As part of its effort to streamline regulations and remove unnecessary or burdensome regulations, the Centers for Medicare and Medicaid Services (CMS) recently issued a Final Rule with revisions to the Conditions of Participation (CoPs) for hospitals participating in Medicare. Most notably, the Final Rule addresses a long-lingering issue regarding the use of a single-unified medical staff for hospital systems by providing that a unified medical staff is allowed if certain requirements are satisfied. CMS’s revisions to the CoPs are effective July 11, 2014.

Unified Medical Staff

By way of background, CMS stated in commentary to a final rule issued in May 2012 that it interpreted Medicare’s CoPs as requiring each hospital to have its own independent medical staff. This statement caused significant uncertainty for a number of health systems that have for some time operated with a single unified medical staff for all of the system’s hospitals. Following the significant dialogue regarding CMS’s comments, CMS issued a proposed rule in February 2013 that would have expressly required each hospital to have a separate medical staff. In response to the proposed rules, a number of commenters noted the burdens the proposed rule would impose as well as the benefits of a unified medical staff (e.g., success in reducing hospital- acquired conditions and readmissions, among other benefits). Now, in a departure from CMS’s comments in May 2012 and the proposed rule, the Final Rule allows health systems to have a unified medical staff if certain requirements are satisfied as follows:

1. The medical staff members of each separate hospital must have voted by majority to either: (1) accept a unified and integrated medical staff structure, or (2) opt out of the unified structure and maintain a separate medical staff for their hospital.

2. The unified medical staff must have bylaws, rules and requirements that describe its processes for self-governance, appointment, credentialing, privileging and oversight, as well as its peer review policies and due process guarantees for the medical staff. The bylaws, rules or requirements must include a process for the medical staff members of each separate hospital to be advised of their rights to opt out of the unified and integrated medical staff structure after a majority vote by the members at the hospital.

3. The unified medical staff must be established in a manner that takes into account each hospital’s unique circumstances and any significant differences in patient populations and services offered in each hospital.

4. The unified medical staff must establish and implement policies and procedures to ensure that the needs and concerns expressed by the members of the medical staff at each of its separate hospitals are given due consideration. The unified medical staff issues local to a particular hospital are duly considered.

Other Revisions to Medicare’s Conditions of Participation

In addition to the unified medical staff issue, the Final Rule addresses a number of additional items. Below is a summary of some of the notable items:

• Consultation with Medical Staff. The Final Rule eliminates the requirement (added in 2012) for a hospital’s governing body to include a medical staff member. Instead, the governing body must consult directly with the individual responsible for the organization and conduct of the hospital’s medical staff (or his or her designee). CMS clarifies in its discussion of the Final Rule that "direct consultation" means that the governing body (or subcommittee) meets with the medical staff leader(s) face-to-face or via a telecommunications system that permits immediate, synchronous communication. The direct consultation must include a discussion of matters relating to the quality of care provided to patients at the hospital.

  For systems that have a single governing body overseeing multiple hospitals, the governing body must consult with the individual responsible for the organized medical staff at each hospital. The governing body may consult with multiple leaders simultaneously as long as the discussion includes matters relating to the quality of medical care provided to patients of each hospital.

  The Final Rule provides that the consultation must occur periodically throughout the year. The governing body has some flexibility to determine the frequency of the consultations, but CMS has suggested that it expects the consultations to occur at least twice per year.

• Orders for Hospital Outpatient Services. The Final Rule allows practitioners who are not on the medical staff to order hospital outpatient services for their patients when authorized by the medical staff (and allowed by state law). Specifically, the revised CoPs provide that outpatient services must be ordered by a practitioner who: (1) is responsible for the care of the patient; (2) is licensed by the state where he or she provides care to the patient; (3) is acting within his or her scope of practice; and (4) is authorized in accordance with state law and policies approved by the medical staff to order the outpatient services. Notably, the CoPs do not allow a practitioner to provide care at a hospital without medical staff privileges, but just allow hospitals to permit practitioners who are not on the medical staff to order outpatient hospital services.

  In its commentary to the new rule, CMS stated that the above requirements would apply to all hospital outpatient services, including services such as myocardial infusion scans, hepatobiliary scans and administration of chemotherapy, for which existing regulations would otherwise appear to impose more stringent limits on who may order the service. CMS notes, however, that hospitals have flexibility to determine whether or not they will allow a practitioner who is not a member of the medical staff to order outpatient services. In other words, the new CoPs do not require hospitals to accept orders for outpatient services from practitioners who are not on the medical staff, but may decide that they will accept such orders from practitioners who satisfy the above requirements for ordering the services.

• Composition of the Medical Staff. The Final Rule clarifies that a hospital’s medical staff must be composed of doctors of medicine or osteopathy, but may also include (if permitted by state laws) other categories of physicians (e.g., dentists, podiatrists, optometrists and chiropractors) and non-physician practitioners as determined by the governing body. A recent law enacted in Wisconsin also provides that a hospital may grant any practitioner to be a member of the hospital staff and obtain hospital staff privileges if such membership or privileges are consistent with the practitioner’s scope of practice and not prohibited by the Medicare CoPs.

• Radiological Services Provided by ASCs. The Final Rule simplifies the requirements that Ambulatory Surgery Centers (ASCs) must satisfy in order to furnish radiological services.

• Privileges for Registered Dietitians. The Final Rule allows hospitals to privilege registered dietitians and other clinically qualified nutrition professionals to order patients diets.

• Off-Hour Nuclear Medicine Tests. The Final Rule eliminates the requirement for a physician to be present during the delivery of off-hour nuclear medicine tests.

• Critical Access Hospitals. The Final Rule makes several changes for critical access hospitals (CAHs). First, the Final Rule eliminates the requirement for critical access hospitals to develop patient care policies with the advice of at least one member who is not a member of the CAH staff. Second, the Final Rule eliminates the requirement for CAHs, rural health clinics (RHCO) and federally qualified health centers (FQHCs) to have a physician on-site at least once in every two-week period. CAHs, RHCs and FQHCs will still have to have a physician on-site for "sufficient periods of time" based on the needs of the facility and its patients.

Alignment of DHS Rules With the CoPs

As noted above, the revisions to the CoPs are aimed in part at streamlining regulations and reducing burdensome rules. Wisconsin, too, has recently made changes to help streamline the laws governing hospitals. Wisconsin recently enacted a law which will align Wisconsin’s requirements for hospitals with Medicare’s CoPs. Specifically, beginning as of July 1, 2016, Wisconsin’s Department of Health (DHS) Services must use the Medicare CoPs as the minimum standards that apply to hospitals in Wisconsin. Under the new law, DHS must repeal DHS 124 (the regulations applicable to hospitals in Wisconsin) and recreate the rules in DHS 124, if necessary. We will continue to monitor Wisconsin law for any changes to DHS 124.