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hospitals (CAHs) and (2) a Medicare Regulatory Reform rule that identifies and eliminates duplicative, overlapping, outdated, and conflicting regulatory requirements for a host of healthcare providers and suppliers.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obsolete regulations, including outmoded infection control instructions for Ambulatory Surgical Centers (ASCs); outdated Medicaid qualification standards for physical and occupational therapists; and duplicative requirements for governing bodies of Organ Procurement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 at info@hawleytroxell.com or call 208.344.6000. 

As a reminder, Section 7 of the NLRA protects the rights of both union and non-union employees to engage in “concerted activities,” which includes discussions about wages, hours, or terms and conditions of employment. It also grants employees the rights to engage in concerted activities not only with each other, but with the public as well. Section 8 of the NLRA further provides that it is an unfair labor practice for employers “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in [S]ection 7.” An employer’s work rule may be found in violation of the NLRA if it is “reasonably construed” to restrict or prohibit Section 7 activity, even if the rule has never been enforced in such a way.

The Second Report details the GC’s interpretation of the NLRA as applied to 14 cases presenting emerging social media issues. This article focuses on the most common provisions used in social media policies:

Inclusion of a “Savings Clause”

In one case, the NLRB held that a “savings clause,” which provided that the policy would not interfere with the employees’ Section 7 rights, did not salvage an otherwise overly broad social media policy. Specifically, the NLRB determined that the savings clause was insufficient to cure the ambiguities in a rule that limited employee discussion of terms and conditions of employment to those conducted in an “appropriate” manner. The NLRB explained that an employee could not reasonably be expected to know that the savings clause, found elsewhere in the policy, encompassed discussions that the employer deemed “inappropriate.” As such, employers should not assume that a general disclaimer is enough to ensure legal compliance with the NLRA. Until the NLRB provides further guidance, it is advisable to use multiple and specific savings clauses throughout a social media policy.

In a second case, the NLRB held that a social media policy containing the following provisions was overbroad:

• Restricting Employee Disclosure of Confidential Information – The policy prohibited employees from disclosing confidential, sensitive, or non-public information about the employer on or through employer property to a third-party without prior approval. The NLRB found that employees might reasonably interpret the employer’s policy as prohibiting discussion of Section 7 issues with third-parties, which was unlawful. It was irrelevant that the policy only prohibited communications made on or through employer property, as Section 7 gives employees the right to engage in protected activities on the employer’s premises during non-work time and in non-work areas. Nevertheless, in a separate case involving an employer operating a national drugstore chain, the NLRB upheld a policy prohibiting employees from disclosing confidential and/or proprietary information acquired in the course of employment. Important to the NLRB’s decision was that the employer sells pharmaceuticals and the rule contained several references to customers, patients and health information. Accordingly, the NLRB found that employees would reasonably understand that the rule was intended to uphold the customers’ privacy interests and not restrict Section 7 activity.

• Requiring Employer Approval Before Employee Publishes Any Representation About Employer – The policy required employees to obtain prior employer approval before publishing any representation about the employer, including statements to the media, media advertisements, electronic bulletin boards, blogs, and voicemail. The NLRB held that the policy was in violation of the NLRA, as Section 7 protects employee communications to the public that are related to an ongoing labor dispute, including statements to the media. Further, because the policy prohibited all public statements about the employer, it restricted Section 7 communications among employees and was overbroad.

• Requiring Employee Communications About Employer Are Conducted in a “Professional” and “Appropriate” Manner – The policy required that social networking site communications be conducted in a professional and appropriate manner. The NLRB found this provision to be overly broad as employees would reasonably construe broad terms such as “professional” and “appropriate” as prohibiting them from communicating with other employees or third-parties about protected concerns.

• Restricting Employee Use of Employer’s Name, Logos or Trademarks – The policy also prohibited the use of the employer’s name or service marks outside the course of business without prior approval. The NLRB explained that although an employer has a proprietary interest in its service marks and trademarked or copyrighted name, an employee’s noncommercial use of a name, logo, or other trademark to identify the employer in connection with Section 7 activity does not infringe on the employer’s interest. Because an employee could reasonably construe this provision to restrict Section 7 activity, the NLRB held that the provision was overbroad.

