Legal Aspects of the US Health Care Administration Research Paper

Abstract

This paper deals with certain legal aspects of the U.S Health Care system. Medical staff privileges form an important aspect of the medical system in USA. Physicians are required to possess medical staff privileges in order to practice in one or more facilities. However, there are cases where the medical staff privileges of physicians have been limited or revoked by the medical staff of hospitals for arbitrary or discriminatory reasons.

The paper under consideration identifies the key steps to be taken in the process of limiting/revoking a physician’s privileges. It briefly discusses the background of physicians’ privileges and the nature of hospital-physician relationship. It gives an insight into the medical peer review process in USA and its importance, the steps involved in the process as well as the administrative and regulatory legal issues to be considered in this context.

It also sheds some light on the importance of case laws in USA by identifying a case law that involves limiting or removing a physician’s medical staff privileges. Finally, it ends with an appropriate conclusion.

Key steps to be taken when considering limiting a physician’s privileges in USA

Limiting or revoking the privileges of a medical practitioner is the extreme disciplinary step taken by the medical staff leaders of hospitals in USA. Usually, the hospital authorities try to deal with the issues of non-compliance on the part of the medical practitioners through less severe means before taking the ultimate disciplinary step. However, the primary objective of all health care organizations is providing optimum patient care and continuous disruptive behavior on the part of the physicians would certainly impact the effective functioning of these organizations. The key steps taken while limiting or revoking a physician’s privileges may be organization specific. However, some of the basic steps are:

• Validating the charges labeled against the physician under consideration by the peer review committee
• Appointing an ad hoc committee for investigating the medical procedures of the concerned physician and reviewing his/her services within the hospital
• Discussing the findings of the committee with the indicted physician while giving him/her the chance to present his/her opinion
• Comparing the peer review committee report with the findings of the ad hoc committee
• A warning to the indicted physician in case of a single confirmed act of indiscipline
• Giving the indicted physician a chance to improve his/her services in the field of patient care over a period of time
• Limiting/revoking the privileges in case of continuation of the violation of hospital policy (Nesse 2009)

Validating the serious concerns raised by the peer review committee of a healthcare organization regarding the quality of patient care provided by one of its physician is a crucial step in the entire process. This is because there has a number of examples where the peer review committee reports of various hospitals have been laced with mistakes and other irregularities. As the first step in the process, the CEO of the hospital would forward the report to the medical director to review its findings.

In cases which involve taking strict disciplinary measures, revalidation of the findings constitute another important step. The CEO would request the Medical Executive Committee to appoint an ad hoc committee comprising of other physician staff members for reviewing and investigating the findings of the peer review committee. The members of the ad hoc committee are chosen by the medical Chief of Staff (Upenieks 2010).

The physician under review would also be given a chance to present his/her point of view as well as defend the charges labeled against her. The medical director would meet the concerned physician and initiate the discussion of the peer review committee findings. The content of the discussion would be well documented in writing.

The next step would involve comparing the findings of the ad hoc committee with that of the peer review committee. In case the peer review committee report appears unfounded, the charges against the physician under review would be dismissed. Confirmation of the peer review committee report would initiate the next step.

In case of a single confirmed act of indiscipline on the part of the physician, the medical director would remind him/her of the hospital policy and the severe disciplinary measures to be taken in case of recurrent non-compliance with the policy including summary suspension. Any rebuttal to the charges submitted by the indicted physician would also be recorded.

The conduct of the physician under review would be observed over a period of time. In case of recurrent disruptive behavior on his/her part, the hospital authorities including the medical director, the president of medical staff as well as the CEO would intervene in curbing the disruptive behavior of the physician through a series of meetings (Fredericks 2009).

If, in spite of interventions, the indicted physician continues with his/her non-compliance with the hospital policy, the CEO, the medical director and the president of the medical staff would reach a common consensus of limiting/revoking his/her privileges. This decision would lead to the indicted physician losing his/her medical staff membership as well as privileges.

Brief background on physicians’ privileges and hospitals’ relationship with medical staff in USA

Staff privileges are important for health care professionals as these facilitate their economic and professional development in their chosen fields. In this context, the health care organizations face a paradoxical situation. On one hand, they have to be selective in granting staff privileges in order to maintain the quality of services provided. At the same time, these organizations need to formulate an objective professional/quality criterion for granting privileges in order to avoid discrepancies in the process.

However, as the competition for patients increases, the possibility of denying privileges to competent health professionals to prevent their entry in the marketplace and to avoid competition also crops up. Anti-competitive abuses are also on the rise (Cohen 2009).

