[MEDICAL STAFF] LIFECYCLE
OF A [HOSPITAL EMPLOYED]
PHYSICIAN
Nick Healey, Dray, Dyekman, Reed & Healey, PC
Health care integration is being driven
by reform, economics and culture.

The Hospital Side:
 Transformation
of Medicare/Medicaid and
third party payors from "passive payers" to
"active purchasers".
 Decline in reimbursement and perceived need
to control providers’ practice to achieve
efficiencies and conserve scarce resources.
 Uncertainty about the future.
Health care integration is being driven
by reform, economics and culture.

The Provider Side:
 Rising
overhead costs (such as
EHR's)/(perceived) declining reimbursement
 Lifestyle desires (decline of the "work
devotion ideal")
 Concern about the future/desire for security
The result (in Wyoming) is more
hospital-physician integration.

Traditional Wyoming model: Hospital + independent
medical staff.
This is reflected in the Medicare COP’s, Wyoming’s licensing
regulations and Joint Commission standards.
 Also reflected in Wyoming ‘peer review’ and ‘PSRO’
statutes.



But in response to reform and economics, hospitals are
(again) absorbing primary care practices, and
increasingly subspecialists.
The result is a blurred line between the medical staff
and hospital employees.
Wyoming's primary integration models
are straightforward

Most Wyoming hospital-physician integration efforts
are either:
 Hospital-employed
physicians;
 Hospital
directly employs the physicians, all staff, to provide
services in either in the hospital or in hospital-owned space.
 Hospital-sponsored
 Physicians
medical groups.
and staff are employed by a wholly-owned
subsidiary (often an LLC) of the hospital, but don’t own the
group.
HR and MS are not the same thing.


Wyoming’s licensing regulations, Joint Commission
standards and COP’s still require the hospital to
have a medical staff that fulfills certain functions.
In most Wyoming hospitals, there are still
independent physicians as well as hospitalemployed physicians.
 Different
legal requirements apply to HR and medical
staff.

Hospital administration may not appreciate this
distinction.
Critical areas

Information flows between HR and Medical Staff
 Particularly
in applications and processing initial
employment


Disciplinary issues
Termination procedures
Information flows

General principle: Information generated by
medical staff processes is confidential and
privileged and cannot be shared with other areas
of the hospital.
Wyoming’s Peer Review Statute

Wyo. Stat. §35-2-609(d): "Reports, findings,
proceedings and data" of "medical staff
committees” which relate to:
supervision,
discipline, admission, privileges
or control of members of the hospital's
medical staff, evaluation and review of
medical care, utilization of the hospital
facilities or professional training…
The Credentialing Process is a Medical
Staff process

Medical Staff applications, and credentialing,
generally take place under the auspices of a
medical staff committee.
 Joint
Commission Standard
 Medicare COP
 Wyoming licensing regulation
Information generated in credentialing
is confidential and privileged


Information gathered by the medical staff in the
process of evaluating a candidate for admission is
therefore subject to these statutes.
Information that can be obtained from original
sources is not confidential simply because its been
reported to a medical staff committee, but it can’t
be obtained from the committee.
How would this come up?



The CEO comes to you and says, "We're hiring Dr. B.
Real. He'll be applying for medical staff membership
and clinical privileges. HR is processing him too.”
60 days go by.
You get a panicked call from the CEO, "Dr. Real has
been hired and processed by HR. He has a full day of
surgeries scheduled on Monday, but he says he hasn't
been approved for medical staff membership or
privileges!" [It's Friday, and you haven't seen an
application]
Do you…


Call HR to get as much information as they can give
you, or
Tell the CEO its not your problem?
Call HR!


HR can disclose information gathered in the HR
process for use in the Medical Staff Office.
Best practice: The hospital's (or hospital-sponsored
medical group's) physician employment agreements
should explicitly authorize this information-sharing.
 Or,
if a hospital-sponsored medical group, have an
information sharing agreement with the hospital
allowing this information to flow from the group to the
hospital.
The shoe is on the other foot…


You got an application from Dr. Real, and processed
it and he was appointed to the medical staff and
received clinical privileges.
BUT...the CEO calls on Friday and says, "Dr. Real has
a full day of patients scheduled on Monday and we
don't have him processed through HR!"
Do you…


Provide HR with the information Dr. Real submitted
in his medical staff application; or
Politely tell the CEO that state law prohibits you
from disclosing or using information gathered in the
medical staff credentialing process for other
purposes, even other hospital purposes?
Unfortunately,

The information can only flow one way.
 Under
Wyoming's 'peer review' statute information
gathered on behalf of a medical staff committee (the
credentialing committee) is confidential and privileged
and should not be disclosed outside that process.
 Plus, the 'peer review' statute is part of Wyoming's
Hospital Records Information Act, and it's a
misdemeanor to violate the WHRIA.
If HR checks his references, do you still
have to do primary source verification?




