bradley j. berg 206.447.8970 | [email protected] association of washington public hospital districts...

Bradley J. Berg206.447.8970 | [email protected]

Association of WashingtonPublic Hospital Districts

“Hot Topics for Public Hospital Districts”

Date: May 23, 2012

Sleeping Lady ResortLeavenworth, WA

AWPHD 2012 – Administrators Only/Hot Topics2

State Legislation

2ESSB 1571 (adopted in 2011) changes election dates

and filing requirements

For the primary election date (the first Tuesday in August),

election resolutions must be filed no later than the first Friday

immediately before the first day of the regular candidate filing

period (the Monday two weeks before Memorial Day). Prior to

the effective date of this statutory change, the filing deadline

was 84 days before the primary election date.


State Legislation

For the general election date (the first Tuesday after the first Monday in November), election resolutions must be filed no later than the primary election day. Prior to the effective date of this statutory change, the filing deadline was 84 days before the general election date.

For all other special election dates (the second Tuesday in February and, starting in 2013, the fourth Tuesday in April), the Legislature changed the election resolution filing deadline from 45 days to 46 days before the election date. Prior to 2013, the April special election date was the third Tuesday in April.


State Legislation

The remaining 2012 and the 2013 election dates and deadlines for filing the

election resolution are set forth below. Please Note: The county auditor is

required to mail ballots to each voter at least 18 days prior to an election

date.

ELECTION DATE RESOLUTION FILING DEADLINE

November 6, 2012 August 7, 2012

February 12, 2013 December 28, 2012

April 23, 2013 March 8, 2013

August 6, 2013 May 10, 2013

November 5, 2013 August 6, 2013


State Legislation

As a result of change in election dates and filing deadlines,

the deadline for filing the election resolution for the

November election is the day of the August primary.

Therefore, if a measure fails at the August primary, it will

not be possible to re-run the measure at the November

general election, unless some form of alternative election

resolution has been filed with the county auditor by the

August primary date.


State Legislation

SSB 5381 reduces voter approval requirement for “[t]he uninterrupted

continuation of a six-year or ten-year levy” to 50%; no voter turn-

out requirement

SB 5355 requires the posting on website of notices for special

meetings (unless certain exceptions apply) and posting at main

entrance and meeting location

HB 2582 requires provider-based clinics to provide special notices to

their patients; also requires that special financial reports be filed

with DOH


State Legislation

HB 2308 permits the awarding of attorney’s fees in peer review

litigation only if the non-prevailing party’s claims are frivolous or

the non-prevailing party fails to exhaust administrative remedies

SB 5978 establishes a state false claims act with respect to

Medicaid, including qui tam provisions


State Legislation

HB 2229 requires public reporting of executive compensation to

the state for nonprofit hospitals and public hospital districts

HB 2341 requires Section 501(c)(3) hospitals (including PHDs that

have obtained Section 501(c)(3) status) to post on their website

the community health needs assessment that they are required

to file with the IRS


Compliance with Section 501(r)

Organizations exempt under Section 501(c)(3), including PHDs that have obtained Section 501(c)(3) status, are required to:

Conduct a community needs assessment every three years

Adopt a financial assistance policy

Limit amount charged for ER or medically necessary care provided to patients who qualify under the financial assistance policy to amount charged to those who have insurance

Limit billing and collection practices for those who qualify for financial assistance


Termination of Section 501(c)(3) Status

The IRS has issued recent guidance that confirms that a PHD

may seek a determination letter from the IRS terminating its

Section 501(c)(3) status

In considering a termination, a PHDs must consider the

potential impact on any PHD retirement plans that may be

dependent on Section 501(c)(3) status


Tax-exempt Bonds

Change in use compliance issues arising from affiliations and other changes in use of bond financed property

Requested revisions to Revenue Procedure 97-13 to address new forms of payment

Increasing importance of adopting post-issuance compliance policies

Importance of complying with continuing disclosure requirements


State B&O Tax Cases

Washington Imaging Services LLC v. Department of Revenue,

171 Wn.2d 548 (2011), and St. Joseph General Hospital v.

Department of Revenue, Cause No. 394871, Washington Court

of Appeals (2011)

Both cases conclude that double B&O tax applies when one

party serves as billing agent of another party


State Auditor Issues

Challenged authority to engage in marketing activities, including

advertising and sponsorships to promote exercise, recreation

and/or general good health (versus advertising specific health

care services)

Challenged authority to support education and training

programs and facilities



Audits of self-insurance programs (medical, workers

compensation, liability, etc.) for compliance with Chapter 43.09

RCW and focused on:

