Master Physician-Hospital Contracting: Federal, State Regulation and Peer Review Intricacies

The relationship between hospitals and physicians who work in them is complicated. Employment laws apply, obviously, but in addition to the usual issues of hiring, firing, supervision, and work expectations, physicians are subject to extensive regulation, professional ethics, state licensure and government reporting. Further, all physicians who provide patient care in a hospital are members of the hospital’s medical staff. Medical staffs are also highly regulated, by state and federal law, and in accredited hospitals the overwhelming majority subject to specific accreditation standards.

How these complicated matters combine is a relatively recent question. Traditionally, physicians in the United States admitted their patients to hospitals without the entanglement of being hospital employees. Physicians billed their patients directly, as did hospitals, separately. Medical staff organizations determined what physicians could have clinical privileges to admit and care for patients in a hospital, setting standards for membership, clinical competence, and professional conduct. But as medical practice became more complicated, independent practice became more untenable for many physicians. Obtaining third party payment contracts from health plans, staffing an office and clinic, purchasing and maintaining expensive sophisticated medical equipment, running an efficient billing system, and taking on the cost of electronic medical record systems for a single physician office or small group clinic typically makes no financial sense. The hurdles are complicated for hospitals also, but local and federal support, nonprofit status, and simple economy of scale has led to hospital employment of physicians as a common practice. The shock and burden of the COVID-19 pandemic became the final straws. Now, the overwhelming majority of physicians working in American hospitals do so as employees of the hospitals.

As a relatively novel matter, hospital employment contracts can be challenging to prepare and to understand, leaving both employer and employee subject to uncertainties. Where contracts create uncertainties, litigation often follows. A major disconnect in the hospital-employed physician arrangement is the effect of the medical staff organization. Hospital medical staff governing documents the bylaws, rules and regulations and medical staff policies may be silent regarding any employment relationships. Or, the hospital medical staff governing documents may address limitations on physicians who are hospital employees, or may guarantee certain protections and rights to physicians employed by the hospital. Hospital administration may or may not be adequately familiar with the medical staff organization’s positions regarding hospital employees on the medical staff. Compliance officers and human resources staff may not be aware of the lines crossed by the employee handbook, or the compliance plan, when compared with the medical staff rules and regulations. An issue as basic as whether the hospital can hire and fire physicians as it does other employees does not have a straightforward answer. These are issues that come to light when the hospital employee is a physician member of the hospital medical staff.

Carefully considered employment contracts and well-coordinated policies can protect all involved, but the intricacies of peer review and state and federal regulation must be understood and implemented. This webinar provides an overview of the issues and possible solutions.

Learning Outcomes:

• Review compensation and contracting processes
• Minimize legal risks and ensure compliance with healthcare regulations
• Address differences and similarities in what physician employers and physician employees seek in employment arrangements and contracting
• Describe employment contract provisions that are most likely to cause tension between physician employers and physician employees
• Articulate how physician employers and physician employees can best negotiate contracts that work for both parties
• Consider peer review as a way of balancing fairness, immunities and quality improvement

Areas Covered in the Session:

• Federal? State? Which State? – Jurisdiction Matters
• Physician Advocate? – Experience Matters
• What Both Employers & Employees Are Looking At
  • Money
  • Time
  • Non-Competes
• Are Non-Competes Legal?
  • List of States Ban Non-Competes Currently
  • Didn’t FTC Ban Non-Competes?
• Physician Organizations Opportunities and Obligations
• Benefiting Both Physician and Hospitals
  • Professional Judgement
  • Peer Review Protections
  • Wellness
  • Diversity
• Physician’s Unfettered Right to Exercise Personal and Professional Judgment
• Peer Review Protections
  • For the Practice
    • Immunity for Review
    • Confidentiality for Review
  • For the Employed Physician
    • Review by Peers
    • Hearing Right
• Sample “Due Process” Provision
• National Practitioner Data Bank (NPDB)
  • For the Practice
    • Immunity for Review
    • Access to Reporting
  • For the Employed Physician
    • Hearing Rights
• NPDB Protocol
  • Investigation defined
  • Notice required
  • Individual Report Review
  • Mandatory Corrections
• Physician Wellness
  • Physician Health
  • Physician Burnout
  • Physician Impairment
  • Physician Suicide
• Coordinating Peer Review with Wellness
  • Appropriate
  • Effective
  • Transparent
• Federal Issues
  • Separate investigation from clinical evaluation
  • Protect leaves of absence
• State Issues
  • Committee Requirement
  • Confidentiality Qualifications
• DEI? AKA Helping Organizations Attracting Physicians
• Inclusion Checklist for Both Sides
• Physician Employer & Physician Employee Perspectives on Employment Contracting
  • Protects patient care
  • Limits liability exposures
  • Promotes Physician Wellness
• Hospital Employment Contract -Now Updated & Available from AMA

Recommended participants:

• Hospital Administrators
• Compliance Officers
• Medical Staff Leaders
• Medical Staff Office Managers
• Chief Medical Officers
• Health Care Attorneys
• Medical Staff President/ Chief of Staff
• Bylaws Committee
• Credentialing Committee
• Vice President of Medical Affairs
• Director of Medical Staff
• Medical Staff Attorney
• Hospital Counsel
• Credentialing Specialist
• Human Resources Professionals

Presenter Biography: