can result in the facility’s liability for patient injuries arising from the exercise of privileges by unqualified, unskilled, or incompetent physicians.2 The Joint Commission’s standards outline criteria that must be considered as a part of the credentialing process, including, among other factors, voluntary and involuntary termination of medical staff membership, and voluntary or involuntary limitation, reduction, or loss of clinical privileges.3 To evaluate these factors, a facility must make inquiries regarding a physician’s affiliations with other facilities. Occasionally, information a facility receives in response to an affiliation verification request may include information about peer review proceedings or adverse actions. A National Practitioner Data Bank (NPDB) query will reveal whether another facility has reported an adverse action taken against a physician applicant. In either situation, the credentialing facility has two important questions to answer: (1) what information should we request and review about the other facility’s actions regarding this physician; and (2) should the other facility’s action have any impact on our credentialing decision?

Table of Contents The Intersection of Credentialing and Peer Review: How Much Information Is Enough? Ramona Thomas, Esq....................................1 A Tool for Credentialing and Patient Safety Paul Verardi, Esq...........................................5 The Physician Employee —Who Has Jurisdiction? Best Practices for Coordination Between the Medical Staff and Human Resources Catherine Ballard, Esq. Jennifer Nelson Carney, Esq...........................7 Aligning Medical Staff and Quality Oversight Functions to Ensure Effective Use of Internal Data in Privileging Teresa Sappington, MBA, CMPM, CPHQ, CAPPM, CPMSM.................9

This article identifies judicial decisions addressing both questions and discusses the facility’s options for proceeding when it learns that a physician applicant has been the subject of peer review proceedings or an adverse action at another facility.

What Should Be Requested and Reviewed In Johnson v. Misericordia Comm. Hosp., the Wisconsin Supreme Court found hospitals have an obligation to investigate and confirm the credentials of practitioners appointed to their respective medical staffs. The court held that a hospital had not exercised ordinary care when it failed to “make a reasonable effort to determine whether the physician was qualified to perform” the privileges he requested.4 In that case, a patient sued a hospital after an unsuccessful surgical procedure, alleging the hospital negligently selected the physician who performed the procedure.5 The court agreed, holding that the hospital had a duty to exercise due care when selecting its medical staff, and had failed to properly do so.6

MedStaff News © 2013 is published by the American Health Lawyers Association. All rights reserved. No part of this publication may be reproduced in any form except by prior written permission from the publisher. Printed in the United States of America.“This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.” —from a declaration of the American Bar Association

MedStaff News panied by releases and authorizations, because the practitioner who signed the release or authorization may lack the authority to waive the privileged and protected status of this information. In jurisdictions where facilities’ peer review information is not statutorily protected, the historic reluctance to turn over peer review information has been somewhat tempered by the U.S. District Court for the Eastern District of Louisiana’s 2005 decision in Kadlec Med. Ctr. v. Lakeview Anesthesia Assocs.9

The physician had made several misstatements and omissions on his application for medical staff membership and clinical privileges, and the hospital did not follow up on these issues or verify the information that he did provide.7 Specifically, the physician stated that his privileges at other facilities had never “been suspended, diminished, revoked, or not renewed.” This statement was false and, had the hospital attempted to verify the information, it would have discovered that his privileges had been revoked at another facility for quality-of-care issues. The court held that the hospital’s failure to investigate the physician’s qualifications for the staff privileges requested gave rise to a foreseeable risk of unreasonable harm.8 The opinion in Johnson never expressly stated that the hospital was required to request and review documents and materials authorized by the physician to be released by other facilities pursuant to the application for appointment and consent form. However, it is a logical inference that such a request and review would have satisfied the “ordinary care” required of the hospital.

In Kadlec, the district court found that hospitals have an affirmative duty to disclose information about their medical staff members. In that case, a patient suffered a major complication during surgery at Kadlec Medical Center (Kadlec) due, in part, to the anesthesiologist’s impairment. During its credentialing of the anesthesiologist, Kadlec had requested information from a facility where the anesthesiologist had privileges, Lakeview Medical Center (Lakeview), and his past practice associates. Lakeview simply responded that the physician had been a member of the medical staff, but that “due to the large volume of inquires,” no further information would be provided.10 The past practice associates gave more information, highly recommending him for future placements, despite the fact that he had been terminated for cause due to drug diversion and impairment.11 The district court found that even absent a contractual or fiduciary relationship, Lakeview had a special relationship with Kadlec such that Lakeview had an affirmative duty to disclose negative information it had in its possession about the anesthesiologist, and found that Lakeview had breached this duty by not disclosing that the physician had been monitored for drug diversion and had been involved in a monitoring plan.12 The court also found that the past practice associates had actively misrepresented the physician’s credentials.13 The case ultimately resulted in a jury award of more than $8 million, allocating 25% of the fault to the practice associates and 25% to Lakeview.14

