credentialing, corrective action, and npdb reporting

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Credentialing, Corrective Action, and NPDB Reporting

Kim C. Stanger(9-13)

Preliminaries

This is an overview of general standards. State laws or cases may impose additional or different

standards.– Check your particular state’s laws!

Application may vary depending on:Application may vary depending on:– Type of hospital or other facility (e.g., public or private)– Type of practitioner– Your bylaws, rules or regulations– Practitioner contracts

This does not constitute the giving of legal advice. This does not create an attorney-client relationship.

Written Materials

Written Materials– 42 CFR 482.12 and .22– Health Care Quality Improvement Act, 42 USC 11101 et

seq.– Sample Credentialing ChecklistSample Credentialing Checklist– NPDB Guidebook

The program will be recorded and available for download at www.hhhealthlawblog.com.

For questions, please use “chat” feature or send me e-mail at [email protected].

Copyright © 2013, Holland & Hart LLP Kim C. Stanger 208-383-3913 [email protected] www.hollandhart.com www.hhhealthlawblog.com

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Credentialing

Who must be credentialed?

Who is subject to credentialing?

All independent practitioners, i.e., those who are licensed to practice independently.– Physicians, podiatrists, dentists– Allied health practitioners (“AHPs”) Advance practice nursesp Nurse practitioners Physician assistants Psychologists Therapists

“Credentialing” may not apply to others (e.g., nurses, techs, etc.), but must ensure they are qualified.


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What does credentialing address?

Medical staff membership = right and responsibility to participate in medical staff benefits and obligations.– Initial appointment.– Reappointment.

Privileges = license to use facility resources and providePrivileges license to use facility resources and provide specified clinical services at facility based on:– Applicant’s education, training, experience and

competence.– Facility’s capability to support the requested privileges

with proper equipment, personnel, capacity, etc.

Why credentialing?

Why credentialing?


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Michael Swango, M.D.

In 2000, plead guilty to murdering 3 patients by poisoning them while a hospital physician. He is suspected of administering lethal injections to 35-60 patients.

If hospital had done its job, it would have learned:– Medical school wrote warning letter.– Numerous deaths occurred during his roundsNumerous deaths occurred during his rounds.– Convicted and imprisoned for 2 years for poisoning

coworkers.– Plead guilty to fraud in applications to government hospitals.– Ohio revoked his medical license.– Dismissed from programs and rejected by hospitals.– Featured on 20/20 and America’s Most Wanted.

See Stewart, Blind Eye: How the Medical Establishment Let a Doctor Get Away with Murder

Why credentialing?

Proper credentialing = preventive medicine– Promotes quality health care.– Avoids problem practitioners. Incompetent.Disruptive.Disruptive.Poor fit for organization.

– Facilitates a professional workplace.– Prevents liability to patients, practitioners,

employees, and the government.

Effective Credentialing

Liability to Practitioner Due process violation Breach of contract Emotional distress Discrimination

Quality Care

Quality Workplace

Discrimination Defamation Antitrust

Liability to Patient Malpractice Respondeat superior Negligent credentialing


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Credentialing:Liability to Patient• Liable to patient if breach standard of care.

• Statutes and regulations• Accreditation standards• Common law community standard

• To minimize liability to patient:To minimize liability to patient:• Qualify for immunity, if available• Conduct proper credentialing

• Initial medical staff appointment and privileges• Biannual re-credentialing• Ongoing peer review• Corrective action when needed

Credentialing:Liability to Practitioner Courts usually do not second guess hospital’s decision

if:– Followed standards in bylaws and statutes.– Based on legitimate, documented reasons Patient care or hospital operationsp p NOT arbitrary or capricious NOT improper motive, e.g., discrimination, anti-

competition, retaliation, etc. From legal liability standpoint, the process is more

important than the decision.

Credentialing Decisions

Ensure your credentialing decisions: Are based on documented, legitimate reasons.

– Not unreasonable, arbitrary, capricious or discriminatory.

Are consistent with the process and standards in applicable statutes, bylaws, rules and regulations, and accreditation requirements.


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Credentialing Standards

Credentialing:Governing Standards• Statutes and regulations

• Constitution, e.g., due process• State statutes and regulations• Medicare COPs, 42 CFR 482.12, -.22• Health Care Quality Improvement Act, 42 USCHealth Care Quality Improvement Act, 42 USC

11101• Medical staff bylaws, rules and regulations• Practitioner contracts• Accreditation standards• Common law, e.g., standard in community to avoid

negligent credentialing claim

Credentialing:General Standards

• Physician does not have a constitutional right to privileges at a public hospital. Hayman v. Galveston, 273 U.S. 414 (1927).

