1. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. MS.01.01.01: A Corporate Lawyer’s Perspective Presented by David L. Kyger Smith Moore Leatherwood LLP David.Kyger@smithmoorelaw.com 300 N. Greene Street, Suite 1400 Greensboro, NC 27401 T: 336.378.5551 F: 336.433.7453 To ask a question during the presentation, click the Q&A menu at the top of this window, type your question in the Q&A text box, and then click “Ask.” After you click Ask, the button name will change to “Edit.” Questions will be queued and most will be answered at the end of the meeting as time allows.

2. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Question 1 What are other names for MS.01.01.01?

3. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Answer 1 MS.01 Cubed MS.01 Q? Not. MS “too many numbers”

4. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Question 2 What is the most reassuring thing you’ve read or heard concerning compliance with MS.01.01.01?

5. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Answer 2 “Given the flexibility provided for in the revised standard, a limited amount of revision is all that may be needed. In some cases, no revisions may be required.” –Frequently Asked Questions Regarding Standard MS.01.01.01, The Joint Commission website

6. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Question 3 What is the “flexibility” referred to in the previous answer? Where does this added flexibility come from?

7. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® EP 3 Every requirement set forth in Elements of Performance 12 through 36 must be in the medical staff bylaws. These requirements may have associated details, some of which may be extensive; such details may reside in the medical staff bylaws, rules and regulations, or policies. The organized medical staff adopts what constitutes the associated details, where they reside, and whether their adoption can be delegated. Adoption of associated details that reside in medical staff bylaws cannot be delegated. For those Elements of Performance 12 through 36 that require a process, the medical staff bylaws include at a minimum the basic steps, as determined by the organized medical staff and approved by the governing body, required for implementation of the requirement. The organized medical staff submits its proposals to the governing body for action. Proposals become effective only upon governing body approval. (See the Leadership chapter for requirements regarding the governing body’s authority and conflict management processes.)

8. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Answer 3 Medical staff bylaws must contain “every requirement” set forth in Elements of Performance 12 through 36, but only a basic framework, not all the details. Use EP’s 12 - 36 as a checklist against existing medical staff bylaws. For EP’s that require a process, the medical staff bylaws need only contain the basic steps required for implementation. The details do not have to appear in the medical staff bylaws. The details can be placed in freestanding policies, rules or regulations.

9. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Question 4 EP 3 says that the details may reside in the medical staff bylaws, rules and regulations, or policies. Does it really make a difference where the organized medical staff (OMS) puts the details, as between the bylaws, the rules and regulations, or the policies?

10. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Answer 4 It can make a difference in the process for changing the details, and, accordingly, in the ease or lack thereof associated with amendments. Remember that the medical staff bylaws can only be amended by the voting members of the OMS, so if the details are in the bylaws a vote of OMS is required As between rules and regulations on the one hand and policies on the other, assume that the OMS has delegated to the Medical Executive Committee the authority to change the details. Look at EP 9.

11. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® EP 9 If the voting members of the organized medical staff propose to adopt a rule, regulation, or policy, or an amendment thereto, they first communicate the proposal to the medical executive committee. If the medical executive committee proposes to adopt a rule or regulation, or an amendment thereto, it first communicates the proposal to the medical staff; when it adopts a policy or an amendment thereto, it communicates this to the medical staff. This Element of Performance applies only when the organized medical staff, with the approval of the governing body, has delegated authority over such rules, regulations, or policies to the medical executive committee.

12. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Answer 4 (cont’d.) Thus, if the details are placed in the rules and regulations, the MEC must give the OMS prior notice of changes. In contrast, if the details are placed in policies, prior notice is not required.

13. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Question 5A What’s the next most reassuring thing you’ve heard or read about compliance with MS.01.01.01?

14. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Answer 5A “Do what makes sense, in good faith.” –Representatives of The Joint Commission, speaking at an AHLA webinar in September, 2010

15. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Question 5B Do you buy that?

16. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Answer 5B [This slide under construction.]

17. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Question 6 From your standpoint as a corporate lawyer focused on governance issues, what is the most troubling thing about MS.01.01.01?

18. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Answer 6 MS.01.01.01 can put the governing body (e.g., the hospital’s board of trustees) in a no-win situation. For example, suppose applicable law is amended, and an amendment to medical staff bylaws, rules or regulations is required in order to comply with the law as amended. (EP 4 provides that the medical staff bylaws, rules and regulations, and policies, the governing body bylaws, and the hospital policies must be compatible with each other and compliant with law.) If the organized medical staff (OMS) won’t agree to the change, the governing body is stuck, because only the OMS “adopts and amends” medical staff bylaws, subject to governing body approval (under EP 2).

19. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Question 7 What’s the big deal about the governing body being in this situation?

20. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Answer 7 Members of the governing body have fiduciary duties (often articulated as a duty of care, a duty of loyalty, and a duty of obedience) that, if breached, can result in individual liability

21. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Question 8 Doesn’t EP 11 offer some help to the governing body in the hypothetical no-win situation you describe?

22. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® EP 11 In cases of a documented need for an urgent amendment to rules and regulations necessary to comply with law or regulation, there is a process by which the medical executive committee, if delegated to do so by the voting members of the organized medical staff, may provisionally adopt and the governing body may provisionally approve an urgent amendment without prior notification of the medical staff. In such cases, the medical staff will be immediately notified by the medical executive committee. The medical staff has the opportunity for retrospective review of and comment on the provisional amendment. If there is no conflict between the organized medical staff and the medical executive committee, the provisional amendment stands. If there is conflict over the provisional amendment, the process for resolving conflict between the organized medical staff and the medical executive committee is implemented. If necessary, a revised amendment is then submitted to the governing body for action.

23. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Answer 8 No. EP 11 allows for a process, where there is a need for an “urgent amendment” to the organization’s “rules and regulations,” in which the Medical Executive Committee can speak for the OMS (if the OMS has delegated that authority), and can provisionally adopt rules and regulations that comply with the law as amended, and, if it does so, the governing body may provisionally approve an urgent amendment. Neither EP 11 nor any other EP allows unilateral action by the governing body in amending the medical staff bylaws, or the medical staff rules and regulations.

24. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Question 9 What is the governing body’s “right path” in such cases?

25. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. ® Answer 9 According to The Joint Commission, the answer lies in communication, collaboration and conflict resolution, by and among the governing body, the Medical Executive Committee, and the Organized Medical Staff.

26. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Standards For Corrective Action Presented by: Samuel O. Southern Smith Moore Leatherwood LLP 434 Fayetteville Street, Suite 2800 Raleigh, NC 27601 T: 919.755.8730 F: 919.838-3127

27. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Standards For Corrective Action Improving Quality of Care Protecting Participants with Immunity and Confidentiality Minimizing Claims (from both physician and patient) Meeting Joint Commission Requirements

28. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Professional Review Actions Focus: How Hospitals should undertake professional review actions based on the competence or professional conduct of a physician Which conduct affects or could affect adversely the health or welfare of a patient or patients, and Which conduct affects (or may affect) adversely the clinical privileges of the physician

29. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Guidance For Effective Corrective Action (1)HCQIA -- provides IMMUNITY (2)Joint Commission – creates STANDARDS (3)Statutes – protect CONFIDENTIALITY (4)NC case law -- creates DUTY to monitor MDs

30. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Caught In The Cross-Fire Failure to follow controlling authority in (1) – (4) can put hospitals in a cross-fire from three directions –Patients –Members of the Medical Staff –Joint Commission Horns of the Dilemma –Get sued by the patient, if you fail to take corrective action against the bylaws –Get sued by the MD, if you do take corrective action

31. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED.

