November 30, 2017

QUESTION:        Is McRib really back?

ANSWER:            You bet it is! (for a limited time only, of course)

And so is Horty Springer’s Physician-Hospital Contracts Clinic — back by popular demand!

Join Henry Casale and Dan Mulholland in Austin in March for the latest legal developments affecting hospital-physician financial arrangements — and a Whole Lot More. But hurry. Just like that saucy sandwich we all love, the Contracts Clinic only comes around every couple of years. Don’t Miss It!

November 16, 2017

QUESTION:        I took the minutes at committee meetings for years, and if there was any doubt as to what someone said, my minutes would give a word-for-word accounting of the discussion.  We just hired someone new to take the minutes, and I was shocked at the small amount of information recorded.  What should be in the minutes?

ANSWER:            The most important thing that minutes should do is record the actions taken at a meeting, but not the discussions that took place.  There are “Do’s” and “Don’ts” for meetings, and we’ll start with the “Do’s.”

Do:            write down the name of the committee that is meeting, the date of the meeting, who is in attendance, and who is absent; list if there are any guests or visitors at the meeting; note the time the meeting was called to order, who called it to order, and the time it was adjourned; note whether it is a regular or special meeting of the committee; note, if it is a special meeting, that notice was given to the committee members and the way notice was given; note whether a quorum was present; note whether the previous minutes were read and approved; note the result of the votes, for example, 7–1 to suspend the physician’s privileges.  This is the most important “Do” since the vote is the committee’s action.

Don’t        record the details of any discussion.  This is the most important “Don’t.”  Sometimes, in the heat of the moment, someone may say something that they do not mean, that can be misinterpreted, or was meant as a joke, but looks sinister in black and white.  If it is recorded in the minutes, it is there forever, and may turn up again – in front of a jury.  There is not really a need to record the details of a discussion.  What is important is the vote, the committee’s action.

But, with every rule, there is an exception.  The exception here is “Do put details of a discussion in if it helps” and it helps when a committee makes an adverse recommendation regarding a physician.  In that case, the minutes could be your best friend.  The details would allow the committee to record the objective reasons for taking action.  The reasons can be explained, but, comments should not be attributed to any one individual.

Don’t        record how each member voted, unless a committee member wants a dissent recorded.

Don’t        record who made motions and who seconded them or who said what to someone else or record personal remarks unrelated to the committee’s business.

November 9, 2017

QUESTION:        Our Bylaws Committee would like to know more about exclusive contracts.  Specifically, we want to know where the hospital board gets the authority to enter into an exclusive contract.  Does this come from the medical staff bylaws or from somewhere else?

ANSWER:            Under the general principles of corporate law, hospital boards are afforded broad discretion in how they manage the hospital’s business affairs, including the ability to enter into exclusive contracts.  These general principles are reflected in laws at the federal and state levels, as well as in the standards of various health care accreditation bodies.  Consequently, the board’s authority to enter into an exclusive contract is bestowed by law, not by the medical staff bylaws.

Courts often view exclusive contract decisions as “quasi-legislative” actions, in contrast to an “adjudicatory” action aimed at a particular physician (which might give rise to a hearing).  So long as the hospital board acts rationally when it undertakes these quasi-legislative actions, courts are likely to defer to the board’s business judgment.

Although the medical staff bylaws are not the source of this authority, they may affect the process and consequences of entering into an exclusive contract.  For example, the bylaws (or credentials policy) may outline a process for the Medical Executive Committee to review and comment on the clinical performance and service implications of the proposed exclusive contract.  This review-and-comment process is limited solely to the clinical performance aspects of the contract; the actual terms of the arrangement (especially financial terms relating to remuneration) would not be disclosed to the Medical Executive Committee.

It is also important to see how the medical staff bylaws frame the issue of medical staff privileges.  The definition of medical staff privileges is relevant when assessing whether the exclusive contract arrangement will entitle the affected practitioners to any kind of hearing.  When you are drafting bylaws, we do not recommend that you give hearings to physicians affected by the exclusive contract.  Entering into this kind of contract is a managerial business decision – it is not a judgment about a particular practitioner’s competence or professionalism.

Most state laws (and most courts) recognize these core principles, but there are some exceptions.  Be sure to check the laws of your state before proceeding with an exclusive arrangement.

If you’d like more information on these issues, you should join us for our November 30 audio conference on Exclusive Contracts: New Challenges, New Opportunities.  Henry Casale and Josh Hodges will share best practices for entering into an exclusive contract, including recommendations on drafting the agreement and tips on avoiding common pitfalls.  More information will be available on our website in the near future.

November 2, 2017

QUESTION:        We have several clinical departments that have either weak chairs or chairs who are there entirely by “default.” These individuals are relied upon to perform a really important role.  How can we get stronger leaders interested?

ANSWER:            In many hospitals, it has been traditional to rotate the department chair position so that everyone gets his or her turn.  However, not every physician, quite frankly, has an aptitude for, or interest in, medical staff leadership.

One answer might be to develop stronger qualifications for serving in medical staff leadership roles, including officers and department chairs, and to provide for compensation for department chairs.  Another question to ask is if there are too many departments.  Consider consolidating departments.  By having fewer positions to fill, you then have a larger pool of qualified people who want to serve.

Finally, many hospitals are facing this very issue and are tackling it head on by incorporating an affirmative “succession development” process.  In these facilities, a small core group of medical staff leaders has an ongoing responsibility for identifying individuals who seem to show an aptitude for leadership and cultivating those skills – beginning with committee appointments and then moving them forward in the leadership track.