Medical Staff Challenges: Overcoming Conflicts Between...

Medical Staff Challenges: Overcoming

Conflicts Between Hospitals and Medical StaffsPeer Review, Governing Documents, and Board Governance

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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.

rnagele@postschell.com

? ?Board

Board Chair

Dept. Chiefs

Committee Chairs

MECMedical Staff

President CMO

Physicians

CNOCOOCFO

Hospital Staff

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

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.

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.

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

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

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?

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

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

Elizabeth ”Libby” SnelsonLegal Counsel for the

Medical Staff PLLCeasesq@snelsonlaw.com

MEDICAL

DOCUMENTS

Elizabeth A. Snelson

Legal Counsel for the

Medical Staff PLLC

easesq@snelsonlaw.com

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

Medical Staff Bylaws

Medical Staff Rules and Regulations

Medical Staff Policies

Effect/Weight of Bylaws

Content

Sources of Conflicts

Medical Staff PLLC

Effect/Weight of Bylaws

Medical Staff PLLC

oBylaws as

Contract

oBylaws Binding

on Parties

Content

Medical Staff PLLC

oJoint Commission

Standard MS 01.01.01

oCheck State Law

o Findable? Applicable?

Medical Staff PLLC

oNo Unilateral

Amendment

oJoint

Commission

Standard MS

01.01.01

Solving ConflictsEmployed Physicians

Code of Conduct

Medical Staff PLLC

easesq@snelsonlaw.comThis Photo by Unknown Author is licensed under CC BY-NC

ADDRESS IN MEDICAL STAFF

DOCUMENTS Elizabeth A. Snelson

Medical Staff PLLC

Employed Physicians

Subject to the same credentialing requirements

Subject to peer review

Covered by hearing and appeals rights

Eligible for leadership

Protected from retaliation

Medical Staff PLLC

Screen candidates and reviewers

Identify employment conflicts

Require disclosure to appointers

Require disclosure to voters

Medical Staff PLLC

Code of Conduct

Address inappropriate behavior

Include sexual harassment of members

Coordinate with hospital compliance code

Align with corrective action process

Medical Staff PLLC

In case there are still conflicts...

This Photo by Unknown Author is licensed under CC BY-SA-NC

Conflict Resolution Process

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

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

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

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

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

Fix the Medical Staff Documents

Use Bylaws to Address Known Issues

Include Conflict Management Processes

Medical Staff PLLC

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

1. Credentialing

arentfox.com

• 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

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

Accreditation Requirements: The Joint Commission

arentfox.com

Accreditation Requirements: The Joint Commission

arentfox.com

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

2. OPPE / FPPE

arentfox.com

Ongoing Professional Practice Evaluation (OPPE)

TJC Standard

MS. 08.01.03

Ongoing / Maintaining

privileges

Helps identify trends early

Can lead to “for cause”

arentfox.com

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

3. Problems / issues

identified

arentfox.com

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

“for cause” FPPE

• Different from initial privileges FPPE

• Meet NPDB’s definition of investigation?

arentfox.com

4. investigation

arentfox.com

Whatis it?

• Process provided in the Medical Staff Bylaws beforetaking corrective action

arentfox.com

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

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

Why investigate?

• To discover facts to establish truth!

arentfox.com

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

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

When to Stop

Investigations Need Conclusions

Written report to the

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)

5. CORRECTIVE ACTION

arentfox.com

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)

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

6. Fair hearing

arentfox.com

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

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

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 …”

Questions?

ContactAnnie C. Lee

Associate

213.443.7680

annie.lee@arentfox.com

arentfox.com

MEDICAL STAFF CHALLENGES: OVERCOMING CONFLICTS BETWEEN HOSPITALS AND MEDICAL STAFFS

Presented by: Jennifer A. Hansen. Esq. May 22, 2019

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).

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

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

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

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

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

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

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

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

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)

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

• 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

• 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

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

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

QUESTIONS?

PRESENTER

Jennifer A. Hansen

Hooper, Lundy & Bookman, P.C.

Chair, Medical Staff Practice Group

Jhansen@health-law.com

619.744.7310

BOSTON LOS ANGELES SAN FRANCISCO SAN DIEGO WASHINGTON D.C.83

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