The Centers for Medicare & Medicaid Services (CMS) published its final revisions (“Final Rule”) to the Medicare Conditions of Participation (CoPs) on May 12, 2014. Among other things, CMS proposed to revise its current interpretation of the hospital medical staff composition at 42 C.F.R. § 482.22 and modified the prohibition on the use of a unified and integrated medical staff for a multi-hospital health system.

In the May 2012 final rule, CMS required that each hospital have its own independent medical staff. After publication of the 2012 final rule, it was brought to CMS’ attention that the language set forth in § 482.22 may “have led some stakeholders to interpret § 482.22 as allowing for separately certified hospitals, as members of a multi-hospital system to share a unified and integrated medical staff” and that some health systems had indeed implemented a unified medical staff. Based on the examination of already-existing unified medical staffs, CMS decided to reverse its current position. In short, the Final Rule regarding the unified medical staff states as follows:

• Only hospitals that are part of a multi-hospital health system can opt to form an integrated medical staff.
• All voting members of the medical staff must vote, in accordance with their medical staff bylaws, to either accept a unified and integrated medical staff structure or opt out of such a structure and to maintain a separate and distinct medical staff for their respective hospital.
• The unified medical staff must adopt bylaws that include a process whereby the voting medical staff members of each hospital are advised of their right to opt out and to return to a separate and distinct medical staff.
• The unified medical staff is 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.
• The unified medical staff gives due consideration to the needs and concerns of members of the medical staff, regardless of practice or location, and the unified medical staff has a mechanism in place to ensure that issues localized to particular hospitals are duly considered and addressed.

CMS stated that many hospital systems had been using the unified medical staff model for years without evidence that such system was detrimental to patients or decreased the quality of care delivered. In fact, CMS noted that a unified medical staff could increase opportunity to improve the peer-review process, improve patient safety through shared credentialing and privileging, lead to more efficient sharing of knowledge and innovations among medical staff members, better physician on-call coverage for specialties, consistency with the move toward accountable care organizations and modern care delivery systems, and more efficient coordination of emergency preparedness and community health planning.
Not everyone is on board with this change. In a letter dated June 3, 2014, the American Medical Association (AMA) expressed its disdain to CMS on the implementation of the unified medical staff and requested that CMS delay the implementation until May 2015. The AMA stated the unified medical staff concept was “an ill-conceived policy that will disenfranchise physicians and hinder their input into hospital programs, especially for those physicians in rural or geographically distant hospitals.”

CMS declined to push the go live date back. The new rule will take effect on July 11, 2014.

As noted in the AMA’s letters to CMS, questions remain as to the practical effect of implementing a unified and integrated medical staff. If the medical staff votes to opt into this medical staff structure for a health system that spans multiple states, would the physicians be required to be licensed in each state in which the hospital provides services? Which state’s peer review statute prevails? How exactly should the opt-in/opt-out process work? Can the medical staff opt-in and opt-out at any time? Many issues remain unclear at this time. CMS has stated that it will issue guidance as soon possible related to the questions posed above.

In the meantime, health system administrators should begin thinking about reviewing the current medical staff bylaws of each hospitals in the system to determine how the opt-in/opt-out process will take place. Hospitals should begin preparing to amend their bylaws in response to these changes and determine what to do in order to form a truly “unified” medical staff if current medical staff members vote to opt-in. The question remains: is one medical staff really better for a health system?

For further assistance on these issues, please contact one of our healthcare attorneys.