If the other facility refuses to provide information, it would be reasonable for the credentialing facility to request information and materials directly from the physician. One benefit of this approach is that it may be practically easier to obtain these materials from the physician than from the facility. Facilities have always carefully guarded their peer review information, and even in response to authorizations to release, facilities have historically been reluctant to release negative peer review information. This reluctance is grounded both in a desire to ensure that any protected and privileged status of peer review information is maintained and preserved, and in a desire to avoid the possibility of litigation, e.g., a claim of defamation or tortious interference by a physician who disagrees with the facility’s peer review findings. In fact, in some states the peer review information created by the facility is statutorily protected from disclosure. This protection is a privilege granted to the facilities and their committees (not the practitioners under review) to encourage open, honest, and unhesitating peer review among practitioners. In these states, facilities may decline to provide peer review information in response to requests, even when those requests are accom-

On appeal, the Fifth Circuit upheld the verdict against the practice associates, but reversed the judgment against Lakeview. In making this decision, the court “drew a bright-line distinction between the doctors’ actions, which involved affirmative, misleading statements about [the anesthesiologist’s] suitability, and Lakeview Hospital’s decision not to disclose any additional information.” The appellate court’s determination was based on the fact that Lakeview did not have an affirmative legal duty under Louisiana state law to disclose information about the anesthesiologist. However, the trial court’s imposition of such a burden, and the appellate court’s recognition that there are “compelling policy arguments” in favor of imposing a duty to disclose, point to the likelihood that this issue may be revisited in the future. Many states also currently impose reporting obligations, if not disclosure obligations, and many authors have expressed the opinion that the trend toward expanding disclosure obligations will continue.15 While currently there are not any federal regulatory requirements (aside from the possible consequences of failing to submit a required report to the NPDB) that provide consequences for failing to disclose complete information to other facilities, in light of Kadlec, facilities do face significant risk (including financial liability and possible sanctions or fines)

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To discharge its responsibility of ordinary care, a hospital should, at a minimum, request directly from other facilities all ultimate findings and conclusions regarding corrective or disciplinary actions taken against a practitioner. A credentialing facility should request documents and materials sufficient to establish whether the decisions made at the other facilities were reasonable. Such documents and materials include, but are not limited to, incident reports of disruptive behavior or incompetency, statements by witnesses, medical records, policies and procedures allegedly violated, and other documents supporting the decisions by the other facilities. This information would permit the credentialing facility to conduct its own investigation and could conceivably provide the factual basis necessary to independently support any potential adverse recommendation or action.

for failing to give comprehensive, truthful accounts of their current and former medical staff members to credentialing entities. Other courts have also reviewed facilities’ inquiries into other facilities’ peer review or disciplinary proceedings involving an applicant physician. For example, the court in Webman v. Little Co. of Mary Hosp.16 held that a credentialing hospital acted reasonably in denying a physician’s application for reappointment where his privileges had been summarily suspended at another facility because of issues related to patient care and the physician actively interfered in the credentialing hospital’s attempt to investigate the other hospital’s adverse action.17 In Webman, the court held that the credentialing hospital’s bylaws clearly provided that the “reappointment process entails a review of patient records at [the credentialing hospital] and elsewhere, and that an applicant’s cooperation with hospital personnel and compliance with [hospital] bylaws are to be considered.”18

If the other facility refuses to provide the requested information, or if there is any reasonable basis to conclude that the information provided is not complete, the credentialing facility should request information directly from the physician. While the authorization or release that a physician signs as a part of the credentialing process gives the physician’s permission to the other facilities to release information to the credentialing facility (consistent with the releases described in Johnson and Kadlec), asking the physician for documentation would benefit both the physician and the credentialing facility. It would afford the physician the opportunity to be directly involved in the credentialing facility’s initial evaluation of the other facility’s action, and it would impose an obligation that, if required by the credentialing facility’s medical staff bylaws and not discharged, could conceivably be its own basis for corrective action under Webman. Further, requesting that the physician provides his own copies of records and materials related to the peer review proceeding avoids the problem of facilities refusing to provide information in those jurisdictions where facilities’ peer review information is statutorily protected from disclosure.

When the credentialing hospital requested documents from the other facility where the physician’s privileges had been summarily suspended because of issues related to patient care, the other facility refused to grant access to the requested documents.19 The credentialing hospital then requested the documents from the physician himself, who refused to provide them “because the application and bylaws did not explicitly compel him to ‘produce documents.’”20 The credentialing hospital denied the physician’s reappointment because it was unable to investigate the matter and because the physician refused to produce the documents (in violation of the requirement in the bylaws that he cooperate with hospital personnel). The court held that this decision was entirely reasonable.21 Neither of these cases provides express guidance as to exactly what information should be requested and reviewed or how such a request should be handled. However, Johnson does reference the fact that in his application, the physician authorized the credentialing hospital to contact his malpractice carriers, past and present, and all the hospitals with which he had previously been associated, “for the purpose of obtaining any information bearing on [his] professional competence, as well as [his] moral, and ethical qualifications for staff membership.”22 The application also contained a consent form for the inspection of his patients’ medical records at the hospitals where he was presently affiliated, or had been in the past, and further provided that the physician released “from any liability any and all individuals and organizations who provide information to the hospital, or its medical staff, in good faith and without malice concerning my professional competence, ethics, character and other qualifications for staff appointment and clinical privileges.”23 This authorization and release permitted other facilities to disclose otherwiseprotected information and afforded the hospital the opportunity to specifically inquire about the physician’s past experiences at other facilities, which it failed to do. It is interesting to note that several members of the jury in Kadlec indicated that, while they understood that hospitals may be reluctant to disclose negative information about practitioners, where the physician signed a form releasing the disclosing facility from liability, this release should alleviate the hospital’s concerns and persuade the hospital to provide the requested information.24