These and a number of other factors have lead to the formulation of the medical staff development plans or strategic plans in the 1980s. Presently, most of the hospitals in USA have adopted the medical staff development plans due to various reasons. Some of them are:

1. To employ competent physicians in order to attract the patients as well as develop their uniqueness in the market
2. To outline the number of physicians required in each specialty as well as their required qualifications
3. To integrate physicians and the hospital services
4. To determine the number and types of physicians to be medical staff members of the hospital

The recurrent trend of denying privileges to a physician on the basis of his/her economic credibility has made the American Medical Association (AMA) Organized Medical Staff Section formulate another policy to counter this phenomenon.

At the 1997 Interim Meeting of the AMA House of Delegates, it has been reinstated that hospital medical staff privileges should be “… contingent on training, experience, and demonstrated competence, and that medical staff membership should not relate to a physician’s business/professional relationships with other hospitals or health systems.” (AMA 2010)

The development of the medical staff development plans is intrinsically related to the evolution of the physician-hospital relationship. Initially, the relation between physicians and hospitals has been an independent one with physicians voluntarily providing non-patient care services.

However, economic, financial and social regulations have made a drastic impact on the relationship. Over the past two decades, the business tactics of the managed care companies have been instrumental in strengthening the relationship between physicians and hospitals who have realized the need to work together to address the issues of cost, quality and accessibility which are of primary importance in the field of healthcare (Bunting 2010).

There are a number of factors that act as barriers to the sustainable relationship between hospitals and physicians such as:

1. The tendency of some hospitals to adhere to the current health care model without bringing about development of technological infrastructure or investing in integrated delivery systems
2. Competition between physicians and hospitals result in misapplication of resources, higher costs for patients as well as reduction in the amount of healthcare expenditure on hospital services
3. The tendency of the hospitals to compensate for the losses incurred from one payer or service by increasing the charges of commercial and self-pay patients
4. The advent of medical tourism, both at the domestic and international level

The above factors that act as barriers to physician-hospital relationship can be overcome by adopting the following strategies:

1. Healthcare executives need to analyze the value of the services provided by the medical staff on the basis of internal as well as external parameters
2. Healthcare organizations need to develop a shared vision, values and goals with the medical staff in order to enhance their sustainability
3. Healthcare organizations need to develop an integrated healthcare strategy whereby the goals and objectives of the hospital would be aligned to those of the physicians

Keeping in view the present situation of the physician-hospital relationship in USA, it may be inferred that constantly redefining the hospital-physician relation, integrating the physicians with the hospitals as well maintaining transparency regarding the cost and quality of services provided would go a long way in enriching hospitals’ relationship with medical staff (Fredericks 2009).

The first step taken by the hospital in limiting/revoking a physician’s privileges

The role of the hospital in the process of taking action against a physician’s privileges begins with the peer review process.

The medical peer review is the process usually employed by the organized medical staff of hospitals to evaluate the work of a peer and determine whether the medical services rendered by him/her meet the accepted standards of care.

One of the important functions of the peer review committee is to investigate complaints against physicians and determine whether staff privileges be granted or revoked. The peer review process may be initiated on the basis of a complaint made by a patient, a fellow physician or an insurance carrier depending on the hospital policy.

The main aim of the hospitals in adopting the peer review process is to safeguard the health and safety of the common people. This is achieved by eliminating through the peer review process those physicians who provide substandard patient care and indulge in disruptive behavior. Moreover, exclusion of incompetent physicians reduces the risk of the hospitals being exposed to malpractice liability.

Another important reason for the incorporation of the peer review process by the hospitals is safeguarding the rights and privileges of efficient medical practitioners so that they are not barred from practicing their profession for arbitrary or discriminatory reasons (Zimmerman 2007).

Steps involved in carrying out the peer review process

The medical peer review process is subject to minor variations depending on the policies and by laws of the concerned organization. However, it usually involves the following basic steps:

Case identification and initial review

The first step in the process is case identification. All cases related to medical care issues are examined by any organization’s Peer Review Committee. The cases related to medical care issues may be identified through member services, concurrent review, case management, risk management, audits, clinical referrals and many more. After case identification, the initial review is usually done by a nurse from the Quality and Health Services Department. If no quality issues are identified after the review process, the case is deemed closed.

Responsibilities of Peer Review Committee and Chairman

Cases that require further evaluation are referred to the Chairman of Peer Review Committee for review as well as identification of the severity of the case. If the case is of minor negative consequence, it is handled by the Chairman himself. However, cases involving serious care issues are referred to the Peer Review Committee which comprises of the Chief Medical Officer, Medical Directors and specialist practitioners employed on an ad hoc basis according to the specialty of the case.

