Current Cases: Medical Staff Nightmares And Fairy Tales

1. Current Cases: Medical Staff
Nightmares And Fairy Tales
Wisconsin Association of Medical Staff Services
September 27, 2019
Presented by Sarah Coyne and Jon Kammerzelt

2. Session Description
• This session will cover the challenging and thorny medical staff issues that your
speakers have handled (from a legal perspective) in recent times. This will include the
algorithm for deciding whether to proceed down an employment road versus a medical
staff road with employed physicians, the tricks of managing corrective action and
confidentiality issues and how to handle questions from coworkers, patients and
community members, leaves of absence, the reporting parameters for suspension
versus relinquishment of privileges, and other interesting but challenging experiences.

3. Program Objectives
1. Learn from recent experiences about the current issues posing the most difficult
problems in medical staff discipline/ corrective action.
2. Understand the options with employed physicians (or other medical staff members).
3. Understand leave of absence implications from a medical staff standpoint.
4. Understand reporting parameters in various scenarios.

4. Employment Versus Medical Staff Proceedings
• Human Resources is often the first to learn of a problem, especially when:
• The catalyst is a complaint from a co-worker.
• The physician is employed by the hospital.
• There is a critical crossroads right at the beginning for an employed physician: Will the
investigation be handled as a function of employment or medical staff membership –
i.e., through corrective action.
• Practical tips:
• Ensure that HR understands that medical staff has its own review and corrective action process.
• Ensure that HR will communicate immediately with medical staff leadership so that a reasoned
decision can be made.

5. Deciding Whether To Handle Through HR vs. MS
• Does the employment agreement have a clear path to termination for this situation?
• Behavioral vs. clinical
• Onerous severance?
• Procedural requirements?
• With/ without cause?
• If employment is terminated, will privileges/ appointment terminate as a result?
• Does the MEC or board feel an obligation to warn future potential employers/ practice
sites about a potentially dangerous physician (are future patients at risk)?
• Does the MEC believe that handling through HR will put them at risk of negligent
credentialing?
• Are there impairment/ mental health / ADA issues?

6. Health Care Quality Improvement Act (HCQIA)
• Having the corrective action section of the bylaws and fair hearing plan reflect HCQIA,
and following them, means that the participants in the process will have immunity if
sued by the physician.
• The idea is to encourage frank peer review by limiting civil liability.
• If health care providers as a professional review body meet the standards set forth in
HCQIA, then there is no civil liability for:
• The professional review body itself (committee).
• Any person on that committee.
• Any person designated/ contracted to that committee.
• Any person who participates or assists the committee.

7. Several Important Timing Parameters
From HCQIA
• If a practitioner’s medical staff privileges are suspended for more than FOURTEEN
DAYS, the practitioner will have a right to request a hearing.
• Investigation should begin (and if possible, conclude) during the fourteen days.
• Nightmare: Bylaws that shorten the fourteen days (or lengthen it)!
• Suspension or limitation of privileges for MORE THAN THIRTY DAYS means a report to
the NPDB.
• Hearing must be AT LEAST THIRTY DAYS after physician requests it.

8. Adequate Notice Under HCQIA
• Two separate notices required under HCQIA:
• Notice of Adverse Action Recommendation (and Right to Request a Hearing).
• Notice of Hearing (after practitioner has requested it).
• Nightmare: Trying to give notice to a physician who will not answer the door or sign a
"return receipt requested").
• Fairytale: The bylaws bless multiple methods of delivery, e.g. including electronic mail
that confirms receipt at a certain time.

9. HCQIA Requirements For A Fair Hearing
• Physician may be represented by an attorney (or someone else).
• Some sort of tribunal.
• Mutually acceptable arbitrator.
• Hearing committee of physicians not in direct competition.
• Hearing Officer.
• Nightmare: Bylaws that allow the physician indefinite veto power.
• Fairytale: Bylaws that allow the physician input, but allocate ultimate authority to the hospital to
appoint the hearing committee.
• Physician may call and examine witnesses, present evidence, submit a written
statement, and upon conclusion receive a written decision.
• “Appeal” rights common but not essential for HCQIA.

