Insight CMS Change to Hospital Conditions of Participation Requires Medical Staff Membership on Hospital Boards

On May 10, 2012, the Center of Medicare and Medicaid Services (CMS) issued two final rules that, according to CMS, will have the effect of “modifying, removing, or streamlining current regulations that the agency has identified as “excessively burdensome.” In a health care world of ever increasing regulation, that’s certainly a breath of fresh air.

According to CMS, the purpose of this streamlining effort is to help work towards achieving President Obama’s directive to reduce unnecessary burdens on business and save approximately $1.1 billion across the healthcare system in the first year and more than $5 billion over five years. See Executive Order No. 13563, January 2011.

CMS’s new final rules include: (1) a rule that updates the Medicare CoP for hospitals and critical access hospitals (CAHs) and (2) a Medicare Regulatory Reform rule that identifies and eliminates duplicative, overlapping, outdated, and conflicting regulatory requirements for a host of healthcare providers and suppliers.

CMS’s May 10 fact sheet (found here) states that the CoP Rule is intended to reduce regulatory burden by:

• Requiring that all eligible candidates, including APRNs and PAs, must be reviewed by the medical staff for potential appointment to the hospital medical staff and then allowing for the granting of all the privileges, rights, and responsibilities accorded to appointed medical staff members.
• Supporting and encouraging patient-centered care, through such changes such as allowing a patient or his or her caregiver/support person to administer certain medications (both those brought from the patient’s home and those dispensed by the hospital), and by allowing hospitals to use a single, interdisciplinary care plan that supports coordination of care through nursing services.
• Encouraging the use of evidence-based pre-printed and electronic standing orders, order sets, and protocols that ensure the consistency and quality of care provided to all patients by allowing nurses the ability to implement orders that are timely and clear.
• Allowing hospitals to determine the best ways to oversee and manage outpatients by removing the unnecessary requirement for a single Director of Outpatient Services.
• Increasing flexibility for hospitals by allowing one governing body to oversee multiple hospitals in a single health system.
• 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.

Again, according to CMS, the Medicare Regulatory Reform Rule works towards:

• Eliminating obsolete regulations, including outmoded infection control instructions for Ambulatory Surgical Centers (ASCs); outdated Medicaid qualification standards for physical and occupational therapists; and duplicative requirements for governing bodies of Organ Procurement Organizations.
• Requiring only higher risk End Stage Renal Disease (ESRD) facilities to comply with the full National Fire Protection Agency Life Safety Code requirements. CMS estimates that this burden reduction could save an estimated $108.7 million for ESRD providers.
• Eliminating the specific list of emergency equipment ASCs must have in the facility, and allowing facilities, in conjunction with medical staff and their governing bodies, to develop policies and procedures that specify emergency equipment appropriate to the services they provide.
• Replacing inflexible time-limited agreements with open-ended agreements for Medicaid-participating Intermediate Care Facilities that serve people with intellectual disabilities. The regulation also implements a recommendation from stakeholders to replace the term “mental retardation” with “intellectual disability,” which is the same change that Congress has made to most of the federal law’s references to the term.
• Updating e-prescribing technical requirements so Medicare Prescription Drug Plans meet current standards.

One new requirement for many of Idaho’s hospitals is that, under the new CMS rule modifying the applicable Conditions of Participation (CoP) for hospitals, that each hospital’s board must include a member of the hospital’s organized medical staff.

In Idaho, the bylaws of many hospital boards do not require that a member of the medical staff serve on the board. Conflicts of interest, the burden of board service on the chief of staff’s already-busy schedule, and other factors have motivated hospital boards to move away from physician membership on the board. Instead, hospital boards may receive regular reports from the chief of staff on issues relating to the medical staff.

Buried within the new CoP Rule, and excluded from CMS summary of these changes, is language by which CMS makes clear that physician membership on the board is no longer optional. Because the new rule now requires only one board for a multi-hospital system (instead of a board for each hospital in the system), CMS thinks it is appropriate to now mandate physician membership on hospital boards. According to CMS, “adding the requirement for hospitals to have a medical staff member on the governing body will build in an important element of continuity and ensure regular communications between a hospital’s governing body and its medical staff(s), particularly in light of our decision to permit a single governing body for hospitals in multi-hospital systems.” In addition, CMS believes that “requiring a hospital’s governing body to include a medical staff member will directly address a widely voiced concern for stronger communication between a hospital governing body and the medical staffs of its member hospitals.”

There you have it. Idaho hospitals that do not already have a physician board member will now need to review and revise their board bylaws to comply with this new requirement.

If you have questions about these or other legal issues, please contact a member of our Health Law group or call 208.344.6000.