All relevant data in the form of a year or more of clinical records of the indicted physician are collected and the details are discussed with him/her. This discussion with the indicted physician helps the peer review committee in deciding alternative course of action to be considered before proceeding to the Formal Review process (Cohen 2009).

Formal Peer Review Committee Process

The information regarding the hearing before the Peer Review Committee is to be conveyed to the indicted physician within fifteen calendar days of the committee’s decision to take a formal course of action.

The indicted physician has the right to be represented by an attorney in order to provide evidence in his defense as well as submit a written statement at the close of the hearing. The decision and recommendations of the Peer Review Committee are to be sent to the concerned physician within ten working days of the hearing.

Physicians with possible economic competition with the indicted practitioner are not allowed to a member of the peer review committee.

In certain cases, the committee members may decide to take the opinion of an external expert for specialty review depending on the gravity of the case.

Documentation of Activities

All decisions taken by the Peer Review Committee and the results of their evaluation of the quality of care services provided by the physician in question are well documented in writing and preserved in the Quality and Health Services Department. All these are kept confidential.

Appeal Rights

The indicted physician has the right to request an appeal from the Peer Review Committee within ten days of receiving the final decision taken by the committee. The appeal should be made in writing and should clearly specify the grounds for the appeal. The possible grounds for appeal shall be:

1. Disagreement with the procedures employed by the Peer Review Committee
2. Insufficient evidence presented to support the decision during the hearing

Usually, the organization’s Board of Directors would review the appeal request and may request the Peer Review Committee for reconsideration of its original findings. The decision taken by the committee after considering the recommendations of the Board of Directors is considered final (McLellan 2006).

Additional Corrective Measures

In addition to its initial recommendations, the Peer Review Committee may suggest further corrective measures depending on the nature of the case. These additional corrective measures are usually recommended by the Peer Review Committee Chairman in consultation with the supervising practitioner.

Administrative and regulatory legal issues to be considered

There are a number of legal issues that need to be taken into consideration in the conduction of the medical peer review process.

Legal issues

The legal implications involved in the medical peer review process have assumed greater importance with the increase in the cases where the findings of the peer review committee has been questioned.

The “Health Care Quality Improvement Act of 1986 (HCQIA), 42 USC §11101 et seq.” (Nesse 2009) has laid down certain standards for professional review actions. Compliance with these standards would assure the professional review body as well as any member or staff associated with it of their being indicted under any professional or state law regarding any of their decisions.

The professional review committee is expected to provide proper notice and a hearing to the concerned physician. According to the HCQIA, 1986, a proper notice should include the following:

1. a statement that the committee has decided to take a professional action against the physician under consideration
2. specification of the reasons that initiated the action
3. an indication of a possible hearing for the physician and the time limit within which the request must be made
4. summary of the physician’s rights pertaining to the hearing

If the indicted physician appeals for hearing, he/she must be informed of the date of the hearing as well as the persons who would testify in favor of the professional review committee.

As per the standards laid down by the HCQIA, the physician under consideration should be allowed to be represented by an attorney who can cross-examine the witnesses, present evidence as well as submit a statement at the closing of the hearing.

The HCQIA, after the hearing specifies that the hearing officer, the hearing panel or the arbitrator suggest the practitioner in question to submit recommendations.

Furthermore, the physicians and practitioners are offered a number of incentives in order to encourage their participation in the peer review process. These incentives are in the form of protection offered to them by the federal and state laws. Some of these are as follows:

1. the physicians and practitioners participating in the peer review process should be granted immunity from lawsuits
2. the information gathered during the peer review process must be confidential
3. designating the peer review work product as privileged and barring it from being produced in court

Administrative issues

There are a number of administrative issues that have surfaced in the field of medical peer review process. Some of these are:

Change in the review methods

The changing social and economic scenario has often made the medical peer review process appear inadequate. The need to develop new methods of review is constantly felt in order to address the issues of cost, quality and efficiency which are the most important aspects of the U.S healthcare system.

In fact, the federal government has also intervened in the endeavour to formulate new review processes. E.g. the Professional Standards Review Organization (PSRO) which has been designed to review the quality of care provided to the resident patients by the physicians whose services are paid by Medicare or Medicaid (Bunting 2010).

Expenditure incurred in the medical peer review process

The medical peer review process in USA is a pretty expensive affair with costs incurred at every step of the process. Naturally, this is a matter of serious concern for the healthcare system whose expenditure on hospital costs has been on a constant rise.

Change in the goals of the review process

There has been an extensive transformation in the set of criteria which are used in determining the quality of care provided to the patients. Unprecedented improvement has been detected in the quality of care provided by various healthcare organizations with the help of set criteria. Naturally, this has changed the way the quality of healthcare provided by the physicians to the patients is determined.