10. HCQIA And Confidentiality
• HCQIA states that information that identifies the entity, practitioner or patient that is
reported to peer review committees is confidential and shall not be disclosed (other
than to reviewed practitioner) except:
• In the course of the PRA.
• As necessary to query the NPDB.
• In accordance with federal regulations or state law.
• The committee taking action on privileges MUST understand that confidentiality is
LEGALLY REQUIRED (by HCQIA and in Wisconsin by Wis. Stat. s. 146.38). No leaking! It
creates a separate battlefield.
• Recommendation: Have the committee members sign agreements to maintain the confidentiality of
the matter at the beginning.
• Recommendation: Collect all paper materials at the end of each meeting.

11. Knowing The Facts
• Before taking action on privileges, the acting committee should do a very thorough
analysis of the facts – this is always an area of attack.
• Review medical records.
• Talk to key witnesses.
• Talk to the physician.
• Err on the side of fairness to the physician and document that (his or her side of the
story, his or her access to documents, etc.).
• Nightmare: Committee decides to revoke privileges without having reviewed
documents, without having heard in any depth from the doctor, and without having a
significant period of discussion.

12. The Physician Under Review's Side Of The Story
• The physician under review should have unfettered input to the investigative
committee is crucial and should be actively considered by the MEC.
• The input can be a meeting, in writing, or (ideally) both.
• Nightmare: The physician is given ten minutes to present his case.
• Fairytale: The physician is given an opportunity to meet with the IC and an opportunity
to submit documentation including a narrative.

13. Potential Landmine: Limiting Physician Access
• The physician under review should have full access to the medical records of any
patient where that patient's care is the basis (or one of the bases) for the adverse
recommendation.
• The physician under review should also have the bylaws and any policies/ procedures
requested.
• HOWEVER:
• The physician should not be able to access the files of other physicians.
• There should be no right to discovery in the bylaws (there isn't in HCQIA).
• The hospital does not have to facilitate interviews/ depositions with hospital staff (although can't do
much about the physician contacting such staff).

14. Nightmare: Denying Physician Access To
Documents
• Recent court case: Blaine v. North Brevard County Hospital District required the
hospital to give the plaintiff physicians a hearing for failing to provide physicians with
data they had requested during the course of reappointment.
• The court held that under the medical staff bylaws, the hospital was required to give
the physicians a hearing before their request for reappointment and renewal of clinical
privileges could be denied for failing to provide “patient data.” The “patient data”
appeared to be related to the hospital’s cancer program and necessary for
accreditation purposes.

15. Physician Health/ Impairment
• Impairment issues may be handled through a separate impaired provider policy, which
may be "kinder and gentler" than either HR or medical staff process.
• However, be aware of who owns the implementation of that policy.
• If there are independent medical examinations, be aware that the evaluator may have
a duty to report to the Department of Safety and Professional Services under Wis. Stat.
s. 448.115.
• A good policy will have a pathway from the impaired provider route to the medical staff
corrective action route.
• Nightmare: Taking corrective action that results in loss of privileges/ NPDB report
without having considered that the behavior/ conduct stemmed from a health or
impairment issue.

16. "What Is Going On With Dr. X?"
• Patients, co-workers and community members may start to wonder why a physician
under review has stopped practicing or stopped exercising certain privileges.
• Because confidentiality is key, the strategy for responding to such inquiries should be
thought out in advance and scripted, e.g.:
• To patients/ community members: He has taken a leave of absence.
• To co-workers: He is not currently scheduled, for personal reasons (for confidential reasons).
• The right message will vary greatly with each case.

17. Promising Confidentiality To Witnesses
• Outside of the corrective action process, a co-worker's commentary or complaints
about another practitioner may be kept confidential.
• Nightmare: Having promised confidentiality to a witness who is the only one with first-hand
knowledge of the basis for a fair hearing.
• Nightmare: Hospital is obligated to turn over all relevant documents to physician who has requested
hearing and the physician insists on confronting those who reported problems.

18. Physician's Counsel Wanting To Interview/
Subpoena
• A clear set of bylaws will not allow discovery (depositions, interviews, interrogatories,
etc.) – because this is not a court proceeding and the rules of civil procedure do not
apply.
• However, under Wisconsin law there is a way to look at things that the hearing
committee has the power to issue subpoenas to unwilling witnesses. Recognize that it
is discretionary and not mandatory.

19. Summary Suspension
• Summary suspension of some or all privileges.
• If summary suspension lasts longer than fourteen days, the physician has the right to
request a hearing.
• If the suspension lasts longer than thirty days, there will be a reporting requirement to
the NPDB (more coming).
• The corrective action investigation/ process may run concurrently with a summary
suspension.
• HCQIA contemplates “emergency” suspension with certain required parameters.