Impact of Other Facilities’ Actions Generally, a facility may use the information provided about other facilities’ peer review actions in considering what actions to take with regard to a practitioner’s privileges at its own facility. For example, Rao v. Auburn Gen. Hosp. involved a physician whose application for privileges was denied because of information received from five other facilities at which she previously had privileges.25 Her privileges had been terminated at one, had been substantially restricted at two others, and she had been released from her contract at two others. The court stated that “in view of the showing made, we cannot say that the Auburn General Hospital abused its discretion in denying staff privileges to Dr. Rao.”26 The court ultimately deferred to the credentialing hospital’s evaluation of the physician and noted with approval the fact that the credentialing hospital contacted other facilities and received and reviewed reports related to the physician from those facilities.27 The court did not identify what specific documents or evidence Auburn used in its review of the other hospitals’ actions, but the court did quote from some of the reports provided by these facilities.

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MedStaff News privileges, hospitals should exercise care and caution. If other facilities refuse to provide information, information should be requested from the physician and other possible sources. All information received should be thoroughly reviewed and verified. The information received should not automatically be accepted as true, and any information that may become the basis for adverse action should be investigated and confirmed to ensure that the credentialing facility fulfills its duty to exercise due care and to ensure that the physician is afforded the opportunity to contribute meaningfully to the evaluation of his qualifications.

While information from other facilities is properly considered by the credentialing facility, the simple fact that another facility has taken an adverse action may not be independently sufficient to warrant adverse action at the credentialing facility. The key case on the extent to which one facility can rely solely on peer review information from another facility when making its own credentialing or peer review determinations is Smith v. Selma Community Hosp.,28 in which the court upheld a hospital’s judicial review committee’s finding that, in the circumstances of that case, peer review actions taken at the other hospitals were not independently sufficient to warrant termination of a physician’s privileges and staff membership.29 However, the court emphasized “that this decision does not stand for the proposition that an acute care hospital may never rely solely on the results of peer review proceedings at another hospital when reaching a decision to terminate a physician’s privileges and staff membership.”30

1 See Jack W. Shaw, Jr., Annotation, Hospital’s Liability for Negligence in Selection or Appointment of Staff Physician or Surgeon, 51 A.L.R.3d 981 (1973). 2 Johnson v. Misericordia Comm. Hosp., 301 N.W.2d 156 (Wis. 1981). 3 MS.06.01.05, EP 9. 4 301 N.W.2d at 172. 5 Id. 6 Id. at 174. 7 Id. at 160. 8 Id. at 164. 9 2006 WL 1328872 (E.D. La., 2006), rev’d 527 F.3d 412 (5th Cir. 2008), cert. denied, 555 U.S. 1046 (Dec. 1, 2008). 10 Kadlec, 527 F.3d at 416. 11 Id. 12 Id. 13 Id. 14 T. Leatherbury, et al., Kadlec v. Lakeview Anesthesia Associates: Fifth Circuit Finds No Affirmative Duty to Disclose Between Health Care Providers under Louisiana Law, prepared for the 2009 American Health Lawyers Association Annual Meeting, available at: www.healthlawyers.org/Events/Programs/Materials/Documents/AM09/strama_kadlec.pdf. 15 S. Sanford, Candor after Kadlec: Why, Despite the Fifth Circuit’s Decision, Hospitals Should Anticipate an Expanded Obligation to Disclose Risky Physician Behavior, 1 Drexel Law Rev., 383 (2009). 16 39 Cal. App. 4th 592 (1996). 17 Id. at 601. 18 Id. at 602. 19 Id. at 600-01. 20 Id. at 602. 21 Id. 22 301 N.W.2d at 159. 23 Id. 24 Leatherbury, supra note 14, at 5. 25 573 P.2d 834 (Wash. Ct. App. 1978). 26 Id. at 837. 27 Id. 28 164 Cal. App. 4th 1478, 1504 ( 2008). 29 Id. 30 Id. at 1482. 31 Id. at 1491. 32 Id. 33 Id. at 1495. 34 Id. 35 Id. at 1519. 36 Id. at 1506.