• Hospital cannot exclude for illegal purpose, e.g., discrimination anti competitive reason etcdiscrimination, anti-competitive reason, etc.

• Hospital must establish rules, standards or qualifications for medical staff membership. • State statutes• Accreditation standards

• Hospital must provide due process.


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Credentialing:Substantive Standards

Credentialing decisions may be based on: Current licensure Education, experience, competence, and judgment Physical and mental capability

Beware potential ADA implications– Beware potential ADA implications Character and professionalism Hospital capacity and capabilities

– Availability of equipment and qualified support staff Geographic proximity Ability to satisfy medical staff responsibilities Any other reasonable, non-discriminatory basis


Credentialing decisions should NOT be based on: Licensure or membership alone

– 42 CFR 482.12 Credentialing done by other entitiesg y

– Exception: telemedicine as discussed below.


What about economic or business reasons? Exclusive contracts Closed staff arrangements Competitors on medical staff

Most courts have upheld if legitimate and consistent with bylaws.p

Utilization (i.e., “economic credentialing”)– OIG has expressed fraud and abuse concerns

* Check your bylaws and case law

y


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Credentialing:Process

Credentialing:ProcessProcess usually set out in medical staff bylaws and policies. Application

– Gather information– Verify information– Databank searches

Active medical staff review

Administration (e.g., Medical Staff Services)

Active medical staff review– Review file– Interview physician– Recommendation to Board– Fair hearing process, if required

Board review and decision

* Process may vary for physicians v. allied health professionals.

Credentialing:Process Consider 2-step process

– Screening for basic eligibility requirements (e.g., education, licensure, geographic proximity). Reviewed by medical staff office. Application denied summarily if fail to meet basic

bj ti lifi tiobjective qualifications.– Review for competence and capability. Reviewed by medical staff. Only applies if satisfied basic qualifications.

Benefits– May weed out ineligible applicants.– May avoid fair hearing process and NPDB reports.


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See sample credentialing checklist. Make sure it complies with bylaws and state law

before using.


Put burden on applicant to produce relevant and required info and documents.– You should not be required to chase down info.– Notify applicant of deficiencies, e.g., missing info or

incomplete answers.p– Notify applicant that you cannot process application until

completed application is submitted. Confirm that misrepresentations in application are basis for

automatic denial.


Ensure databanks are queried.– National Practitioners Data Bank Hospital charged with knowledge of info in NPDB. Print and retain report.

List of Excluded Individuals and Entities– List of Excluded Individuals and Entities Cannot contract with excluded provider. Cannot bill for services ordered by excluded provider.

– Federation of State Medical Boards (FSMB)– State professional boards Some states require certain queries.


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Credentialing:ProcessBeware red flags References indicate problems Discrepancies in info submitted Privileges requested vary from usual requests. Unexplained gaps in timeUnexplained gaps in time Loss or reduction in privileges, licensure, program

participation, etc. Prior disciplinary actions Three or more malpractice claims in last five years Numerous jobs or affiliations in last five years More than five licenses across United States Unexplained refusal to disclose info


Remember: where there’s smoke, there’s usually fire…

Credentialing:ProcessFollowing review, medical staff may: Require additional information, examination, or review. Recommend that membership and specified privileges be

granted. Recommend that membership and/or privileges be denied, p p g ,

limited, or conditioned.– Usually triggers fair hearing process under bylaws.

• Check bylaws requirements.


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Credentialing:Process Upon receipt of medical staff recommendation, Board may

– Accept recommendation.– Reject recommendation.– Send back for more action.– Take its own action, e.g., impose conditions., g , p

Board should review medical staff recommendation:– Appropriate process was followed consistent with

statutes, bylaws, rules and regulations.– Decision is reasonable, not arbitrary or capricious.– Decision was based on legitimate considerations, not

illegal considerations. Board is not required to be medical experts.

Credentialing:Privileges

Board must determine privileges. “Laundry list”

– Contains list of clinical procedures available at hospital.– Works well for small hospitals with limited procedures.– Requires regular updating regarding physician andRequires regular updating regarding physician and

procedures. “Core privileging”

– Identifies “core” qualifications to work in department.– Identifies privileges associated with the department.– Allows for additional privileges.

Ensure your facility has capability to support privileges.

Credentialing:Telemedicine Privileges Hospital and CAH CoPs now allow hospital to rely on

credentialing done by remote hospital/entity if:– Have written agreement with distant site.– Distant site complies with CoP standards.– Practitioner privileged at distant site.

