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The Regulation of Hospital Medical Staff

What New Federal Regulations Mean for Your Hospital Practice by Elizabeth A. Snelson, Esq.

MEDICARE CONDITIONS of Participation have a lot to do with what you get to do in the hospital.
Even if your practice does not include Medicare beneficiaries.
Even if you are not a Medicare participant.
If you take care of patients in a hospital, the Medicare Conditions of Participation are determinative. For the hospital to qualify for Medicare payments, it has to satisfy the federal regulations known as the Conditions of Participation. The overwhelming majority of hospitals in the U.S. participate in Medicare, so every physician who does anything in a hospital is affected by what the Conditions of Participation say. And, like most regulations, politics come into play, as they did in a recent process to change those Conditions. This article focuses on the effect of the ultimate changes on the medical staff organization.

Where is the Medical Staff?
As part of a general initiative to streamline regulatory oversight of healthcare, the Centers for Medicare and Medicaid Services (“CMS”) undertook a broad review of the Conditions of Participation, yielding proposed changes published Oct. 24, 2011. As stated in the introduction to the proposed Conditions, the identification and prioritization of issues was a “result of outreach to hospital stakeholders, such as the American Hospital Association (AHA) and TJC (The Joint Commission).” The hospital perspective of the proposal was unmistakable. In addition to cutting restrictions on allied health professionals practicing in hospitals, the proposed Conditions would have undermined medical staff organizations, as follows:

  • Any system of multiple hospitals could eliminate the medical staff organizations in the individual hospitals, replacing them with a single “unified” medical staff, thereby diluting the medical staff leadership and representation.
  • Physicians would be allowed to have privileges and carry them out without being members of the medical staff, thereby diminishing if not effectively eliminating an organized medical staff.
  • The proposal also authorized hospital systems to consolidate their governance into one board, thereby sacrificing local oversight and collaboration with the physicians caring for the sick at that location.
  • There was no corresponding proposal to change the Condition of Participation at §482.12(b), which states that, “The governing body must appoint a chief executive officer who is responsible for managing the hospital.” Consequently, every hospital would still have to have its own CEO- but not its own board chairman or chief of staff. Administrators would run the hospitals without having to deal with a board or a medical staff organization.

Medical Staff Organizations Mandated
Medicine was generally in a reactive rather than proactive position on the proposal for changes in the Conditions of Participation, but still, react it did. Triggering the AMA response was a November 2011 resolution by the AMA Organized Medical Staff Section (comprised of physicians representing their medical staffs) that called on the AMA to “actively oppose any Centers for Medicare and Medicaid Services (CMS) policy that would bypass or remove the clinical quality and safety oversight, credentialing and privileging responsibilities of the physician members of the Organized Medical Staff, or that would allow a practitioner to practice at a hospital without being a member of the medical staff.” Other medical societies acted also.  CMS reported that of the 1,729 public comments filed during the comment period on the proposed Conditions of Participation, “(a)pproximately 1,100 of the comments were part of a write-in campaign from anesthesiologists that supported what they described as CMS’ upholding of physician supervision requirements, but objected to what the letters described as an effort to replace physicians with nurses.”

The final regulations suggest organized medicine was successful in educating CMS on the importance of the medical staff organization. Gone is any indication that a system of multiple hospitals can get by with a single medical staff.  Further, the “privileges only” scheme was dropped. Consequently, under the final regulations, hospitals will not be able to steer employed physicians to a “privileges only” category without the rights attached to medical staff membership.

Stayed Tuned
To increase physician participation in hospital governance, the final regulations also mandated that every hospital board have at least one physician member. However, the American Hospital Association vehemently objected to having even a single physician on every hospital board, and on procedural grounds CMS postponed implementation of this new requirement. The remaining changes in Conditions of Participation are effective July 16, 2012; additional rule-making on the physician board member requirement is anticipated.

Elizabeth A. Snelson, Esq. is legal counsel for the Medical Staff, PLLC. She can be reached at easesq@snelsonlaw.com.

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