• Requiring Employer Approval Before Employees Identify Their Employment – The policy required prior approval before employees could identify themselves as the employer’s employees, and mandated that employees expressly state that their comments were their personal opinions and not necessarily those of the employer. The NLRB found this rule harmful to Section 7 rights because personal profile pages serve an important role in enabling employees to both identify and communicate with one another. The NLRB determined that requiring employees to expressly state that their comments are their own personal opinions every time they post on social media would significantly burden the exercise of Section 7 rights. In a separate case, however, the NLRB upheld a similar rule requiring employees to indicate that their views were their own and not those of the employer because the provision specifically referred to Federal Trade Commission (FTC) regulations governing endorsements and testimonials about products and services. 16 C.F.R. § 255.5 requires that when there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement, such as employment, the connection must be fully disclosed. The FTC has announced that it is not inclined to bring action against an employer for a single rogue employee who provides an endorsement or testimonial about an employer’s product or service without identifying his or her employee status if the employer’s policy adequately covers the conduct in question. Thus, to satisfy the FTC, the employer should include a rule in its social medial policy requiring employees to identify themselves when providing endorsements or testimonials about the employer’s products or services, and to satisfy the NLRB, the language must be specifically linked to FTC regulations and should not restrict Section 7 activity.

• Requiring That Employees First Discuss Work-Related Concerns With Management – The policy required that employees first discuss work-related concerns with management before posting communications about the employer, and that failure to do so could result in discipline up to termination. The NLRB held that a rule requiring employees to first approach management with work-related concerns on threat of discipline restricts Section 7 activity.

Prohibiting Employees From Making Disparaging Comments About Employer

In a third case, the employer’s social media policy prohibited employees from “[m]aking disparaging comments about the [employer] through any media, including online blogs, other electronic media, or through the media.” The NLRB held that the policy was unlawful because an employee might reasonably construe the rule to restrict Section 7 activity, including comments that the employer was not treating employees fairly or paying them sufficiently. The NLRB commented that the use of specific disclaimer language could have saved this policy.

In a separate case, the NLRB upheld a policy prohibiting the use of social media to make comments about supervisors, coworkers, or the employer that are vulgar, obscene, threatening, intimidating, harassing, or in violation of the employer’s workplace discrimination policies. Thus, antidisparagement provisions may be upheld if they are linked to the employer’s antidiscrimination policies and/or state and federal equal rights laws.

As the law is constantly evolving in the area of employer regulation of social media, employers are advised to stay apprised of recent NLRB developments and regularly review their social media policies to ensure legal compliance. If you would like us to review your social media policy, or if your business does not currently have a social media policy and you would like us to assist in drafting one, please call 208.344.6000 or email corporate@hawleytroxell.com.

As a member of Hawley Troxell’s Public Finance Group, Pantera’s practice includes bonds, banking, public finance, municipal law, and securities. She has worked with the public finance team in all areas, including representation of various entities as bond counsel, underwriter’s counsel, and disclosure counsel for public and private tax-exempt financings (such as financings for school districts, municipalities, and special purpose districts).

Pantera is a member of the National Association of Bond Lawyers, serves on the City Club of Boise Board of Directors and Executive Board, and also serves on the Board of Directors for Idaho Women Lawyers. She was also honored as Tribute to Women and Industry (TWIN) recipient this year by the Women’s and Children’s Alliance (WCA). In addition, she volunteers as a mentor to a refugee family through the Girls to Women program recently started by the International Rescue Committee.

Steven Berenter, managing partner of Hawley Troxell, stated, “We have been honored to have two such admirable and hardworking individuals practicing here, and are thrilled that they have received this honorable recognition.”

The Accomplished Under 40 magazine will be published in the June 15 issue of Idaho Business Review. There will also be an awards ceremony and dinner held to honor recipients on Thursday, June 14 at Zoo Boise. To learn more about this event click here.

After law school, Crane was a law clerk for UC Hastings Office of the General Counsel and Vaught & Conner, PLLC in Oklahoma City, OK. He also served as a legal extern for the United States Department of Labor, Office of Administrative Law Judges. Crane graduated with a B.A. from Princeton University. Prior to law school, he worked as a paralegal for three years at Ropes & Gray, LLP in Boston, MA. In his free time, Crane enjoys running, football, soccer, snowboarding, rock climbing, and American history.