P titi li d i t t h i id d– Practitioner licensed in state where services provided.– Hospital reviews practitioner’s performance and

provides results to distant site.(42 CFR 482.12 and .22, and 485.616 and .635)• Confirm it is allowed by bylaws and state licensing statutes.• Confirm it does not trigger fair hearing rights.• Consider exposure to negligent credentialing claim.


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Credentialing: Emergency or Temporary Privileges In limited circumstances, hospital may grant privileges on

emergency or temporary basis, e.g., – Practitioner needed but no time for full process.– Privileges temporarily granted while formal application

processed. Subject to expedited review. Automatically expires within limited time period, e.g., 60

days.

• Be very careful and use sparingly.• Ensure bylaws allow for same.

Credentialing:Reappointment

Usually must occur at least every 2 years. Process similar to initial appointment.

– Application– Review by active staffy– Governing body determination

Process should be stated in bylaws, rules or regulations.

Peer Review


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Peer Review

• Good idea, but…• Time consuming• Poor documentation• Rotating, untrained volunteers• Perception that it is punitivep p• Limited availability of specialists or “peers”• Discomfort with critiquing a colleague• Possible conflict of interest• Fear of discovery or retribution• “There but for the grace of God go I…”

Peer Review

• The goal… • Identify problems.• Help practitioner

correct problems before adverse outcome.

• NOT to punish.

Peer Review:Suggestions• Require participation in bylaws• Maintain peer review privilege• Educate medical staff regarding purpose, importance,

process, and protections• Define good care in advanceg• Share credible data routinely• Talk to each other• Don’t postpone action or reviews• Appoint official to be responsible

• Coordinate protocol development• Receive / triage concerns


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Peer Review:Suggestions

• Avoid layers of committees that duplicate or delay work• Ensure peer review committee meets monthly• Ensure cases and replies are distributed, reviewed and

addressed in a timely fashion• Give the practitioner a chance to respondGive the practitioner a chance to respond• Review the matter after the practitioner has provided input• Use “peers”• Avoid using competitors• Conduct reviews in non-accusatory, professional format• …And maintain peer review privilege.

Peer Review:Triggers

• Sentinel events• Complaints from patients, medical staff, or facility

staff• Malpractice suits• Investigations by other entities• Investigations by other entities• Risk management reports• Incident or variance reports• “Fall out” from indicators• Failure to follow protocols

Corrective Action


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Corrective Action

• Organization has right to ensure effective operations.• Organization has duty to protect patients and employees.• Medical staff responsible for medical care, professional

practices, and ethical conduct of members. (42 CFR 482.12)• Clinical concerns• Clinical concerns• Ethical concerns• Behavioral concerns (e.g, disruptive conduct)• Compliance (e.g., laws, bylaws, rules, regulations)• Licensure, credentials, program participation

Corrective Action:The Conundrum

• Fail to act—may be liable to patient, employees, or regulators, e.g., • Malpractice

• Act improperly—may be liable to practitioner, e.g.,• Breach of contract• No due processp

• Negligent credentialing• Negligent supervision• Harassment• Regulatory violation

No due process• Antitrust• Discrimination• Defamation• Interference with contract

or business• Emotional distress

Corrective Action: The Good News

• Courts usually do not second guess the hospital’s corrective action if:• Decision based on appropriate factors.

• Valid patient care or business reason, not discrimination, retaliation, or unfair competition.

• Not arbitrary and capricious.• Practitioner given process required by contract, bylaws,

or laws.* Remember: from legal liability perspective, the process is

usually more important than the result.


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Corrective Action

Make sure action is consistent with:• Practitioner’s contract, if any• Bylaws, policies, and procedures• Statutes and regulations• Constitutional due process, if public entity• Health Care Quality Improvement Act (HCQIA), if

action involves physicians

Automatic Action, e.g., Termination or Suspension• Specify grounds in the bylaws and contracts, e.g.,

• Loss of licensure or DEA number• Loss of liability insurance• Exclusion from Medicare/Medicaid• Conviction of felony or health care fraud• Failure to complete medical records• Termination of exclusive contract• Adverse action by other facility?

• Specify process in bylaws• Identify entity who can terminate or suspend• Do not require full hearing process?

• Coordinate with contracts

Corrective Action:Informal Response• Facts may warrant informal response, e.g.,

• Physician interview• Oral or written reprimand and warning• Chart review or proctoring• Counseling and treatment• Education and training• Voluntary remediation agreements

• Ensure bylaws do not require progressive discipline.• Informal response probably not reportable to NPDB

because no action taken against privileges.


