Conditions of Participation

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The Centers for Medicare and Medicaid Services (“CMS”) have periodically added to and revised the Conditions of Participation (“CoPs”), but have not reviewed the entire set of CoPs for Hospitals and Critical Access Hospitals (“CAHs”) for many years. Pursuant to Executive Order 13563, CMS recently undertook an analysis of the CoPs as a whole and revised them to remove “obsolete, unnecessary, burdensome, or counterproductive” provisions. The new set of CoPs, published on May 16, 2012 and slated to take effect on July 16, 2012, are estimated to create an annual cost savings of nearly $1 billion.

Some of the most significant changes to the CoPs are reviewed in detail below. Hospitals and CAHs should evaluate current operations and consider whether changes to policy or procedure are necessary or beneficial.

Governing Body (42 C.F.R. § 482.12)
Under the previous set of regulations, each hospital was required to have its own governing body, even if it was a member of a multi-hospital system. While the hospitals may continue this organizational structure, the new regulations give multi-hospital systems the option of having one governing body oversee multiple hospitals within the system, on the condition that at least one member of the hospital’s medical staff be included on the governing body in order to ensure communication and coordination between the single governing body and the medical staff of the individual hospitals. This structure is favored as promoting efficiency, effectiveness, and integration. Importantly, although CMS permits a single governing body, there are some federal and state laws that may require separate governing bodies. Since the CoPs do not preempt state or federal law, before implementing a change to the governing body, a review of other applicable law is advisable.

Medical Staff (42 C.F.R. § 482.22)
In the commentary accompanying the new CoPs, CMS states that the best model of care for hospital patients is an interdisciplinary team approach, in which non-physician practitioners provide a significant portion of routine medical care, freeing physicians to focus on more medically complex patients and leadership tasks. As a result, the new CoPs permit a hospital’s governing body to define the term “medical staff” to include non-physician practitioners such as Advanced Nurse Practitioners (“APRNs”) and Physician Assistants (“PAs”), to the extent consistent with state scope of practice laws. If a hospital chooses to define “medical staff” to include certain non-physician practitioners, revisions to governing documents, such as the medical staff bylaws, may also be necessary. CMS estimates that if only one-third of the hospitals utilize non-physician practitioners more aggressively, such use will result in an annual cost-savings of $330 million.

Standing Orders (42 C.F.R. § 482.24)
CMS has also added new provisions allowing hospitals to use pre-printed and electronic standing orders, order sets, and protocols for patient orders if the hospital ensures that the orders (1) are reviewed and approved by the medical staff and nursing and pharmacy leadership; (2) are consistent with nationally recognized guidelines; (3) are reviewed periodically and regularly by medical staff and nursing and pharmacy leadership; and (4) are dated, timed, and authenticated by a practitioner who is responsible for the care of the patient and who is authorized to write orders by hospital policy in accordance with state law. If a hospital chooses to utilize standing orders, it should align its policies and procedures to reflect these CoP requirements. CMS estimates that the use of standing orders will save time for physicians, non-physician practitioners, and nurses, resulting in an annual savings of over $86 million.

Outpatient Services Director (42 C.F.R. § 482.54)
Under the current CoPs, a hospital must have one individual provide leadership for all outpatient services departments at the hospital. CMS acknowledged in its commentary to the final rule that, since many hospitals have separate directors for each individual outpatient department, requiring a single overall Director of Outpatient Services position is duplicative and unnecessary. In the absence of this requirement, hospitals may want to evaluate their outpatient organizational structure and revise and clarify the roles of the individual departmental directors.

CAH Provision of Services (42 C.F.R. § 485.635)
The current CoPs provide that CAHs must furnish diagnostic and therapeutic services, laboratory services, radiology services, and emergency procedures directly by CAH staff instead of under contractual arrangements with other entities. CMS recognized that this requirement placed a large burden on CAHs because of their small size and often rural location. The new CoPs permit CAHs to provide these services under arrangements with entities such as community physicians, laboratories, or radiology services. Accordingly, CAHs may want to evaluate the manner in which they are currently providing these services and determine whether the utilization of outside providers would be beneficial.

If you have any questions regarding the revised CoPs, please contact Anna Long at 615-252-2353 or Jay Hardcastle at 615-252-2386.