You should.
The Joint Commission standard requires primary
source verification through the medical staff process.
There’s no explicit exception for performing some
portions of the medical staff credentialing process
through another hospital process.
There are different Joint Commission standards for
each process; the JC will want to see evidence in
your file that you’ve conducted this verification
according to the medical staff process.
Disciplinary actions



Dr. Real begins practice. All goes well for months,
months turn into years....
But then you get a call from HR - "We think that Dr.
Real has violated his employment agreement by
breaching the Code of Conduct. We need copies of
all the complaints that you've received about him to
determine if we should terminate his employment.”
Do you –
 Give
HR copies of all the complaints that the MSO has
received about Dr. Real?
Depends how your complaint system
works
 If
the complaints were received in the course of a
medical staff investigation, and don’t exist anywhere
else, then they are subject to the ‘peer review’ statutes
protections (and Wyoming’s professional standard
review organization’ statute)
 But, if the complaints were made through administrative
channels, and simply provided to the medical staff
office, they may not be confidential and privileged.
 Original
source Information exception – simply because it is
reported to the medical staff office does not make it subject
to the statute’s protections.
Termination procedures




The complaints continue.
The hospital wants to terminate Dr. Real's
employment, and gives Dr. Real 90 days notice of
termination.
Dr. Real writes you a letter asking for a hearing
under the Medical Staff Bylaws.
Is he:
 Entitled
to a hearing
 Under the Medical Staff Bylaws?
It depends!



It's unlikely that he's entitled to a hearing under the
Medical Staff Bylaws, but not impossible.
Usually Bylaws exclude “termination of hospital
employment” as corrective action triggering a hearing.
But check the Bylaws, because they may be unclear, or
may state that a hearing is required in that situation.
The Medical Staff may have inserted it in past revisions.
 If this is in your Bylaws, it’s probably something you want to
remove.

However…



Dr. Real may be entitled to a pre-termination hearing
under the Hospital's employment policies, or his contract
(if he negotiated it).
If the hospital is a governmental entity, under certain
circumstances government employees (even physicians)
can have a property interest in continued employment
that can't be taken away without a hearing, particularly
if public statements have been that injure his/her
reputation.
But those hearing rights don’t arise under the Medical
Staff Bylaws.
Termination procedures




Dr. Real’s employment is terminated on Friday, but
has a surgery scheduled on Monday.
Monday morning, the Director of Surgical Services
calls and asks, “Does he still have clinical privileges
to operate?”
Monday afternoon, the clinic manager of Dr. Real’s
hospital clinic calls and asks if Dr. Real can still see
patients in his clinic.
Can he do both, either, or none of these?
It depends!

Surgery: Check the Bylaws and/or his contract
 Often,
the Medical Staff Bylaws and/or the physician’s
contract will provide that termination of hospital
employment automatically terminates the physician’s
medical staff membership and/or clinical privileges.
 If not, Dr. Real’s clinical privileges are probably still
intact and he probably can perform the surgery.
 Medical
staff membership and employment are not
automatically co-extensive unless they are linked by contract
or the Bylaws.
It depends!

Clinic: Where is it?
 Owned
and operated by a hospital-sponsored medical
group? Dr. Real can’t use it.
 Owned by the hospital, but not licensed as an
outpatient department: Dr. Real probably can’t use it.
 Owned by the hospital, licensed as a hospital
outpatient department (ie. Wound care clinic): Dr. Real
may be able to use it if he retains appropriate clinical
privileges.
A twist…


Dr. Real’s hospital employment was terminated for
poor clinical performance.
The CEO calls and asks, “Do we have to file a
report with the NPDB?”
National Practitioner Data Bank


No, adverse employment action by itself is usually
not an “adverse action” that has to be reported to
the NPDB.
NPDB Guidebook, p. F-9
 Hospital-employed
physician’s employment and clinical
privileges terminated under Hospital’s “employment
termination procedure”. Hospital also had a peer
review process, but that wasn’t used. Hospital filed an
NPDB report, which physician disputed.
 The report was inappropriate because it did not result
from peer review process.
But do you have to report to the
Wyoming Board of Medicine?



It depends!
Wyoming’s Medical Practice Act (Wyo. Stat 33-26409(a)) requires a “health care entity” to report
any action it takes against a licensee on the basis
that the licensee is impaired, or has engaged in
conduct that are grounds for disciplinary action
under the Act.
“Health care entity” includes a hospital or a clinic,
that follows a “peer review process for the purpose
of furthering quality health care.”
Wyoming Board of Medicine Reporting



There’s no requirement that the action be the
product of the peer review process to be
reportable, unlike the NPDB.
If Dr. Real’s “poor clinical performance” conduct
below the standard of care, it may be reportable.
Likewise, if Dr. Real was terminated because he was
impaired, it may be reportable.
Wyoming Board of Medicine Reporting

What if Dr. Real was employed by a hospitalsponsored medical group?
 If
the group has a peer review process, you probably
have to report.
 The Wyoming Board of Medicine accepts that without a
peer review process, you don’t fall within the statute,
but they don’t like it.
 Further integration will likely result in the Board
changing the Act to require more reporting of
employment terminations.
Reference requests



Dr. Real’s medical staff membership and clinical
privileges terminate with his hospital employment.
The Medical Staff Office gets a reference request from
another hospital for Dr. Real, asking specifically for
clinical performance information, and any other
information in your possession you believe relevant.
Included is a release from Dr. Real, authorizing you to
disclose any and all information in his medical staff file
requested by another hospital in connection with a
medical staff application.
Reference requests



No action was taken against his medical staff
membership or clinical privileges because they
terminated automatically when his hospital
employment terminated.
His HR file is replete with documentation of poor
clinical performance.
Do you provide that?
Probably not.




HR and Medical Staff are separate.
If the hospital’s request, and Dr. Real’s authorization,
was directed to the Medical Staff Office, and was for
information in his medical staff file, it’s safer to read
that narrowly.
Your response should be specific: “We’ve reviewed our
medical staff file and found no instances of corrective
action on the basis of poor clinical performance.”
If the request was to the hospital generally, you have a
judgment to make.

But also consider that his personnel (HR) file may also be
protected by the Public Records Act.
Questions? Comments?



Nick Healey
Nick.healey@draylaw.com
307-634-8891