Synergy - March/April 2013 - 13

industry feature

Discrimination Act, the Age Discrimination
in Employment Act, the Americans with
Disabilities Act, the Uniformed Services
Employment and Reemployment Rights
Act, the Family and Medical Leave Act, the
Genetic Information Nondiscrimination
Act, and (potentially) the National Labor
Relations Act — in addition to your state’s
anti-discrimination laws and workers’
compensation laws . Employer-provided
pension and benefit plans apply, and
employee handbooks apply to physicians as
well (unless your organization is able to alter
this pursuant to contract or employment is
structured through a separate corporation
and a separate handbook applies) . Physician
employees are often surprised by the fact
that the employee handbook applies to
them (sometimes pleasantly surprised
because it provides the physician with more
rights, but sometimes unpleasantly surprised
because it holds the physician to a higher
standard than they have been subject to in the
past) . Not surprisingly, hospitals (as employers)
are also often startled to realize that their
physicians are employees and are subject to
such employment protections and constraints .
Healthcare lawyers may rest assured that the
fact that all these employment laws apply
does not mean that hospitals no longer need
be concerned with the various healthcare
laws that govern a healthcare entity/
physician relationship . The following laws,
among others, are still present and entirely
applicable: the Physician Self-Referral Law
(the Stark Law, which has an employmentspecific exception that must be met),
the Anti-Kickback Statute (which has an
employment-specific safe harbor that the
hospital should consider meeting), the
False Claims Act (which will now apply to
billings on behalf of both the hospital and
the physician), Internal Revenue Service
laws regarding tax-exempt organizations
and reasonable compensation (which can
jeopardize the hospital’s tax-exempt status if
the hospital is overcompensating physicians),
and (potentially) antitrust regulations
(depending upon the hospital’s market share
and competitive activities) .
In the midst of trying to balance all of these
competing and equally controlling interests,
regulations and requirements, the hospital
must still keep its eye on the ball . At the
end of the day, the hospital’s mission is to

provide quality care to patients through
the employment of competent healthcare
providers — those who provide quality care
through clinical expertise, effective patient
management and appropriate professional
behavior and communication skills . To
achieve this goal, a hospital should ask itself
this question: if the purpose of peer review
on the medical staff side is to assure quality
patient care, is it not equally important
to have peer review on the employment
side? (Especially when the hospital, as
employer, is now facing both vicarious
liability and possible negligent credentialing
claims .) And if a mainstay of peer review
is confidentiality (in order to encourage
open and candid discussions), what steps
does a hospital need to take to assure that a
sharing of information policy (or a sharing of
information agreement, depending upon the
parties involved) is in place and followed?
Such a policy must deal with: (1) who
keeps what type of information; (2) who
shares what information with whom; and
(3) who is best equipped to handle an issue
regarding an employed physician when that
issue arises .

physician’s employment file — or will be
kept elsewhere (and be able to explain
why the physician employee has a different
standard) .
The second step is to be sure the hospital
has a clear understanding of what
information is maintained in MSS files .
Depending upon the state’s peer review
privilege, a decision should be made as
to what information is protected by the
privilege versus what information is not
protected . Steps should also be taken
to ensure that no matter who pulls an
employed physician’s MSS file, it will be
clear what information can be shared
with others (without losing peer review
protection) versus what information cannot
be shared with others .
The third step is to assess what information
is (or has historically been) shared between
HR (or the Recruiting Office) and MSS and
whether this sharing is appropriate to the
hospital’s goals . Consider what information
is currently protected, how it is protected
(by the peer review privilege or other
protections), and what the hospital needs

At the end of the day, the hospital’s mission is
to provide quality care to patients through the
employment of competent healthcare providers
— those who provide quality care through
clinical expertise, effective patient management
and appropriate professional behavior and
communication skills.
The balance of this article is designed to
help you navigate these issues .
The first step is to determine what
information is maintained by HR for
all employees (both physician and
non-physician) . Once determined, assess
whether the current structure makes
sense . For example, if the hospital has
historically maintained all disciplinary
action in employment files, decide whether
that same information will be kept in a

to do to maintain that protection . At a
minimum, consider the following types of
information and who needs to see each:
physician qualifications, peer references/
reference letters, information gathered
from phone calls and criminal background
checks, among others .
Keep in mind that although this information
may maintain its protection if distributed out
of a central verification office to separate
offices (e .g ., HR and MSS), the information
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Synergy - March/April 2013

Table of Contents for the Digital Edition of Synergy - March/April 2013
