One provision of the Patient Protection and Affordable Care Act that takes effect at the end of this year is the restriction on physician ownership of hospitals in the Medicare program.  The health reform law also places major limits on the expansion of existing physician-owned hospitals.

New physician-owned facilities that are not certified as Medicare participants by December 31, 2010 will no longer be allowed into the program after that date.  Other changes to the law include capping levels of physician ownership, ending some exceptions to Stark self-referral bans and mandating more disclosure of physician owners’ potential conflicts of interest, if they send their patients to their own facilities.

Past legislative attempts to limit physician ownership of hospitals often targeted specialty hospitals such as orthopedic, cardiac and other surgical facilities.  However, limitations enacted by the PPACA will also impact acute care facilities, even some community hospitals that may have been financially supported by their physicians in the past.

Until many pending federal lawsuits are settled, existing plans for new or expanding physician-owned hospitals are in a holding pattern.  The new law caps ownership levels to where they were at the bill’s passage (March 23, 2010).  According to the Physician Hospitals of America, there are currently 265 physician-owned facilities in 34 states that employ more than 75,000 workers with an average bed size of 233 general acute care beds that will be negatively impacted by the restrictions.

The North Carolina Medical Society (NCMS) hosted almost 100 physicians and consultants in Raleigh at the ACO Summit on Saturday, August 7, 2010.  Accountable Care Organizations (ACOs) are an emerging model for health care delivery for Medicare services under Health System Reform.  ACOs link groups of providers together to coordinate and improve quality and efficiency in health care by fostering greater accountability in the delivery of care.

ACO Summit attendees heard presentations offering perspectives on ACOs from the Brookings Institute, Crescent PPO, Community Care of North Carolina, Poyner and Spruill, LLP, and Smith Anderson.  Participants discussed how new business models can improve the delivery of health care and how physician participants can use existing successful programs as a foundation for ACOs.  The Summit also reviewed the NCMS current draft policy on Accountable Care Organizations, to be considered by the NCMS Board of Directors in September.

Presentations and materials from the ACO Summit can be found on the NCMS Health System Reform page http://www.ncmedsoc.org/healthreform. If you would like to offer feedback on the draft policy on ACOs or provide information on ACOs being developed in your area, please complete and submit the feedback form also found on the Health System Reform page.  Please submit feedback regarding the draft policy by August 30, 2010.

With the North Carolina Medical Society (NCMS) Annual Meeting rapidly approaching, NCMS Committees have been completing work that will be affirmed by the House of Delegates.  On August 6, both the Physician-Hospital Issues Committee and the Communications & Membership Advisory Committee met at NCMS Headquarters.  Chaired by Skip Johnstone, MD, the Physician-Hospital Issues Committee reviewed policies on issues including hospital fair credentialing and third-party background checks.  Chaired by Dana Chambers, MD, the Communications & Membership Advisory Committee discussed membership recruitment initiatives and improvements to the NCMS Bulletin and social networking strategies.  On August 11, the Legislative Cabinet, chaired by Robert Monteiro, MD, convened at NCMS Headquarters to review the recently ended short legislative session and to prepare for the regular session, which begins in January.

There are a few hospitals in North Carolina that have ex-officio positions on their governing bodies for county commissioners. This is grounded in the historic (and in some cases, current) connections between those hospitals and local government. In Cumberland County, all county commissioners are ex-officio members of the governing body of Cape Fear Valley Health System. Recently, when a county commissioner resigned mid-term, the local party officials appointed a replacement commissioner.

The new commissioner is a lawyer who works at a plaintiffs’ firm that has represented numerous clients against the hospital and local physicians. Having a lawyer, who works at a medical malpractice plaintiffs’ firm involved in all of the health system’s credentialing, peer review, and quality management activities, caused grave concerns among the medical staff and hospital administration. We believe this is the first time a lawyer practicing in a medical malpractice plaintiffs’ firm has been placed on a hospital’s governing body.

The medical staff held an emergency meeting to address the issue. At that meeting, several actions were taken to ensure the obvious conflict of interest was properly addressed. Among them, the medical staff decided to retain counsel to ensure that any confidentiality agreements or conflict of interest policies formulated to address this situation provided adequate protection for the individual physicians on the medical staff. David Sousa, general counsel for Medical Mutual Insurance Company, and Stephen Keene, general counsel for the NC Medical Society, attended the medical staff meeting, as well. Mr. Sousa announced at the meeting that Medical Mutual would assist in indentifying counsel with appropriate expertise and cover the costs of the representation. Dan McLamb, of Yates McLamb & Weyher in Raleigh, was hired to represent the medical staff in the negotiations.

Ultimately the commissioner signed a confidentiality agreement and conflict of interest policy  that, among other things, requires the commissioner to recuse himself from all performance improvement, quality assessment, peer review and liability claims during his tenure. Earlier this week, the new commissioner lost in a four-way primary for the Democratic nomination for the commission seat.

The work done by the medical staff and their counsel provides excellent guidance to medical staffs that confront this issue in the future. The NCMS appreciates the leadership and prompt action of Medical Mutual Insurance Company to assist the medical staff with this issue.

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 In the April 2010 issue of Business North Carolina, writer Ed Martin offers a real-life story about the critical role physicians have in physician-hospital relations. Raleigh health-care attorney, Steve Shaber, a presenter at the  NCMS Medical Staff Boot Camp, is among those featured in the cover story, “Trauma Center: A power struggle between doctors and administrators embroils Mission Hospital — one of the best — and costs its CEO his job.”