Dr. Smith was on staff at Selma Community Hospital (Selma), Hanford Community Medical Center (Hanford), and Central Valley General Hospital (Central).31 He was suspended from Hanford and Central for a variety of reasons and filed suit against these two facilities.32 While judicial review was pending, Selma’s Medical Executive Committee (MEC) recommended Smith’s privileges be terminated, based solely on the actions of the other two hospitals.33 Selma’s judicial review committee (JRC), sitting as a trier of fact at the fair hearing, decided that Selma must conduct its own investigation of Smith. The hospital did ask for, receive, and review documents regarding the cases that led to the other facilities’ adverse actions. After its investigation, the JRC concluded that: (1) the MEC did not prove that its recommendation to terminate Smith’s medical staff membership and clinical privileges was reasonable; (2) the information from the other hospitals “may be used as a part of a reason to monitor Dr. Smith by accepted peer review mechanisms”; but (3) such information alone, in light of testimony provided that Smith’s history at Selma was within clinical standards, was not enough to support the recommended suspension.34 The governing body reversed this decision on appeal, concluding that the findings of the other hospitals had to be accepted as true, regardless of the JRC’s review of the matter. Ultimately, the court overturned the decision of the governing body, held that the JRC’s decision was supported by substantial evidence, and held that the MEC’s recommendation to terminate Smith’s medical staff membership and clinical privileges was not reasonable or warranted, as the MEC’s recommendation was based on the findings of the other hospitals “accepted as true” and was contrary to findings of the JRC, which independently reviewed these matters.35 The court rejected the governing body’s conclusions that the factual findings of the other hospitals could not be challenged in the fair hearing at Selma.36 When evaluating a physician applicant’s competence and qualifications for appointment to the medical staff or grant of clinical

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and healthcare entities for years. NAMSS simply applied its credentialing experience and expertise to improve the quality and effectiveness of this product.

New Product Review This new product review is brought to AHLA through its collaboration with the National Association Medical Staff Services.

NAMSS PASSTM is currently ready to accept data from hospitals and other healthcare entities, but the organization estimates that it will take approximately one to two years for a comprehensive database to be achieved. To encourage early adopters and contributors, NAMSS is providing free access to NAMSS PASSTM data for one year to all healthcare entities that contribute their data in 2013. After the first year, nominal fees will apply to access the NAMSS PASSTM database.

A Tool for Credentialing and Patient Safety

Once the initial data is provided to NAMSS PASSTM, contributing entities will be required to provide periodic electronic updates of practitioner affiliation information so that the information in the database remains current. This can be accomplished through a simple Excel spreadsheet. A date stamp documenting and verifying the exact date when the data was last updated by the contributing healthcare entity will be provided on all queries.

Paul A. Verardi, Esquire Horty Springer & Mattern PC Board Member, National Association Medical Staff Services Pittsburgh, PA

Practical Benefits of the Product

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sk seasoned Medical Services Professionals (MSPs) to identify the most important and valuable components of an effective credentialing process and always near the top of the list is the review of a practitioner’s affiliation history. Those same MSPs will often add, however, that this review is one of the most time-consuming, difficult, and risk-prone components of the entire process.

A NAMSS PASSTM subscriber will be able to: • Instantaneously obtain a practitioner’s affiliation history for all of the healthcare entities where he or she has been credentialed, as reported by those healthcare entities; • Compare and verify the NAMSS PASSTM affiliation information with the information provided on the application form;

Those of us who provide counsel to MSPs, physicians, and healthcare entities in credentialing matters certainly agree on both fronts. We know that identifying and verifying a practitioner’s prior affiliations and obtaining meaningful references from those institutions are essential to mitigate potential legal risks associated with negligent credentialing claims and, more importantly, to protect patients.1

• Perform a quick “gap analysis” to determine if any credentialing “red flags” are present; and • Immediately print “good standing” letters on the letterheads of the contributing hospitals, if a letter for that practitioner is available. From the perspective of the querying entity, this means no more faxing or mailing requests by MSPs to individual affiliations, no more waiting for responses to be returned, and no need for second and third requests for verification. From the perspective of the responding entity, it means a safe and secure way to share affiliation history—something the facility is already doing—but now in a streamlined, easier, and inexpensive manner.

In response to this need, the National Association Medical Staff Services (NAMSS) has created NAMSS PASSTM, which stands for “Practitioner Affiliation Sharing Source.” NAMSS PASSTM is a secure, online tool that is intended to provide quick, easy, and inexpensive access to a comprehensive database of practitioners’ affiliation history with hospitals, surgery centers, health plans, group medical practices, and other entities for the entirety of the practitioners’ careers.

Definition of “Good Standing” As we all know well, one of the longstanding problems within the credentialing community has been the lack of a common definition of what constitutes good standing for the practitioners who are credentialed. Ask ten MSPs, physicians, and healthcare entities what it means and you are likely to get ten different variations on the theme. Credentialing entities all want and need goodstanding letters, but the industry has never developed a common understanding of what that means. One of the most helpful aspects of the NAMSS PASSTM tool is that it directly addresses the concept of good standing.

For this vision to achieve its fullest potential, it will need to be embraced by the credentialing community, with every healthcare entity contributing its information. Because many in that community will look to us for guidance, it is important that we understand the tool and support it.

Product Launch Information NAMSS PASSTM was unveiled in January 2013, after several months of beta testing. But, actually, the technology to support it and the basic concept have been available for years. In creating NAMSS PASSTM, NAMSS partnered with the Practitioner Hospital Data Bank (no affiliation to the National Practitioner Data Bank), which has provided an affiliation database for many hospitals

NAMSS PASSTM has developed two options for a healthcare entity to choose from in terms of the good-standing letter to be provided for its practitioners. Both of these options rely, in large 5

MedStaff News part, on the well-known federal Health Care Quality Improvement Act to provide a common definition of what is intended by the words good standing. Using a common definition, we will all finally now know what good standing means and, just as importantly, what it does not mean. If additional information about a practitioner’s qualifications is required beyond the common definition, credentialing entities can obtain it through the questions on application forms, follow-up letters to the healthcare facilities, confidential evaluation forms sent to references, and/or phone calls to references.