20. Summary Suspension "Do's"
• Do think about whether the suspension is legitimately lasting more than fourteen days.
• Do think about whether the bylaws mandate some sort of meeting during the fourteen
days.
• Do think about whether you are creating a double path to the same end (and make
sure the bylaws allow for only one hearing on the same issue).

21. Summary Suspension "Don'ts"
• Don't summarily suspend a physician for behavior that happened a long time ago/ has
been known for a while – it is supposed to be an aversion of imminent problems.
• Don't assume that events that happened offsite are irrelevant – if there was some sort
of violent crime, it is relevant to whether patients are in danger... BUT
• Don't assume that everything that happens offsite IS relevant, e.g. maybe a
misdemeanor/ traffic incident that occurred offsite is legitimately unlikely to carry over.

22. Leaves Of Absence
• If a leave of absence while under investigation restricts privileges, it is reportable.
• NPDB's regulation states that, "[a]cceptance of the surrender of clinical privileges or
any restriction of such privileges" is reportable.
• To the extent a leave of absence restricts a practitioner's ability to exercise privileges, it
is considered a surrender that is reportable.
• If a practitioner can take a leave of absence without affecting his or her privileges, and
his or her privileges remain intact during the leave of absence, the leave of absence is
not reportable to the NPDB.
• Nightmare: Completely unclear language in the bylaws about the procedural
implications if the physician is declined return from leave.
• Fairytale: A nice clear conduit between denial of return from leave and the procedural
rights mandated under HCQIA.

23. Licensing Board Actions
• A limitation on the license may trigger a restriction of privileges under the bylaws –
which if automatic, will not give rise to hearing rights.
• A limitation on the license may result in the physician's breach of his or her
employment agreement – would be a factor in favor of going the employment route
rather than the medical staff route.
• Nightmare: Physician's license is limited but he/ she does not disclose this to the
hospital.
• If there was an outright omission on an application (for employment, for appointment, for
reappointment) that is in itself a basis for corrective action regardless of the underlying reason for
the license limitation.
• The bylaws should require disclosure of any such limitations (license, DEA, etc.).

24. Selecting And Preparing The Investigative
Committee
• Pick someone (counsel, medical staff coordinator) to organize the meetings of the investigative
committee – first one should be in person, after that they might have to be by phone.
• At first meeting, have them sign a confidentiality statement and impress the importance of
confidentiality. Have them decide who they want to interview, including the physician. Help them to
reach out to those individuals and schedule them – interviews should be in person with all members of
the committee if possible.
• Be aware of timelines in the bylaws – in general the whole process should not take more than a month
(if possible).
• Make sure the physicians on the committee are armed with the bylaws and the request for correction
action so they know what their mission is.
• They should ultimately come to a consensus or at least majority and recommend possible courses of
action.

25. Ultimate Adverse Recommendation By MEC
• The MEC technically does not have to defer to the investigative committee's
recommendation, but usually does.
• An adverse recommendation by MEC will entitle physician to request a hearing.
• Bylaws will spell out which actions are “adverse actions” which will essentially be
recommendations for curtailing/ limiting privileges or appointment.
• Bylaws will spell out timing and process for requesting a hearing.
• Nightmare: Bylaws that give a really short timeline for hearing.
• Fairytale: Bylaws that allow for reasonable scheduling.
• The governing body and hospital administration are apprised at this point (usually
administration is involved and governing board is aware well before this).

26. The Hearing: Nuts And Bolts
• Physician may be represented by an attorney (or someone else).
• Nightmare: Physician is represented by another physician on the medical staff who then becomes
adverse to the MEC.
• Fairytale: Physician gets a reasonable attorney.
• Some sort of tribunal:
• Mutually acceptable arbitrator.
• Hearing committee of physicians not in direct competition.
• Hearing Officer.
• Physician may call and examine witnesses, present evidence, submit a written
statement, and upon conclusion, receive a written decision.
• Court reporter/ other recording mechanism.
• More in the "Hearing Tips" section – coming up.