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The North Carolina Medical Board (NCMB) is considering the adoption of a new policy regarding the practice of telemedicine.

The Board considered the draft proposal at their January meeting and the item was tabled to allow for further review by the NCMB’s Policy Committee.  The proposed policy on telemedicine will be revisited at the next committee meeting in March.  You can view the draft being considered here.

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The Centers for Medicare & Medicaid Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC) encourage public comment on two regulations published on December 30, 2009.

The proposed rule issued by CMS outlines provisions governing the EHR incentive programs, including defining the “meaningful use” of EHR technology. The rule also outlines the proposed payment methodologies for the Medicare and Medicaid EHR incentive programs.

An interim final regulation issued by ONC sets initial standards, implementation specifications, and certification criteria for EHR technology.  Under federal statute the interim final regulation will go into effect 30 days after publication, with an opportunity for public comment and agency refinement for 60 days following publication.

The CMS proposed rule and fact sheets may be viewed at http://www.cms.hhs.gov/Recovery/11_HealthIT.asp

ONC’s interim final rule may be viewed at http://healthit.hhs.gov/standardsandcertification.

In early 2010 the ONC intends to issue a notice of proposed rulemaking related to the certification of health information technology.

The Joint Commission has revised standard MS.01.01.01 with the help of a special task force. When the revised standard was first made available generally in March, 2009, the NCMS commented that:

“We believe it is crucial that physicians who are members of a medical staff understand their rights and obligations and are engaged in medical staff matters.  The proposed standard and related elements of performance advance this goal.  The proposed standard engages staff members more fully by requiring a heightened level of involvement for medical staff members in the approval and implementation of bylaws, rules and regulations, and policies.”

According to the Joint Commission, the American Hospital Association, American Medical Association, American College of Surgeons, American College of Physicians, American Dental Association, and other interested organizations believe this revised version appropriately articulates the elements of a productive relationship between a hospital and its medical staff.  It also allows as much flexibility as possible in how and where a hospital and its medical staff choose to articulate these responsibilities. Do you agree?  Review and Comment.

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The Model Medical Staff Bylaws provide approaches for medical staffs to consider when faced with the challenges of compliance with the many laws, regulations, and standards governing medical staff bylaws.

This document will only be available online through the Members-only section of the website and will also be accessible through the Physician Hospital Resource Area.  These Model Bylaws will be updated as laws, rules, standards, policies, etc. change, and we will alert members to substantive changes in the NCMS weekly Bulletin.

For more information on the Model Bylaws, contact Melanie Phelps, mphelps@ncmedsoc.org.

Click here to access the Model Bylaws now.

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The North Carolina State Health Coordinating Council (SHCC) met in Raleigh on Friday, October 9, 2009. At this meeting, the Council adopted the 2010 State Medical Facilities Plan, including approval of the Single Specialty Ambulatory Surgery Demonstration Project.  Details of this project can be found in Chapter 6 of the 2010 SMFP.

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In a well-run hospital, the medical staff understands and uses its sphere of control effectively, but if the medical staff misunderstands its role or neglects its powers, the hospital, patients and staff will suffer. How effective is your medical staff?

These and other questions will be answered at the 2009 Fall Conference Evening Session for Physicians: Empowering the Hospital’s Medical Staff, presented by the NCMS and the Buncombe County Medical Society (BCMS) on Thursday, November 19, 2009, 6:00 – 7:30 p.m. at the Biltmore Doubletree Hotel in Asheville.

Medical Staff Boot Camp is a balanced survey and analysis of the rights, duties and prerogatives of the organized medical staff at North Carolina hospitals. The program will cover organizational and operational issues and the balance of powers between organized staff, the hospital’s governing body, its administration and individual physicians. Vignettes drawn from real examples will be used to illustrate practical questions of communication among all the parties at the hospital and ways to implement improvements for the benefit of the patients, the hospital and the medical community. Topics also include staff rights and duties under state law, Joint Commission’s standards, Medicare conditions of participation, the Health Care Quality Improvement Act, and case law.

For more information and to register, go to:

https://www.bcmsonline.org/main/pp/ and click the “Calendar” tab, then view events for November 19.  If your local medical society or organization is interested in hosting the Medical Staff Boot Camp, please contact Melanie Phelps at 800-722-1350 or mphelps@ncmedsoc.org.

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On Wednesday, May 06, 2009, the Acute Care Services Committee of the State Health Coordinating Council unanimously approved the Single Specialty Ambulatory Surgery Demonstration Project proposal with some minor clarifications regarding call coverage and reporting.  The proposal will be presented to the full SHCC on May 27^th.  To be included in the 2010 draft State Medical Facilities Plan (SMFP), the proposal will need to be approved by the full SHCC at its May meeting.  A copy of the proposal, which calls for three demonstration sites, each with new separately licensed single specialty ambulatory surgical facilities with two operating rooms.  The proposal currently limits the demonstration sites to the three largest metropolitan areas in NC—Charlotte area, Triad, and the Triangle.  The proposal can be viewed at:  http://www.ncdhhs.gov/dhsr/mfp/pdf/2009/acs/0506_ssas.pdf.  If approved by the SHCC in May for inclusion in the draft 2010 SMFP, the demonstration project will be a subject of public hearings and comment over the summer.  Future editions of the Bulletin will provide timely status reports on the progress of this proposal.