Practice Groups Staff Trinita Robinson Vice President of Practice Groups (202) 833-6943 [email protected] Magdalena Wencel Senior Manager of Practice Groups (202) 833-0769 [email protected]

We should emphasize that if a practitioner does not have a goodstanding letter available for a particular entity on the NAMSS PASSTM system, that does not automatically mean there is a problem with that practitioner. There may be several reasons why a good-standing letter is not available, which may have no relevance to a practitioner’s specific qualifications. The absence of a good-standing letter on the NAMSS PASSTM system simply means that the querying entity needs to contact the facility directly to ascertain why that is the case.

K. J. Forest Practice Groups Distance Learning Administrator (202) 833-0782 [email protected] Brian Davis Practice Groups Communications and Publications Administrator (202) 833-6951 [email protected]

AHLA Member Involvement in Building NAMSS PASS™ NAMSS PASSTM has the potential to become an industry best practice in promoting quality and safety and mitigating potential legal risks, but also—given the economic climate facing virtually all healthcare entities—doing so in the most efficient and effective manner possible. In recognition of that potential, AHLA members may want to encourage physician leadership and healthcare entity management clients to support their MSPs in this effort to build a tool that can have a real and substantial effect on the entire credentialing community.

Crystal Taylor Practice Groups Activities Coordinator (202) 833-0763 [email protected] Ramon Ramirez Practice Groups Distance Learning Coordinator (202) 833-0761 [email protected]

More information about NAMSS PASSTM is available on the NAMSS website.2 Be sure to review the brief NAMSS PASSTM Terms of Service so that you are well informed and prepared to advise your clients who ask for guidance. When you do so, you will note that there are links to the two good-standing letters discussed above to facilitate your review. You will also note that no revisions to Medical Staff Bylaws documents or to application forms are necessary in order to participate—the existing authorization and release provisions in place at healthcare entities can be utilized.

Tazeen Dhanani Practice Groups Web Assistant (202) 833-6940 [email protected] Dominique Sawyer Practice Groups Distance Learning Assistant (202) 833-0765 [email protected]

Graphic Design Staff

1 More than thirty states have recognized the tort of negligent credentialing. Montana was the most recent in Brookins v. Mote, 2012 WL 6134872 (Mont. Dec. 11, 2012). 2 Available at www.namss.org/.

Mary Boutsikaris Creative Director (202) 833-0764 [email protected] Ana Tobin Graphic Designer/Coordinator (202) 833-0781 [email protected]

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The Physician Employee— Who Has Jurisdiction? Best Practices for Coordination Between the Medical Staff and Human Resources

is structured through a separate corporation and a separate handbook applies). Physician employees are often surprised by the fact that the employee handbook applies to them (sometimes pleasantly surprised because it provides the physician with more rights, but sometimes unpleasantly surprised because it holds the physician to a higher standard than they have been subject to in the past). Not surprisingly, hospitals (as employers) are also often startled to realize that their physicians are employees and are subject to such employment protections and constraints.

Catherine M. Ballard, Esquire* Jennifer M. Nelson Carney, Esquire Bricker & Eckler LLP Columbus, OH

Healthcare lawyers may rest assured that the fact that all these employment laws apply does not mean that hospitals no longer need be concerned with the various healthcare laws that govern a healthcare entity/physician relationship. The following laws, among others, are still present and entirely applicable: the Physician Self-Referral Law (the Stark Law, which has an employmentspecific exception that must be met), the Anti-Kickback Statute (which has an employment-specific safe harbor that the hospital should consider meeting), the False Claims Act (which will now apply to billings on behalf of both the hospital and the physician), Internal Revenue Service laws regarding tax-exempt organizations and reasonable compensation (which can jeopardize the hospital’s tax-exempt status if the hospital is overcompensating physicians), and (potentially) antitrust regulations (depending upon the hospital’s market share and competitive activities).

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here is a growing trend for hospitals (and their affiliate organizations) to employ physicians,1 and it appears that this tendency will only increase with the implementation of accountable care organizations under the Medicare Shared Savings Program. The increased employment of physicians raises a number of new issues for hospitals, one of which is to consider which components of the hospital have jurisdiction over the physician employee. This article discusses the issues hospitals must consider in acknowledging a physician’s dual role as an employee and a medical staff member.2

In the midst of trying to balance all of these competing and equally controlling interests, regulations, and requirements, the hospital must still keep its eye on the ball. At the end of the day, the hospital’s mission is to provide quality care to patients through the employment of competent healthcare providers— those who provide quality care through clinical expertise, effective patient management, and appropriate professional behavior and communication skills. To achieve this goal, a hospital should ask itself this question: if the purpose of peer review on the medical staff side is to assure quality patient care, is it not equally important to have peer review on the employment side? (Especially when the hospital, as employer, is now facing both vicarious liability and possible negligent credentialing claims.) And if a main stay of peer review is confidentiality (in order to encourage open and candid discussions), what steps does a hospital need to take to assure that a sharing of information policy (or a sharing of information agreement, depending upon the parties involved) is in place and followed? Such a policy must deal with: (1) who keeps what type of information; (2) who shares what information with whom; and (3) who is best equipped to handle an issue regarding an employed physician when that issue arises.