27. What Happens After The Hearing?
• Hearing panel or officer issues a report within the timelines in the Fair Hearing Plan.
• Physician and MEC both receive a copy of the report.
• If adverse, usually goes straight to governing board for consideration (approval,
rejection, or modification).
• If governing board decision is adverse, most Fair Hearing Plans allow for appeal to the
board – this is NOT necessary for HCQIA immunity.
• If upheld on appeal, the life cycle comes to an end – the next step would be for the
physician to bring a lawsuit alleging some sort of wrongful limitation of privileges –
HCQIA immunity would be a strong defense but does not prevent the lawsuit from
being filed.

28. Where Do Lawyers (On Both Sides) Fit In?
• The bylaws and Fair Hearing Plan should be clear that the physician does not have a
right to counsel being present until the hearing – up until that point, it is internal.
• Probably best for hospital/ medical staff counsel not to be present at those meetings
either – but certainly may be involved.
• It is common to have the hospital's counsel represent the MEC but watch out for
diverging interests – it is possible that separate counsel will be necessary.
• At the hearing, each side is represented by counsel.

29. To Report Or Not To Report
• Often hospital medical staffs struggle with which actions might be reportable and to
where.
• The scariest reporting obligation, from a physician's point of view, is the NPDB.
• Both payors and providers query the NPDB before deciding whether to approve
credentials.
• "Dings" in the NPDB are black marks that hinder the physician's ability to obtain
privileges/ payor credentialing.

30. What Must Be Reported To The NPDB?
• Hospitals and other health care entities must report adverse clinical privileges actions
to the NPDB.
• Any professional review action that adversely affects the clinical privileges of a
physician or dentist for a period of more than thirty days; OR
• The acceptance of the surrender of clinical privileges, or any restriction of such
privileges by a physician or dentist:
• While the physician or dentist is under investigation by a health care entity relating to possible
incompetence or improper professional conduct; or
• In return for NOT conducting such an investigation or proceeding.

31. Agreements Not To Exercise Privileges
• Is an agreement not to exercise privileges during an investigation, without actually
surrendering the privileges, a resignation while under investigation that is
reportable?
• Yes, the agreement not to exercise privileges is reportable if other reportability conditions are met.
NPDB regulations state that "acceptance of the surrender of clinical privileges or any restriction of
such privileges . . .while under investigation" is reportable. An agreement not to exercise privileges
is a restriction of privileges. Any restriction of privileges while under investigation, temporary or
otherwise, is considered a resignation and must be reported.
• Nightmare: An email from medical staff leadership to the physician stating essentially "In return for
your agreement not to exercise your privileges, we will stop the investigation into the concerns
against you and no report will be made to the NPDB."
• Nightmare: "Your summary suspension is ending because you agreed that you will not see patients
at our hospital in the future – this will not be reported to any agencies."

32. What Is A Restriction?
• Denials or restrictions of clinical privileges for more than thirty days that result from
professional review actions relating to the practitioner's professional competence or
conduct that adversely affects (or could adversely affect) the health or welfare of a
patient - MUST be reported to the NPDB.
• This includes denials of applications for initial privileges.
• A restriction is the result of a professional review action based on clinical competence
or professional conduct that leads to the inability of a practitioner to exercise his or her
own independent judgment in a professional setting.

33. Surrender Of Privileges Or Appointment
• Surrender of privileges while under investigation or in order to avoid investigation (or
the result of the investigation) is reportable.
• Nightmare: The hospital bends over backwards to facilitate handling something
through HR rather than medical staff process and then the physician sends an ill-
advised resignation letter "I resign my privileges."

34. Threshold Eligibility Criteria
• A denial of clinical privileges at appointment or reappointment that occurs solely
because a practitioner does not meet a threshold criterion for that privilege should
NOT be reported to the NPDB.
• Such denials are NOT deemed the result of a professional review action relating to the
practitioner's professional competence or conduct and should not be reported to the
NPDB.
• Rather, these are decisions based on eligibility.

35. Withdrawal Of Application
• Voluntary withdrawal of an initial application for medical staff appointment or clinical
privileges prior to a final professional review action generally should not be reported to
the NPDB.
• However, if a practitioner applies for renewal of appointment or privileges and
voluntarily withdraws that application while under investigation for possible
incompetence or professional misconduct, then the withdrawal of the application must
be reported.
• Applies regardless of whether practitioner KNEW he or she was under investigation –
TELL THE PROVIDER WHAT IS GOING ON.