Understanding the self-insurance programs, including internal

policies

Identifying which risks are insured and assessing whether they

are properly covered



Determining if third-party administrators are adequately

monitored

Determining if the program has been approved by the Local

Government Risk Pool Manager at the State Department of

Enterprise Services (formerly a part of the Office of Financial

Management)


Public Records Compliance

Neighborhood Alliance v. Spokane County, 172 Wn.2d 702 (2011)

Court held that public agencies are required to conduct an

“adequate search” to locate records in response to records

request

Court adopts FOIA “standards of reasonableness.” The focus is

on whether the search itself was adequate, not whether

responsive documents exist

A search must be “reasonably calculated to uncover all relevant

documents”


Changes to Medicare Conditions of Participation

CMS made several changes to the Hospital Conditions of

Participation and a few changes to the Critical Access Hospital

Conditions of Participation. These changes go into effect July 16,

2012 and are intended to help reduce the administrative burden on

hospitals. The following represents a summary of some of the

more significant changes:

Provisions Applicable to non-CAH Hospitals

One governing body may oversee multiple hospitals in a multi-

hospital system



A member or members of the hospital’s medical staff must be

included on the Hospital’s governing body. The medical staff

member of the board must be a voting member. This standard

does not apply when state law mandates how board members

are appointed; for example, commissioners of public hospital

districts.



The definition of “medical staff” has been broadened to allow

hospitals the flexibility to include other nonphysician

practitioners (such as advanced practice nurses, physician

assistants, etc.) as eligible candidates for medical staff

membership in accordance with state law.

Hospitals will now have the option of having either a stand-

alone nursing care plan or a single interdisciplinary care plan

that addresses nursing and other disciplines.



Patients may be allowed to self-administer drugs in the hospital

(both hospital-issued and the patient’s own drugs).

Drugs and biologicals may now be prepared and administered on

the orders of a practitioner other than a physician in accordance

with hospital policy and state law.

Hospitals may use written and electronic standing orders, order

sets and protocols approved by the medical staff, nursing staff,

and pharmacy. Orders and protocols must be based on nationally

recognized and evidence-based guidelines and recommendations.



Orders may be authenticated by another practitioner who is authorized to issue the orders and is part of the care team.

The requirement of authentication of verbal orders within 48 hours has been eliminated. Instead, CMS will defer to applicable state law to establish authentication time frames.

The previous temporary requirement, which specified that all orders, including verbal orders, must be dated, timed and authenticated by either the ordering practitioner or another practitioner who is responsible for the care of the patient and who is authorized to write orders by hospital policy in accordance with state law, is made permanent.



Drug administration errors, adverse drug reactions, and incompatibilities

must be immediately reported to the attending physician and, if

appropriate, to the hospital’s quality improvement program.

Hospitals are no longer required to notify CMS of a patient’s death when

a patient dies when no seclusion has been used and the only restraints

used on the patient were soft, non-rigid, cloth-like materials, which were

applied exclusively to the patient’s wrists. Reporting will also be

eliminated for patients who died within 24 hours of having been

removed from such restraints.



Hospitals will no longer be required to maintain an infection

control log and instead may choose how to best document

infection control issues.

Hospitals will also no longer be required to maintain a single

director of outpatient services position that oversees all

outpatient departments in the hospital.



Provisions Applicable to Critical Access Hospitals

Eliminates the requirement that certain services be provided only by employees and not through contractual arrangements with entities such as community physicians, laboratories, or radiology services thus allowing CAHs to partner with other providers so they can be more efficient, and at the same time ensure the safe and timely delivery of care to their patients. Governing body will remain responsible for such services.

Clarifies that CAHs are not required to provide surgical services.


Proposed Rules Increasing Medicaid Payment for Primary Care Physicians

Proposed rule implements the provisions of the PPACA that

require that Medicaid payment for primary physicians in CY

2013 and 2014 be at rates not less than the Medicare rates in

effect in those same calendar years

Applies to physicians practicing family medicine, general

internal medicine and pediatrics

Also applies to services paid through Medicaid managed care

plans


False Claims Act

The False Claims Act makes

it illegal to submit false or

fraudulent claims for

payment to the federal

government


False Claims Act (cont’d.)

Essential Elements to FCA:

1. a person or entity must “knowingly”

2. submit or cause to be submitted a “claim” for payment to the

U.S. Government

3. that is false or fraudulent


False Claims Act (cont’d.)

Returning Overpayments FCA now requires prompt refund of

overpayments Explicitly defines “overpayment” Must report and return overpayment

within 60 days Retaining an overpayment is defined as

an “obligation” under the FCA and failure to discharge an obligation violates the FCA


Returning Overpayments

Under proposed regulations, an overpayment is

“identified” when a person (i) has actual knowledge of

an overpayment or (ii) acts in reckless disregard or

deliberate ignorance of the overpayment

Proposed regulations propose a ten-year look back

period rather than three to four-year period typically

used


Penalties

Civil monetary penalties of

$5,500 to $11,000 per false

claim

Treble damages


Stark Self-Disclosure Protocol

PPACA mandated that CMS develop and implement a voluntary

self disclosure program for Stark violations

There have been 150 disclosures from 148 providers

Only seven cases have been settled to date

Settlements have ranged from $60 to $579,000

The public reports do not disclose the methodology used to

determine the settlement amounts


Stark Self-Disclosure Protocol

Most common violations include failure to comply with

exceptions for personal service arrangements, nonmonetary

compensation, rental of office space and recruitment

agreements

Particularly important to consider prior to affiliation discussions


Attacks Quality Improvement and Peer Review

Washington has one of the most comprehensive peer review and

quality improvement privileges in the country.

Every Washington hospital is required to maintain a coordinated

quality improvement program to improve the quality of health care

services rendered to patients and to identify and prevent malpractice.

Each hospital must establish a quality improvement committee with

the responsibility to review the services rendered in the hospital to

improve the quality of medical care provided to patients.


Attacks on Quality Improvement and Peer Review Protections

Immunity from liability for individuals who participate on the

committee or provide information to the committee in good faith.

Documents gathered by or for the committee are not subject to

discovery in any civil litigation, such as a malpractice case.

There are a few exceptions.

Similar protections for non-hospital health care entities that

establish a Coordinated Quality Improvement Program.


Attacks Quality Improvement and Peer Review

Washington law also grants immunity to participants and

privilege from discovery for activities of a regularly constituted

peer review committee.

Requires peer to peer complaint. For example, a complaint by a

physician against another physician. Not clear at this time if the

privilege would apply to a complaint by a nurse about a physician.

Information must be provided to regularly constituted committee.


Attacks on Quality Improvement and Peer Review

Traditionally, courts have not evaluated the content of any documents maintained by a quality improvement or peer review committee. Instead, they simply follow the statutory language to determine if the documents are in fact those of a quality improvement committee or regularly constituted peer review committee. When determining if a regularly constituted committee exists, the court will consider the standards and guidelines of The Joint Commission, the hospital’s bylaws and internal regulations and policies, and whether the committee’s function is one of current patient care or retrospective review.



More recently there have been concerted efforts by the plaintiff’s bar to weaken the scope of the privilege. Attacks have focused on the following: Privileges are to be read narrowly

It is the burden of the hospital or party asserting the privilege to prove every element of the privilege

Any failure to completely prove each element of the privilege has resulted in a refusal to protect the applicable documents and loss of any immunity for the conduct



Examples of successful attacks include:

Documents related to investigation by Chief of Staff and CEO of nurse allegations of substance abuse by physician were not privileged. Plaintiff successfully argued that the complaint did not qualify as “peer review” and despite information in medical staff bylaws, which authorized the investigation, there was not appropriate documentation to show that the investigation would ultimately be reported to the hospital’s quality improvement committee.

Information gathered by a Medical Staff credentialing committee was subject to discovery because the hospital did not prove that the credentialing committee ultimately reported to the hospital’s quality committee. All medical staff activities were instead reported through the MEC to the Board.



What can be done to help protect quality assurance documents

and maintain immunity from liability?

The biggest risk is disjointed internal documentation concerning

the reporting structure. For example, the medical staff

committees do not regularly report peer review or quality

improvement activities to the quality improvement committee.



Review your corporate bylaws, medical staff bylaws, quality improvement committee charter and charters of subcommittees to help ensure that there is a documentation trail that is easy for the courts to follow and that shows that any investigation is being conducted by a group or committee that has been specifically authorized by the quality improvement committee or one of its subcommittees to conduct the investigation.

Make sure that all medical staff quality and peer review activities are approved by and reported to the hospital’s quality improvement committee. This helps ensure that any quality activities that do not qualify as peer review are protected.



Have the quality improvement committee review an approve the

charters and activities of all of its sub committees, including

medical staff activities. Document the review in the quality

improvement committee minutes.

Ensure that reports to the quality improvement committee from

subcommittees are well documented in the quality improvement

committee minutes.


Contact Information

Brad Berg

Telephone: 206-447-8970

Email: [email protected]

Foster Pepper PLLC

1111 Third Avenue, Suite 3400

Seattle, WA 98101

www.foster.com