Consider the files a hospital keeps for each physician employee. Many physicians find it surprising that both Medical Staff Services (MSS) and Human Resources (HR) need to maintain files on physician employees. The HR file will be the same as that maintained for any hospital employee and is subject to the same review as that of any hospital employee. The MSS file (or files) will be the same as that maintained for any member of the medical staff with clinical privileges (e.g., credentials, quality, corrective action, etc.) With all of these files and the corresponding paperwork, it is crucial to know what type of information is maintained in each, what type of information should be shared within the organization, what safeguards are in place to avoid sharing certain information that should not be shared, and who should handle what types of problems? (If your organization is a health system, the question of sharing—specifically, how far to share—becomes even more significant.) In answering these questions, we must be cognizant of the implications of the physician as an employee. Employment subjects the physician (and the organization) to a variety of laws that have not typically been associated with physicians. The physician as an employee inherently means that numerous employment laws apply, including (among others) Title VII of the Civil Rights Act of 1964, the Pregnancy Discrimination Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Uniformed Services Employment and Reemployment Rights Act, the Family and Medical Leave Act, the Genetic Information Nondiscrimination Act, and (potentially) the National Labor Relations Act—in addition to your state’s anti-discrimination laws and workers’ compensation laws. Employer-provided pension and benefit plans apply, and employee handbooks apply to physicians as well (unless your organization is able to alter this pursuant to contract or employment

The balance of this article is designed to help you navigate these issues. The first step is to determine what information is maintained by HR for all employees (both physician and non-physician). Once determined, assess whether the current structure makes sense. For example, if the hospital has historically maintained all disciplinary action in employment files, decide whether that same information will be kept in a physician’s employment file—or will be kept elsewhere (and be able to explain why the physician employee has a different standard). 7

MedStaff News better versed in conducting a sexual harassment investigation; and (4) the medical staff may not be as effective in balancing the competing interests. Upon completion of the investigation, HR can then provide its final report to the MSS who can then consider the issues from the perspective of the physician’s medical staff appointment and privileges.

The second step is to be sure the hospital has a clear understanding of what information is maintained in MSS files. Depending upon the state’s peer review privilege, a decision should be made as to what information is protected by the privilege versus what information is not protected. Steps should also be taken to ensure that no matter who pulls an employed physician’s MSS file, it will be clear what information can be shared with others (without losing peer review protection) versus what information cannot be shared with others.

Consider another example: a report was filed against employed Dr. B. The report states that Dr. B is non-communicative, loses his temper quickly, and is otherwise just obnoxious. The MSS may be the best starting point for this matter based upon these facts: (1) physicians often interact better with their peers; and (2) this matter may be able to be resolved informally through the Practitioner Effectiveness Committee. The underlying information in this matter will not be able to be shared with HR but, provided the problem is resolved, there is really no reason why it would need to be.

The third step is to assess what information is (or has historically been) shared between HR (or the Recruiting Office) and MSS and whether this sharing is appropriate to the hospital’s goals. Consider what information is currently protected, how it is protected (by the peer review privilege or other protections), and what the hospital needs to do to maintain that protection. At a minimum, consider the following types of information and who needs to see each: physician qualifications, peer references/reference letters, information gathered from phone calls, and criminal background checks, among others.

In another example, consider the case of employed Dr. C who has a clinical quality of care concern. The MSS is probably best suited to handle this issue because evaluating quality of care is one of the medical staff’s primary purposes, and thus, it is qualified to do so. Of course, depending upon the severity of the problem, a decision will need to be made as to what information may be shared with HR, with the recognition that sharing such information will probably allow the information to become discoverable.

Keep in mind that although this information may maintain its protection if distributed out of a central verification office to separate offices (e.g., HR and MSS), the information will generally not maintain protection if it is taken out of the MSS file and is given to HR. Much of the information in a physician’s peer review file is generally protected by state peer review privilege (if the state has such a privilege). If MSS shares peer review material with HR, that peer review material has now been used for a non-peer review purpose and, as a result, is no longer protected information. The information is now discoverable like most information in an employee personnel file (note: exceptions apply to certain information such as protected health information).

And last, but certainly not least, consider the case of employed Dr. D. A report was filed against Dr. D that states Dr. D is performing unnecessary surgeries and is improperly sharing patient health information. The facts and circumstances may indicate that this issue needs to go directly to the hospital’s compliance officer, or a decision may be made that the compliance officer and MSS need to conduct concurrent reviews. Hospitals should review each of the above situations and consider: (1) who handles each type of information; (2) how will the analysis/investigation/work flow; and (3) how does the state privilege impact the potential to share information.

