CMS PUBLISHES CORRECTED 2008
AMBULATORYSURGERYCENTER FEE SCHEDULE
On February 22, 2008, CMS published corrections to the 2008 payment rates for ambulatory surgery centers. Following is the link to the corrected final rule.
http://a257.g.akamaitech.net/7/257/2422/01jan20081800/edocket.access.gpo.gov/2008/pdf/08-671.pdf
PEER REVIEW NEWS: NEVER RESIGN PREMATURELY
Catholic Health Initiatives v. Gross is an excellent example of why premature resignations of medical staff privileges could have permanent adverse consequences. Dr. Gross was recruited by Centura Health – St. Thomas Moore Hospital, which is operated by Catholic Health Initiatives. Shortly after the commencement of the contract, Dr. Gross was involved in a peer review investigation, after which the Medical Executive Committee required Dr. Gross to obtain an evaluation of his surgical skills and requested that he voluntarily withdraw his privileges for certain surgical cases until the completion of the recommended corrective actions. MEC told Dr. Gross that he could be summarily suspended if he failed to follow those recommendations.
Dr. Gross abruptly resigned, but his first resignation specified a future effective date. The MEC responded by questioning whether Dr. Gross intended to voluntarily withdraw his privileges during the interim period, after which Dr. Gross sent a second resignation letter effective immediately. Shortly thereafter, Dr. Gross sent a third letter stating that he had not had sufficient time to consider his options and attempting to withdraw his resignation. The MEC responded by advising Dr. Gross that he could not withdraw his resignation and that he would have to reapply for medical staff privileges if he wished to continue at the hospital. Dr. Gross never submitted a new application nor did he request a hearing regarding the adverse peer review actions which had already occurred. The hospital thereafter reported Dr. Gross to the National Practitioner Data Bank for resigning while under an investigation.
Centura Health then sued Dr. Gross for advances paid pursuant to the Recruitment Agreement, and Dr. Gross counterclaimed against the hospital and the Medical Executive Committee for denial of due process, failure to act in good faith, and tortious interference with existing and future business relationships. The United States District Court for the District of Colorado initially awarded and subsequently reaffirmed summary judgment in favor of the Medical Executive Committee, the individual members thereof, and the hospital, dismissing Dr. Gross’ claims for denial of due process and breach of implied duty of good faith and fair dealing. The hospital argued that Dr. Gross had no right to any due process under the bylaws because he resigned before any action was taken that would have entitled him to a hearing on to any of the other due process rights under the bylaws and that he had failed to exhaust his administrative remedies. The court agreed that the corrective action recommended by the hospital did not rise to the level of an adverse peer review action triggering due process rights pursuant to the bylaws, and also agreed that Dr. Gross had basically waived those rights by resigning and making himself ineligible for those protections.
The District Court also dismissed Dr. Gross’ claim that the hospital was tortiously interfering with his prospective business relationships by filing the National Data Bank Report, holding that the Data Bank Report accurately stated the facts that had occurred and was required by the Health Care Quality Improvement Act. Since the Data Bank Report was required and there was no doubt regarding the truth of the report, the immunity provisions of HCQIA protected the hospital.
The court declined only to grant summary judgment dismissing Dr. Gross’ claims for intortious interference with existing business relationships because there was a factual issue regarding the hospital’s allegedly defamatory statements to other members of the administration and medical staff which were not immunized as part of the peer review process.
Finally, the court also granted the hospital summary judgment on its contract action to recover funds advanced to Dr. Gross pursuant to the recruitment agreement.
The case illustrates the “double-whammy” associated with premature resignations of medical staff membership and clinical privileges. First, if the resignation is made during an investigation or in order to avoid an investigation, the act generates an automatic unfavorable Data Bank Report. Second, because of the doctrine of exhaustion of administrative remedies, resignation could, as happened in the Gross case, waive any opportunity to challenge the adverse peer review actions in accordance with the medical staff bylaws. Not only does that waive the right to pursue whatever due process rights a physician might have pursuant to the bylaws, but it also forecloses recourse to the civil courts, leaving the physicians with no recourse of any kind by the hospital stand behind the shield of HCQIA immunity. The key to piercing this shield of immunity is showing that the due process rights mandated by HCQIA were not provided. When the physician waives those rights by premature resignation, that opportunity is forever lost. A copy of the opinion granting the various motions for summary judgment and the subsequent opinion denying the motions of both parties to reconsider those orders is attached at the link below.
SIMPLE CMS EXPLANATION OF MEDICARE PHYSICIAN FEE SCHEDULE
CMS issued a relatively simple explanation of the Medicare Physician Fee Schedule on February 19, 2008. The release is entitled The Revised Medicare Physician Fee Schedule Fact Sheet for January 2008. It explains the following:
1. the work, practice expense, and malpractice expense components of the RVU formula;
2. the conversion factor process, the six month reprieve of the SGR reductions so that the conversion factor for the first six months of 2008 will be $38.0870;
3. the fact that the conversion factor will revert back to $34.0682 as of July 1, 2008.
http://www.cms.hhs.gov/MLNProducts/downloads/MedcrePhysFeeSchedfctsht.pdf
BY: Kenneth M. Ventresca, Esq., Lisa M. Ventresca, Esq. and Michael Cassidy, Esq.
Foreign Medical Graduates (FMGs) who reside and are employed in the United States on a J-1 Visa generally are required to return to their home country for a period of two (2) years as a prerequisite for applying for permanent residency or an H1B Visa. This requirement is known as the foreign residency requirement and constrains the immigration options for FMGs on J-1 Visas. The only way to get around the foreign residency requirement is to obtain a waiver.
