Rule revamp: Hospitals get governing choice
Bringing hospitals from the Madonna era into the Lady Gaga era is how some staff at the American Hospital Association refer to the first major update of Medicare’s conditions of participation for hospitals since 1986.
In a final rule issued this month, the CMS made changes to more than a dozen conditions that Medicare-enrolled hospitals must follow starting July 16. The agency issued the regulation along with the Medicare Regulatory Reform rule in response to a broad initiative President Barack Obama announced last year to streamline or eliminate federal regulations.
Together, the regulations are expected to save about $1 billion across the nation’s healthcare system in the first year and more than $5 billion over five years.
“Generally, CMS does issue little piecemeal revisions,” said Sandra Divarco, a partner at Mcdermott Will & Emery in Chicago, referring to the Medicare conditions of participation rule. “The scope of these revisions was very broad and the governing body changes go to the heart of the conditions of participation because the result is a fundamental re-working of the governance and oversight models CMS permits.”
A key change to the governing body condition of participation gives hospitals the choice to have one governing body oversee a multihospital system.
Previously, each hospital had its own governing body to manage functions such as credentialing.
The new rule provides a spectrum from which hospitals can choose separate governing bodies, one body for the entire system, or something in the middle of those two options.
Divarco said many hospitals will likely choose the middle approach in which “subboards” at the member hospitals would oversee certain elements, such as quality efforts, but would make recommendations on other matters to the larger system governing board.
“It poses an opportunity for multihospital systems to evaluate how they want their governance to be structured,” she said.
A representative for the Joint Commission was not available for an interview, but the Oakbrook, Ill.-based accrediting organization responded to the rule with a statement that said the changes “mirror the Joint Commission’s policy of allowing one governing body to oversee multiple hospitals in a single health system, providing organizations the flexibility to determine the most effective governance structure to suit its organizational and business needs.”
The AHA is also pleased with the revision, said Nancy Foster, the association’s vice president for quality and patient safety. But Foster said the new rule fell short in applying a similar standard to medical staff structures.
“A number of health systems have very deliberately moved to unify their medical staff, believing they are able to better work with those staffs to ensure high quality, consistent care across the system,” Foster said, adding that an integrated medical staff allows a multihospital system to create efficiencies in administrative tasks such as credentialing and licensure. “And it enables them to draw on the expertise on a wider variety of physicians when they’re looking to conduct peer reviews, or consider, for instance, what decision support they will embed in the electronic health records.”
Last October, the CMS sought comment on this issue in its proposed rule and noted that some stakeholders reported that multihospital systems have integrated their governing body and medical staff functions to provide care more efficiently.
“We do not believe that the current medical staff COP language implies that we require a single and separate medical staff for each hospital within a multihospital system,” the proposed rule said. “Therefore, we have retained the current requirement without revision.”
This has led to confusion and frustration among hospital representatives such as the AHA.
“In the proposed rule, they said they looked at this issue of a unified medical staff along with a unified governing board, and it was their conclusion that it permitted a unified medical staff,” Foster said. “In the final rule, they did not change an iota of the language, but they came back saying their language does not permit a unified medical staff.”
At deadline, a CMS official was not available for an interview. Foster said the AHA will continue to talk with CMS officials about “the wisdom of allowing hospitals to have a unified medical staff.”
The American Medical Association supported the agency’s decision on that point.
“We are pleased that CMS adopted numerous AMA recommendations in the final Medicare conditions of participation rule, including a requirement that there be a single medical staff for each individual hospital,” AMA President Dr. Peter Carmel said in a statement. “The AMA strongly supported this change from the previous proposal, which would have allowed a medical staff to be used over a multihospital system. A self-governed and autonomous medical staff at each hospital is imperative to ensure the health and safety of patients.”