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Corrective Action:Informal Response• Document actions and response in physician’s peer

review file.• Complaints.• Discussions with physician.• Actions taken.

Ch t i d• Charts reviewed.• Voluntary remediation agreements.

• Documentation protects organization.• Protects organization from liability to patients.• Supports formal corrective action if necessary.

Corrective Action:Investigation• Facts may require formal investigation.

• Define “investigation” in bylaw, rules or regulations.• “Investigation” may trigger NPDB reporting.

• Consider notifying physician of investigation.• Avoid identifying complainantsAvoid identifying complainants.• Warn against retaliation or improper contact.

• If complaint involves serious allegations or difficult physician, consider involving attorney to ensure compliance with applicable standards.

Corrective Action:Investigation• Appoint investigating entity.

• Specify process in bylaws, rules, and regulations.• Use fair and balanced professionals.• Use peers (i.e., qualified physicians in same or similar

specialty) if possible.A id i tit ith fli t• Avoid using competitors or persons with conflict.

• Avoid using anyone who may be needed to serve on a hearing panel if it goes that far.

• Consider using outside reviewers, e.g., peer review network.


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Corrective Action:Investigation• Educate participants in investigation

• Scope of investigation.• Relevant substantive standards that apply to

misconduct and investigation.• Procedures found in bylaws, rules and regulations.

St d d f j di i l i• Standards for judicial review.• Statutory immunity if act in good faith

• HCQIA• Volunteer Protection Act• Tort Claims Act

• Importance of maintaining confidentiality.

Corrective Action:Investigation• Conduct fair investigation.

• HCQIA: entity must make “a reasonable effort to obtain the facts of the matter.”

• Review documents• Interview witnesses

C lt t• Consult experts• Scope depends on seriousness of charges.

• Investigator should be careful not to unilaterally expand scope of investigation.

• If new matters are discovered, report back to appointing entity for action.

• Organization will be judged by investigative record.

Corrective Action:Investigation• Document legitimate actions, considerations, and

conclusions in a written report to MEC.• Will help ensure a well-reasoned conclusion.• Will support HCQIA immunity.• Will support decision on judicial review.

A th t t ill b di bl• Assume that report will be discoverable, e.g., • To physician in proceeding• To Board of Medicine• To court in trial

• Beware improper considerations or motivations.• Consider having legal counsel review before finalized.


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Corrective Action:Recommendation• Determine recommendation to governing body.

• If recommend outcome favorable to practitioner, make recommendation to board.

• If recommend adverse action that would trigger hearing rights,

• Notify practitioner of right to request hearing per• Notify practitioner of right to request hearing per bylaws, rules and regulations, if applicable.

• Alert board, but do not make recommendation to board.

• Implement fair hearing process, if applicable. (More to come…)

Corrective Action:Board Decision

• Board receives recommendation from MEC• Board can

• Follow recommendation• Reject recommendation• Return to medical staff or further action.

• Notify physician• Follow any appeal procedure found in bylaws.

Corrective Action:Summary Suspension• Appropriate where there is:

• “Imminent danger to the health of any individual” (see HCQIA).

• Need to remove practitioner.• Subject to subsequent notice and hearing.

F ll b l l d l ti if ibl i l di• Follow bylaws, rules and regulations if possible, including.• Standards for summary suspension.• Entity that can invoke summary suspension, e.g.,

administrator, chief of staff, etc.• NPDB reporting applies if suspension longer than 30

days.


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Corrective Action:Summary Suspension• Notice of suspension.

• To subject practitioner.• To medical executive committee, chief of staff,

administrator.• Others who need to know to ensure practitionerp

complies.• Arrange transfer care of patients to other practitioners.

• Consider patient wishes.• Beware defamation issues.

Fair Hearing Process



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Generally must give due process (fair hearing) if deny or reduce privileges based on practitioner’s professional conduct that may adversely affect patient care.– State law– Bylaws, regulations and rulesy , g– Accreditation standards

Process that is “due” depends on circumstances.– Bylaws, rules and regulations– Type of practitioners involved– Severity of action– Basis for action, e.g., patient care– Contract requirements


• Full fair hearing process• Physicians• Denial or termination of privileges• Related to patient care concerns

* Check bylaws and contract

• Chance to complain• Allied health practitioners• Temporary or limited restriction of privileges• Unrelated to patient care

Health Care Quality Improvement Act (“HCQIA”) (42 USC 11101)

HCQIA provides immunity for most claims arising from credentialing action if the action is taken:– In reasonable belief that action furthered quality care,– After reasonable effort to obtain facts,– After adequate notice and hearing procedures, and

In reasonable belief that action warranted by the facts– In reasonable belief that action warranted by the facts. Hospital presumed to have complied; physician must rebut. Hospital process is deemed to be fair if:

– Proper notice given– Hearing before a fair-minded officer or panel– Physician has right to present evidence– Physician receives written recommendation


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Laurino v. Syringa General(Idaho 2005)• Facts: Physician with provisional staff membership

denied privileges following fair hearing process involving independent hearing officer.