36. Nonrenewals
• Generally not reported to NPDB.
• However, if practitioner decides not to apply for renewal of medical staff appointment
or privileges while under investigation for professional competence or conduct – that is
considered a surrender while under investigation and must be reported to the NPDB.
• Regardless of whether the practitioner was aware.

37. No Need To Report Investigations
• The fact of an investigation need not be reported to the NPDB.
• However, when the investigation has started, the chances of reporting go up because
surrender while under or to avoid an investigation is reportable, and "investigations"
run from "the start of an inquiry until a final decision on a clinical privileges action is
reached."
• Not limited to how investigation is defined in the bylaws.
• NPDB distinguishes a ROUTINE formal peer review process in which a "health care
entity evaluates, against clearly defined measures, the privilege-specific competence of
all practitioners." That is NOT an investigation for the purpose of reporting.
• But an investigation of a specific practitioner is different.

38. Reporting Revocation Of Temporary Privileges
• No distinction is made for corrective action regarding temporary privileges.
• If temporary privileges are for a specific amount of time and everyone agrees on that,
and they expire while under investigation – no report.

39. Reporting Summary Suspensions
• A summary suspension must be reported if it is:
• In effect or imposed for more than thirty days;
• Based on the professional competence or professional conduct of the physician; and
• The result of a professional review action taken by a hospital.
• Summary suspensions that have NOT lasted more than thirty days but are EXPECTED to
last more than thirty days and are otherwise reportable MAY be reported to the NPDB.
If the summary suspension lasts thirty days or fewer, a void report should be
submitted.
• The procedural rights of the practitioner are provided AFTER a summary suspension,
not before.

40. Reporting The Fact Of Proctoring
• It is a tough question whether proctoring must be reported to the NPDB if the
proctoring requirement is imposed for more than thirty days.
• If the proctor cannot perform certain procedures without proctor approval, it is a
reportable restriction.
• If the proctor is just reviewing records after a procedure, it is not reportable.
• Routine proctoring for new privileges would not be based on professional competence
or conduct and is not reportable, even if the proctor must be present.
• Recent Texas court case: If the proctoring COULD HAVE been accomplished in thirty
days, do not report even if for various reasons it actually was in place more than thirty
days (e.g. five proctored cases of a low volume condition).

41. Reporting Residents And Interns
• Residents and interns generally do not have clinical privileges and therefore, a
restriction of their practice is not an "adverse action" reportable to the NPDB.
• EXCEPTION: If they are functioning outside the scope of their graduate education, e.g.
moonlighting.

42. NPDB Sanctions For Failing To Report
• If NPDB suspects a hospital has not reported when required to do so, the Secretary of
DHHS will open an investigation and provide written notice to the hospital.
• NPDB may impose penalties for failure to report.
• The hospital can request a hearing.
• If the hearing is denied for untimeliness or lacking a sufficient statement of facts, or if
the hospital does not prevail at hearing, the sanctions include:
• Publication of the hospital's name in the Federal Register; and
• Loss of the hospital's HCQIA immunity for three years (starting thirty days after publication).

43. Things That Are Not Reportable
• Employment actions.
• Hospital administrative actions (such as discipline for failure to maintain insurance or
board certification).
• Automatic revocation of privileges (for the above reasons and others, e.g. failure to
complete medical records).
• A physician's surrender of privileges for personal reasons, unrelated to professional
competence or conduct.

44. Examples
• A physician applies for medical staff membership and is approved by the credentials
committee but withdraws his application before the governing board weighs in. The
physician is not under specific investigation, just general credentialing.
• NOT REPORTABLE.
• An employed physician is terminated through the HR process and pursuant to his
employment contract, his medical staff privileges automatically terminate although the
medical staff did not act on his privileges.
• NOT REPORTABLE.
• A physician applies for expanded privileges and is denied by the credentials committee
and the board on the basis that he lacks the skills.
• REPORTABLE.

45. © 2018 Quarles & Brady LLP - This document provides information of a general nature. None of the information contained
herein is intended as legal advice or opinion relative to specific matters, facts, situations or issues. Additional facts and
information or future developments may affect the subjects addressed in this document. You should consult with a lawyer about
your particular circumstances before acting on any of this information because it may not be applicable to you or your situation.
Any Questions?
Sarah Coyne
(608) 283-2435
Sarah.Coyne@quarles.com
Jon Kammerzelt
(608) 283-2438
Jon.Kammerzelt@quarles.com