When asked what led him to write a thriller, Frazer explained, “I have always read and been interested in fast-paced narrative fiction. Being an attorney has fostered that interest, as the practice of law and writing for judges and juries also lends itself to fast-paced prose.”

The Cure is currently available for purchase in e-book format on Kindle, iPad, and Nook. Click here for more information or to purchase the novel. Frazer plans to write more novels and is currently working on two new drafts – another thriller and a novel that is more contemplative and character driven.

Lynn graduated from San Francisco State University with a B.A. in Art and minor in Psychology. She is actively involved in the community and currently serves as the Vice Chair of the Board of Commissioners for the Nampa Housing Authority and Treasurer of the Society of Human Resource Management (SHRM) State Council of Idaho.

“Lynn is a great addition to our management team,” said Executive Director Susan Olson. “We’re excited to have her aboard and know that her extensive knowledge and expertise in human resources will be an asset to our firm, attorneys, and staff.”

Owners of small local businesses often look to family and friends for capital for startup costs and initial operational needs, inadvertently violating Idaho securities laws in the process. The Idaho Uniform Securities Act (Securities Act) mandates that the offer and sale of securities – which include corporate stock, limited liability membership interests, and unsecured promissory notes – as well as persons involved in the offer and sale of those securities be registered with the DOF unless the statutory requirements of an exemption from registration requirements are satisfied. Most of these exemptions prohibit general advertising of the offering and limit the number of small, unsophisticated investors.

The exemption is available for offerings to an unlimited number of investors if the following requirements are satisfied:

• The issuer is an organization formed under Idaho law and registered with the Idaho Secretary of State. Sole proprietorships and general partnerships are not eligible for the exemption.
• The proceeds of the sale of the securities (in reliance upon this exemption), together with the proceeds of the sale of securities during the twelve months before the offering, must not exceed $2,000,000.
• The offering of the issuer’s securities must be made only to Idaho residents in compliance with the requirements of the federal exemption for intrastate offerings in Section 3(a)(11) of the Securities Act of 1933 and SEC Rule 147.
• The maximum allowable investment by any single unaccredited investor is limited to $2,500. The maximum allowable investment by any single investor, whether accredited or unaccredited, must not exceed ten percent (10%) of the investor’s liquid net worth.
• No commission or other remuneration may be paid, directly or indirectly, to any person for participation in the offer or sale of the securities unless the person is registered with the Idaho Department of Finance as a broker-dealer or agent under the Securities Act.
• Neither the issuer nor any of its organizers or other affiliates are subject to disqualification under the “bad boy” provisions of certain state and federal rules.
• Before general solicitation or the first sale of securities, the issuer must notify the Department of its intent to rely on this exemption and request an exemption order by the Director. The notice must include contact information for the issuer and any salespersons.
• The issuer must have a business plan and must submit copies of advertising materials and an offering memorandum to the Department for disclosure review. The offering memorandum must include the usual disclosures, including a balance sheet and income statement prepared in accordance with Generally Accepted Accounting Principles (GAAP), information about the issuer, its governance, its business plan, use of proceeds, description of the offered securities, risk factors, and the requirements of the SEC Rule 147 exemption. In addition, the offering memorandum must inform all investors that the issuer’s securities have not been registered under the federal or Idaho Securities Acts and therefore cannot be resold unless the securities are registered or qualify for an exemption from registration.
• The investment funds must be deposited in an escrow account with a bank or other depository institution authorized to transact business in Idaho until the amount of the escrowed funds reaches the minimum offering amount necessary to allow the issuer to meaningfully advance its business plan. The issuer must use the proceeds of the offering only in accordance with the representations made to investors in the offering memorandum.

These requirements are intended to protect investors, while permitting general advertising to expand the pool of potential investors. Although designed to enable small businesses to appeal to local investors, the exemption can also be used in broader-based offerings to angel investors and other accredited investors.

If you would like more information about this topic, or other legal issues, please contact us at 208.344.6000 or email corporate@hawleytroxell.com.