• Claims: Physician sued hospital, trustees, and chief of staff for $2,000,000.• Breach of contractBreach of contract• Violation of due process• Intentional infliction of emotional distress• Intentional interference with contract• Antitrust• Defamation• Injunction

Laurino v. Syringa General(Idaho 2005)• Held: Court dismissed all claims on summary

judgment.• HCQIA barred all claims except violation of due

process.• Hospital’s hearing satisfied due process.

$• Hospital awarded $120,000 in attorneys fees.* Moral: document legitimate reasons and fair

hearing process.

Credentialing Protections


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Credentialing:Protections and Defenses

• Court deference to peer reviewers• Health Care Quality Improvement Act• State Peer Review Statutes

• Confidentiality• Immunity• Immunity

• Federal Volunteer Protection Act• Release provisions in bylaws and application

forms• Directors and officers insurance• Corporate indemnification policy

Credentialing:Protections and Defenses

• Chances are, you’ll be protected if you—• Document:

• Good faith investigation• Legitimate basis for decision• Comply with process set forth in bylaws, or

obtain waiver• Maintain confidentiality• Be fair

Reporting Adverse Actions


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Mandatory Reporting Requirements

May have to report adverse actions to:• National Practitioners Data Bank (NPDB)• Licensing boards

• Hospital report of adverse action against physicians• Practitioner report to licensing board• Termination for misuse of controlled substances

NPDB Reporting42 USC 11133

• Must report action against physician if:• Action that adversely affects privileges for more than 30

days and is based on competence or conduct adversely affecting patient care.

• Voluntary surrender or restriction of physician privileges while physician is under investigation for incompetence orwhile physician is under investigation for incompetence or professional conduct, or in return for not conducting an investigation.

• Suspension in effect for more than 30 days.• Revision or modification of such action.

• May report actions against other licensed health care practitioners.• Proposed rule may extend reporting duty.

NPDB Reporting

Consequences for failure to report: • Lose HCQIA immunity for peer review actions for

three years.• Before imposing sanction, DHHS must:

• Give hospital notice of violation.Give hospital notice of violation.• Chance to cure the violation.• Opportunity for hearing.

* Must really screw up to lose HCQIA protections.


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NPDB Reporting

Immunity for making reports• No liability for making NPDB report so long as

report is made “without knowledge of the falsity of the information contained in the report.” (42 USC 11137(c))• Brown v Presbyterian Healthcare (10th Cir• Brown v. Presbyterian Healthcare (10th Cir.

1996): hospital not immune where it improperly checked “incompetence/malpractice/negligence.”

* Be careful what you include in report.* Consider checking “other” and writing appropriate

description.

NPDB Reporting

Confidentiality• Must keep NPDB report confidential.

• May disclose to others as part of peer review process.• May not disclose outside of peer review process

without authorization of physicianwithout authorization of physician.• Confidentiality does not apply to original records from

which the NPDB report was generated.• $11,000 fine for improper disclosure.

Credentialing and Corrective Action: Summary


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Credentialing and Corrective Action: Summary Make sure appropriate process is set forth in bylaws, rules

and regulations.– Consistent with laws, accreditation standards, and process

of other reputable hospitals. When reviewing a credentialing recommendation:

– Ensure process in bylaws, rules and regulations was followed.

– Ensure decision is reasonable and supported by facts. Not arbitrary, capricious or discriminatory.

– If there are concerns, send back to medical staff for further review or response to questions.

If privileges denied, provide fair hearing process required by HCQIA.

Additional Holland & Hart Resources

Health Law Basics monthly webinar series– Past webinars available at www.hhhealthlawblog.com.– Future webinars 10/24 Telemedicine 11/7 Compliance Plans 11/7 Compliance Plans 12/12 Responding to Government

Investigations Healthcare Update and Health Law Blog

– Under “Publications” at www.hollandhart.com.– E-mail me at [email protected].

Questions?

Kim C. StangerHolland & Hart LLP

[email protected]@hollandhart.com(208) 383-3913