In assessing the type of information that is to be shared, the hospital must be cognizant of certain information that may not be shared between MSS and HR, such as information from the National Practitioner Data Bank (NPDB). Federal regulations provide that NPDB information is confidential and may not be disclosed, and there are penalties associated with violations.

Once a plan has been developed, hospitals should create a hospital policy (applicable to all components of the hospital) rather than a medical staff policy (which only has authority over the medical staff) that sets forth the process and also clarifies the roles of each office and the interplay between offices. Keep in mind that once the policy is in place, the policy will only be effective if all players are appropriately educated as to their respective roles and responsibilities.

Once a decision has been made as to what information belongs where and how/if such information will be shared, the final, yet vital step is to decide whether HR or MSS should handle an issue when one arises. One component of this decision is how to triage issues as they arise, and the other component is to assign certain types of problems to each department. The hospital should establish a process that will allow a problem to be captured when the problem first occurs and then directed to the appropriate person/department. Answering the question as to who is best suited to handle the particular type of information is crucial, and if that can be sorted out before a problem arises, the hospital will better manage these issues.

This may sound like a lot of work, but it is an important component of the fundamental goal of every healthcare entity—creation of a system that effectively supports the provision of quality care to patients, not only in today’s world, but in the integrated healthcare world of the near future. *Catherine M. Ballard and Jennifer M. Nelson Carney are partners in the Health Care practice group at Bricker & Eckler LLP in Columbus, OH.

For example, consider the case of an employed physician, Dr. A. A report was filed that alleges sexual harassment by Dr. A toward members of the hospital’s staff. What office is best suited to handle this issue? HR is likely the best starting point based upon these facts: (1) the situation involves hospital employees; (2) federal law generally does not recognize a state’s peer review privilege in response to claims of discrimination; (3) HR may be

1 Although this article deals with physicians, the principles are the same for any other provider who is employed but who is also granted appointment and privileges, e.g., dentists, podiatrists, psychologists, advance practice nurses, physicians assistants. 2 An additional growing issue is the ability to establish a peer review process in the employment setting. That issue is outside the scope of this particular article.

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Aligning Medical Staff and Quality Oversight Functions to Ensure Effective Use of Internal Data in Privileging

and reporting of performance data. This data is then reviewed by the appropriate medical staff leaders in conjunction with credentialing documents to allow for informed recommendations to the GB. The value-based purchasing system requires the collection and reporting of specific clinical quality measures.

Clinical Quality Measures Collection and Reporting

Teresa P. Sappington, MBA, CMPM, CPHQ, CAPPM, CPMSM* Augusta, GA

Clinical quality measures, or CQMs, are tools used to measure and tract the quality of healthcare services provided by eligible professionals (EPs), eligible hospitals (EHs), and critical access hospitals (CAHs). These measures include data associated with a provider’s ability to deliver high-quality care or relate to long term goals for healthcare quality. On April 24, 2012, the Centers for Medicare & Medicaid Services (CMS) announced the publication of Notice of Proposed Rulemaking for the Inpatient Prospective Payment System. This publication included a number of proposed policies related to the Hospital Value-Based Purchasing (VBP) system. Starting this year, the hospital value-based incentives are available. VBP methodology includes total performance scores conversion into a value-based incentive payment adjustment percentage by ranking based on scores. In 2011, CMS released its final rule for the Fiscal Year 2014 Hospital VBP Program as part of the agency’s Outpatient Prospective Payment System. The hospital VBP program is for hospitals, clinicians, and other stakeholders who share in a commitment to quality hospital care by realigning financial incentives to quality patient care. Beginning in 2014, the reporting of CQMs will change for all EPs, EHs, and CAHs. In general, chart-abstracted and survey measures capture the entire patient population.

M

edical staff leaders use practitioner-specific performance data in the decision-making process when recommending continuation or curtailing of privileges. Aligning oversight functions between medical staff offices and quality departments triggers focused and ongoing practitionerspecific performance data collection and is essential to risk mitigation relating to patient care and safety. Medical staff offices credential applicants for initial appointment, reappointment, change in staff membership status, and request for additional privileges. These offices are generally the first point of contact for applicants and responsible for organizational notification of privileges approval by the Governing Board (GB). Additionally, medical staff offices ensure organizational notification of practitioner resignations or leaves of absence as this serves to trigger discontinuation of data collection. Focused professional practice evaluation is used to evaluate the privilege-specific competence of new medical staff members, existing practitioners exercising new privileges, and in situations where competency questions arise for practitioners who are not new to the medical staff. In all cases where a question concerning current competence exist after initial review and evaluation of performance data, an assigned period of performance monitoring is typically initiated to further assess current competence, practice behavior, and the ability of the practitioner to perform the requested privilege. Following approval of privileges, by the organization’s GB, the medical staff office should promptly notify the organization’s quality department of the practitioner’s approved privileges. At this point the quality department begins practitioner-specific data collection. Focused professional practice evaluation is also used when questions arise regarding a practitioner’s practice during the course of ongoing professional practice evaluation; on return of a practitioner for a leave of absence; and may be used to review the care of low-volume practitioners.