PENNSYLVANIA HOSPITAL IMPOSES MANDATORY CALL
AND TERMINATES CLINICAL PRIVILEGES
Lehigh Valley Hospital has terminated the clinical privileges of three orthopedic hand surgeons because they won’t accept every hand injury case transferred to the Cedar Crest emergency room. The story was reported in the February 17, 2008 edition of the Morning Call and the full story can be accessed at the link below.
http://www.mcall.com/news/local/all-b1_5hand.6269571feb17,0,6433912.story?track=rss
The story highlights the conflict between hospital obligations to provide 24 hour coverage, usually mandated by EMTALA, and subspecialty physicians’ increasing unwillingness to accept call coverage responsibilities without additional compensation. However, it is important to note that the orthopedic hand surgeons who are the subject of this story maintain that call compensation is not an issue in this dispute; they maintain that the call coverage conflict is simply a result of too much volume putting resource pressures on their practices.
On January 25, 2008 CMS published a proposed rule which clarifies and expands the current enrollment requirements that durable medical equipment and prosthetics, orthotics and supplies ("DMEPOS") suppliers must meet to establish and continue to have billing privileges in the Medicare Program. These provisions may affect the ability of physical therapists to provide DMEPOS to their patients. The proposed rule is available at: http://a257.g.akamaitech.net/7/257/2422/25jan20081800/edocket.access.gpo.gov/2008/pdf/E8-1346.pdf and comments can be submitted until March 25, 2008.
Paul Welk
412-594-5536
pwelk@tuckerlaw.com
CMS recently modified its website to include a new page called Frequently Asked Questions and just added twelve questions and responses under the Physician Self-Referral page. Access the FAQs. at http://www.cms.hhs.gov/PhysicianSelfReferral/05a_FAQs.asp#TopOfPage.
Levy v. Clinton Memorial Hospital, a recent Ohio state court case, confirms the longstanding concept that hospitals may close medical staffs or departments for quality of care reasons, but also reaches the absurd legal conclusion that medical staff bylaws do not constitute contracts and that clinical privileges are equipment specific.
FACTS
Clinton Memorial Hospital expanded its cancer care facilities by adding a linear accelerator, which is really nothing more than upgrading to current standard of care. The hospital awarded a full-time exclusive contract to Dr. Stella Ling to provide radiation oncology services. The radiology oncology services were previously provided by a group consisting of Drs. Richard Levy, Peter Fried, and Marc Mosbacher.
The hospital took the logically absurd position that the exclusive contract did not impact the clinical privileges of Drs. Levy, Fried and Mosbacher, because they were still permitted to provide radiation oncology services at the hospital using the old equipment, but they were not entitled to use the linear accelerator. Of course, the old equipment had been removed and replaced by the linear accelerator. If widely adopted, this theory would allow hospitals to change privileges by changing equipment. Theoretically, hospitals could disenfranchise an entire group of specialists by replacing the equipment at the hospital.
CLOSED MEDICAL STAFF
Although the headlines of the case deal with the idea of closing a medical staff or a medical staff department, that is a fairly well accepted principal and not widely contested. The issue is really what happens to the physicians with existing staff privileges. When the closing of the medical staff department does not disenfranchise the existing physicians, there is rarely a complaint about the process. However, when physicians are replaced by other physicians, those disenfranchised are quick to suggest future denial of due process. This issue of often puts physicians against physicians.
MEDICAL STAFF BYLAWS AS CONTRACTS
The majority position on this issue is that medical staff bylaws do constitute contracts, as noted by general posts on the MedLaw Blog. This Ohio court goes to absurd legal constructions to find that medical staff bylaws do not constitute a contract. Primarily, the court finds there is no mutuality of obligations, because only the hospital is required to follow the bylaws and the physicians are not required to even practice at the hospital. Of course, if the hospital had actually terminated the physicians medical staff privileges under circumstances in which the hospital desired to utilize the medical staff to process procedures, the first argument the hospital would have made had the physicians gone straight to court is that the physicians were obligated to use the administrative remedies of the bylaws. Medical staffs would do themselves a great favor if they simply stated in the bylaws that the bylaws were intended to be binding on both parties. In fact, the court stated that the medical staff bylaws were merely statements of general intent and did not reflect any meeting of the minds.
DENIAL OF HEARING RIGHTS
The hospital denied that the physicians had medical staff due process hearing rights because, even though the change in the equipment might have been a constructive termination of their privileges, the privileges were not terminated for professional cause and the bylaws provided hearing rights only in the event of some type of professional cause termination. Ironically, the hospital is also arguing that it had the right to close the medical staff because it had the right to make improvements in quality of care, but that would not have been an issue had the physicians maintained their clinical privileges for the term of their appointments.
The issue medical staffs must confront in dealing with these issues is whether hospitals should be permitted to constructively terminate clinical privileges by awarding exclusive contracts or changing equipment during the term of the appointment of existing medical staff members, or whether those types of changes must protect those existing rights. No dispute would be raised if the hospital simply declined to renew the medical staff privileges of the current physicians at the next renewal time. After all, if the medical staff bylaws do constitute contracts and the physicians have two year appointments, those contractual two year appointments expire at the end of two years.
The complete text of the case is available at: http://op.bna.com/hl.nsf/r?open=mapi-7anrfh.Med Law Blog is published by Michael Cassidy
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