33. N.C. State Law: A Legal Duty To Monitor And Oversee State Law: Hospital has a duty to make a reasonable effort to monitor and oversee the care being provided by physicians to hospital patients Bost v. Riley, 44 N.C. App. 638, 262 S.E.2d 291, cert. denied, 300 N.C. 194, 269 S.E.2d 621 (1980) Blanton v. Moses Cone Hosp., 319 NC 372, 354 S.E.2d 455 (1957) The Supreme Court, Webb, J., held in Blanton that: 1) Hospital owed duty of care to patient to ascertain that doctor, who was not agent of hospital, was qualified to perform operation 2) Hospital had duty to monitor and supervise physician's overall performance in hospital on ongoing basis

34. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. How Do Hospitals Comply With The Legal Duty? How does a hospital "monitor and oversee" physician care? Through its Medical Staff by –Credentialing –Recredentialing –Performance Improvement –Peer Review –Corrective Action/Professional Review Action

35. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. HCQIA Immunity Health Care Quality Improvement Act. 42 U.S.C. § 11111 –Provides immunity from damages for those who participate in professional review actions, so long as they conduct the professional review within the safe harbor of HCQIA

36. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Insuring HCQIA Immunity From Damages If a professional review action meets all the standards specified in section 11112(a) of HCQIA, no person shall not be liable in damages under any law11112

37. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Exceptions Statutory immunity may be lost if –Violation of civil rights –Knowingly provide false information –Failure to comply with reporting requirements of HCQIA

38. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Navigating The Safe Harbor Of HCQIA What must a hospital do to bring itself within the safe harbor of HCQIA? 42 U.S.C. § 11112(a).For purposes of immunity, a professional review action must be taken (1)in the reasonable belief that the action was in the furtherance of quality health care (2)after a reasonable effort to obtain the facts of the matter (3)after adequate notice and hearing procedures are afforded to the physician involved (4)in the reasonable belief that the action was warranted by the facts known after such reasonable effort to obtain facts and after meeting the requirement of paragraph (3) Summary: Adhere to (1)-(4) and immunity attaches to the proceedings

39. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Presumption Of Compliance With Standards A professional review action shall be presumed to have met the preceding standards necessary for immunity unless the presumption is rebutted by a preponderance of the evidence The Statute puts the B/P on the person/entity who seeks to attack the recommendations sought to be enforced The lesson here: The law does not place the B/P on the Hospital (although the Hospital, through bylaws, hearing plan, etc. can place the burden on itself) B/P is NOT on the hospital to show clinical deficiencies, disruptive behavior or anything else

40. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Burden Of Proof: Check The Bylaws Many hearings turn on the question of who has the B/P Bylaws usually answer the question Example #1: B/P is on hospital to prove by a preponderance of the evidence Example #2: B/P is on practitioner to prove by clear and convincing evidence that the hospital's decision was arbitrary, unreasonable, or not supported by the evidence

41. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Notice And Hearing Requirements A health care entity is deemed to have met the adequate notice and hearing requirement of HCQIA if the following conditions are met or waived –The physician has been given notice stating: that a professional review action has been proposed the reasons for the proposed action the physician has the right to request a hearing the physician's rights at the hearing

42. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Additional Notice When A Hearing Is Requested If a hearing is requested, the physician must be given additional notice stating –the place, time, and date, of the hearing, which date shall not be less than 30 days after the date of the notice –a list of the witnesses (if any) expected to testify at the hearing on behalf of the professional review body

43. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Practitioner Rights At The Hearing An impartial “decider” is: –a mutually acceptable" arbitrator –a hearing officer appointed by the entity –a panel not in "direct economic competition” Representation by an attorney To have a record made of the proceedings (but must pay for his/her own copy) To call, examine, and cross-examine witnesses To present evidence determined to be relevant by the hearing officer, regardless of its admissibility in a court of law To submit a written statement at the close of the hearing To receive the written recommendation of the panel, including a statement of the basis for the recommendations To receive a written decision of the health care entity, including a statement of the basis for the decision

44. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Exceptions To “Trial Before Punishment” If suspension/restriction of clinical privileges is less than 14 days, during which an investigation is being conducted, OR In the case of summary suspension, where the failure to act "may result in an imminent danger to the health of any individual" –Practitioner may be suspended, with hearing to come later –Immunity is preserved for participants

45. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Joint Commission Overview MS is responsible for the ongoing evaluation of the competency of practitioners who are privileged MS must maintain bylaws that define its responsibilities for the oversight of care, treatment and services MS primary responsibility is to provide oversight of care provided by practitioners with privileges

46. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. MS Bylaws As A Contract Maintained by the Medical Staff Must be approved by governing body Joint Commission –Bylaws create a “system of rights and responsibilities” between MS and the governing body –Bylaws creates a “system of rights and responsibilities” between the MS and its members –Bylaws are contractual: Virmani v. Presbyterian, 127 NC App 71, 448 SE 2d 284 (1997)

47. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Joint Commission – Other Governing Documents MS may create them, including policies, procedures, rules and regs, fair hearing plan, etc. But the requirements of the Elements of Performance ("EPs") for MS.01.01.01 “must be retained in the MS bylaws.”

48. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Joint Commission: Elements Of Performance For MS 01.01.01 Which Are Related To Corrective Action EP 28 –Indications for automatic suspension of a practitioner's MS membership or clinical privileges EP 29 –Indications for summary suspension of a practitioner's MS membership or clinical privileges EP 30 –Indications for recommending termination or suspension of medical staff membership, and/or termination, suspension, or reduction of clinical privileges EP 31 –The process for automatic suspension of a practitioner's medical staff membership or clinical privileges EP 32 –The process for summary suspension of a practitioner's medical staff membership or clinical privileges EP 33 –The process for recommending termination or suspension of medical staff membership, and/or termination, suspension, or reduction of clinical privileges EP 34 –The fair hearing and appeal process, which at a minimum shall include The process for scheduling hearings and appeals The process for conducting hearings and appeals EP 35 –The composition of the fair hearing committee

49. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. MS Standard 10.01.01 Corrective Action There are mechanisms including a fair hearing and appeal process for addressing adverse decisions regarding reappointment, denial, reduction, suspension, or revocation of privileges that may relate to quality of care, treatment, and services issues Designed to allow the practitioner the opportunity to: –Defend himself/herself before an impartial panel –Appeal any adverse decision to the GB

50. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Elements Of Performance (EPS) For MS 10.01.01 Provide a fair process that may differ for members and non-members of the MS Provide a mechanism to schedule a hearing Identify procedures for the hearing to follow Identify the composition of the hearing panel, with provision for impartial peers Provide a mechanism for appeal to the governing body

51. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. MS 06.01.09 – Notice To Practitioner Of Adverse Action Adverse decision to be communicated to practitioner within the time required by the MS bylaws If denial, reason for denial If adverse, decision must be disseminated as required by hospital and bylaws The process of disseminating outcome has been approved by the MS The hospital makes the practitioner aware of due process and, if applicable, the option to implement the fair hearing plan

52. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. MS 11.01.01 – Practitioner Health Issues The MS implements a process to identify and manage matters of individual health for licensed independent practitioners which is separate from actions taken for disciplinary purposes Duty to provided education regarding impairing conditions Goal is to optimize professional functioning consistent with protection of the Patient

53. © 2010 Smith Moore Leatherwood LLP. ALL RIGHTS RESERVED. Conclusion And Summary Bylaw provisions should comply with Joint Commission requirements relating to fair hearing and corrective action Bylaw provisions should comply with the minimum standards of HCQIA, but not more Bylaw provisions should comply with state and federal law so as to insure confidentiality Document, document, document throughout the course of a corrective action Result: Improve the quality of care, maintain confidentiality of privileged documents, protect your institution and those who participate in the process by guaranteeing HCQIA immunity from civil action damages