CMS selected the core set of CQMs based on their analysis of several factors: • Conditions that contribute to the morbidity and mortality of the most Medicare and Medicaid beneficiaries; • Conditions that represent national public health priorities; • Conditions that are common to health disparities; • Conditions that disproportionately drive healthcare costs and could improve with better quality measurement; • Measures that would enable CMS, states, and communities to measure quality of care in new dimensions, with a stronger focus on parsimonious measurement; and • Measures that include patient and/or caregiver engagement.

Professional practice evaluation is reviewed on an ongoing basis through a variety of methods with results of these reviews reported on the physician-specific basis with comparison to medical staff members holding similar privileges. Ongoing practitioner specific performance data is used in assessing clinical competency for reappointment. Review of ongoing performance data may indicate potential problems or existing trends and may be used to determine volume of patient care activity. To ensure timely availability of review data, notification of upcoming reappointments should be initiated from the medical staff office to the quality department with adequate time allowance for gathering

In addition, CMS selected all CQMs to align with the U.S. Department of Health & Human Services’ National Quality Strategy priorities for healthcare quality improvement. Of the following domains, EPs, EHs, and CAHs must select CQMs that cover at least three of the six domains: • Patient and Family Engagement; • Patient Safety; • Care Coordination; • Population and Public Health; 9

MedStaff News • Efficient Use of Healthcare Resources; and

of technology proves beneficial as organizations move towards paperless environments and as medical staff leaders move from static practice locations to geographically disperse practice locations. Medical staff offices and quality departments retain joint responsibility for initiation of practitioner-specific performance data collection and accessibility of data for medical staff leadership review. Alignment of oversight functions ensures effective use of internal data in privileging and moves the healthcare organization towards its alignment with national quality strategy priorities for healthcare quality improvement.

• Clinical Processes/Effectiveness.

Joint Accountability for Performance Data Collection and Timely Review Organizations benefit from use of software that allows for online and remote accessibility to practitioner-specific performance data by medical staff leaders. A common scenario in healthcare organizations includes recommendations moving forward pending required performance data gathering by the quality department and subsequent review by leaders. A scenario may involve leaders backdating recommendations following late review of performance data. Medical staff offices may perpetuate this delay in data gathering because of untimely notification to the quality department of upcoming reviews. Online and remote accessibility by leaders encourages timely review of performance data in conjunction with credentials information resulting in informed recommendations for continuation or curtailing of privileges. Responsibility remains with the medical staff office and quality department to notify medical staff leaders of needed reviews. Healthcare organizations continue to implement performance data extraction from electronic health records. Today, the use

*Teresa P. Sappington is a consultant with more than seventeen years of experience in the healthcare industry. Her expertise is medical staff affairs and healthcare regulatory compliance. With her corporate office located in Augusta, GA, Ms. Sappington consults internationally to various types of healthcare provider business structures, including healthcare systems, private practices, and specialty healthcare facilities. Additionally, Ms. Sappington provides expert witness and consultation services to legal entities, and is available for speaking engagements. Ms. Sappington can be reached via the “Contact Me” tab on her consulting firm’s website, teresapsappington.com.

Medical Staff, Credentialing, and Peer Review Practice Group Leadership Timothy B. Adelman Chair Adelman Sheff & Smith LLC Annapolis, MD (410) 224-3000 [email protected]

Robin L. Nagele Vice Chair – Publications Post & Schell PC Philadelphia, PA (215) 587-1114 [email protected]

Brian C. Betner Vice Chair – Educational Programs Hall Render Killian Heath & Lyman PC Indianapolis, IN (317) 977-1466 [email protected]

Kathy L. Poppitt Vice Chair – Membership Cox Smith Matthews Inc. Austin, TX (512) 703-6317 [email protected]

Michael R. Callahan Vice Chair – Strategic Activities Katten Muchin Rosenman LLP Chicago, IL (312) 902-5634 [email protected] Stephen R. Kleinman Vice Chair – Research and Website Ice Miller LLP Columbus, OH (614) 462-2287 [email protected] 10

Implementing "Systemness" into Health System Consolidation Medical Staff, Credentialing, and Peer Review Practice Group Mid-Year Luncheon Sponsored by MD Review

❖ C  onsiderations and lessons learned when merging medical staff governance and leadership perspectives;

Tuesday, February 12, 2013 12:25-1:35 pm Physicians and Physicians Organizations Law Institute

❖ M  aking system-wide service lines work; ❖ T he relationship between health system activities and traditional medical staff roles, qualifications and standards; and

JW Marriott Desert Ridge Resort & Spa, Phoenix, AZ Increased hospital and health system consolidation has emphasized the varied challenges of unifying medical staff cultures and the ever-growing web of system-wide service lines and hospital credentialing, privileging, and quality activities. Many of these activities are becoming more centralized as health systems search for greater standardization, efficiency, and cost reduction. This presentation will use hands-on experience from an in-house perspective to discuss the many challenges, opportunities, and lessons learned when integrating service lines and multiple medical staffs into a health system, including:

❖ C  onsidering state peer review laws when centralizing service line, credentialing, privileging, and peer review activities. Presenter: Amy L. Marquardt, Esquire Vice President and General Counsel Hospital Sisters Health System Clear Lake, IL

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