In the emerging scenario, the factors that decided the services provided by a physician as sub-standard are no longer acceptable. Moreover, the peer review process findings focused more on the technical aspects of care provided by the physicians and overlooked the aspects of ‘implicit’ care. ‘Implicit’ care provided by physicians has also been controlling forces in the diagnosis and treatment of a problem.

Development of a uniform process of review

Discrepancies in the findings of the medical peer review committee have highlighted the need for a uniform process of review. Many experts are of the opinion of creating a national board of peer review which would be an independent agency evaluating the services provided by the medical practitioners and suggesting remedial measures for their overall improvement (Scarrow 2009).

Case Law involving physicians with their medical staff privileges limited or removed

Developing case laws is an effective in providing ‘due process’ rights to the physicians employed with hospitals as well as Managed Care Organizations (MCO). Due process is often defined as the fundamental legal issue that is responsible for maintenance of all personal rights from legal point of view. However, it is a time consuming process as litigation takes a considerable amount of time and decision is made only after all appeals are exhausted.

There are quite a few case laws which have reinstated the fact that the physicians employed with MCOs are entitled to the same facilities in the form of due process and fair hearing as those employed with the hospitals. Reference may be made to the case of Dr. Paul Harper, a surgeon employed with Healthsource New Hampshire, Inc., on a contractual basis.

Dr. Paul Harper was entitled to provide both surgical and primary care services to the patients of Healthsource from 1985 to 1989 (Bunting 2010). In 1989, Healthsource modified its contract with Dr. Harper requiring him to serve only as a primary care provider. In 1994, Dr. Harper was notified without any prior information that his contract with Healthsource has been terminated as he has not been able to satisfy certain credential criteria. Prior to the notification served to Harper, he had pointed to some irregularities in the entries made in the treatment records of some patients.

Harper appealed to the decision to terminate his contract and asked Healthsource to disclose the evidence on the basis of which the decision to terminate his contract was made. Healthsource refused to comply with his request but gave him an opportunity to present evidence in his favor before a Clinical Quality Assurance Committee. Following the refusal to disclose substantial evidence against him, Harper did not appear before the committee. Consequently, it was recommended that Harper be terminated without cause (Bunting 2010).

The doctor appealed the above decision before an executive level committee at Healthsource. The executive level committee upheld the decision made by the Clinical Quality Assurance Committee without presenting any evidence against the doctor. Harper filed suit.

Harper’s claims were met with decline in the initial stages of litigation. Healthsource was successful in dismissing all the claims made by Harper in the superior court. Finally, Harper presented his case with all his claims before the New Hampshire Supreme Court.

The New Hampshire Supreme Court dismissed all the claims made by Harper except one- “…whether his termination without cause was a violation of public policy or constituted bad faith” (ARC 2010).

In this particular case, which was a first of its kind for the State of New Hampshire, the court declared that when a physician is terminated from his office without and specific reason or the termination is “… made in bad faith or based upon some factor that would render the decision contrary to public policy, then the physician is entitled to review of the decision” (Upenieks 2010). This was presented in the case “Harper v. Healthsource NH, Inc., 674 A.2d 962 (NH 1996)” (Upenieks 2010).

The decision taken by the Supreme Court in the Harper case has had a number of implications. Firstly, the court pointed out the fact that Harper was neither an employee of Healthcare nor an independent physician. Secondly, the decision is considered phenomenal in the sense that it lead to the formulation of a common law in order to protect Harper’s ‘right’ of access to his patients. Moreover, the decision emphasized the fact that in an ideal physician-patient relationship under managed care, neither the physician nor the patient has the power to supersede the interests of the MCO (Upenieks 2010). Thus, the decision in the Harper case lead to the formulation of a legitimate public policy to protect the physician-patient relationship.

Conclusion

The evolution of the relationship between hospitals and physicians is marked by the granting of privileges to private physicians to be members of the hospitals’ organized medical staff. Hospitals are defined by specific policies and bylaws that govern the evaluation of the quality of care provided by the medical staff. The medical peer review process is used with the primary objective of enhancing the quality of medical care as well as assuring patient safety. The findings of the peer review process determine whether hospitals should grant or revoke the privileges of the concerned physicians. However, from the above discussion, it follows that there are cases where the medical ethics involved in the peer review process is not taken into consideration. In USA, there are innumerable cases of physicians whose medical staff privileges have been limited or revoked for arbitrary or disciplinary reasons. Due process rights and case laws have often proved inadequate in combating the problem of physician abuse. The peer review process and granting or revoking of medical staff privileges involve a number of administrative and legal issues that should be taken into consideration. The legal rules need to be strengthened in order to regulate and control the misapplication of the peer review process and in combating the hospital-physician relationship.

References

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