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HOSPITAL ACCREDITATION ­ ALTERNATIVES TO THE JOINT COMMISSION By Barbara Blackmond1

I.

INTRODUCTION

Hospital executives, Board members, physician leaders and counsel often used to take accreditation for granted. Some even assumed ­ mistakenly ­ that it was required for Medicare reimbursement. Now hospitals have three options for accreditation and a fourth option forgoing accreditation. Accreditation is voluntary.

This paper is intended not to recommend any particular option but to review factors that hospital leaders and counsel may want to consider going forward. Decisions on whether to seek and maintain accreditation and, if so, by which entity, should be carefully made after discussions among Board, management and physician leaders, in light of the hospital's resources and mission. The goal should be to identify the option that will best help the organization provide safe care to the community it serves.

II. A.

RECENT DEVELOPMENTS IN "DEEMED STATUS" All hospitals are subject to the Centers for Medicare & Medicaid Services

("CMS") regulations called the Medicare Conditions of Participation ("CoPs"). 42 C.F.R.

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Phil Zarone, a partner with Horty, Springer & Mattern, contributed to this article.

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Section 482.1 et seq. Under the Social Security Act, CMS may recognize national accreditation organizations which demonstrate that their health and safety standards, and their survey and oversight processes, meet or exceed those used by CMS for the CoPs. 42 U.S.C. Section 1395x(e)(ii). When the Medicare Program was created in 1965, Section 1865 of the Social Security Act, 42 U.S.C. §1395bb, stated that hospitals accredited by The Joint Commission were "deemed" to meet most of the requirements set forth in the CoPs for participation in Medicare. Other organizations were permitted to apply for approval. The American Osteopathic Association did so immediately for its Health Facilities Accreditation Program ("HFAP"). In 2008, the first additional (73 Fed. Reg. 56588

organization received approval, DNV Healthcare Inc. (September 29, 2008).)

A health care facility that is accredited for Medicare participation purposes by one of the CMS-recognized accrediting organizations is "deemed" by CMS to have satisfied the Medicare CoPs. For such facilities, the State Survey Agency does not conduct a survey to certify or recertify the compliance of the facility with the applicable CoPs.

B.

A new statute that was signed into law on July 15, 2008 removed the statutory

reference to The Joint Commission, effective July 15, 2010. This means that The Joint Commission will have to apply for deemed status and be approved by the federal government, just like all other accreditation programs.

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Under a transition provision in that new law, The Joint Commission's hospital deeming authority remains in force through July 15, 2010. Until that date, CMS will accept a hospital's evidence of Joint Commission accreditation as sufficient for Medicare deemed status. This applies to hospitals currently enrolled in Medicare as well as those seeking initial enrollment.

Also, the new statute provides that, even after July 15, 2010, a hospital whose participation was based on Joint Commission accreditation issued prior to that date will continue to participate in Medicare via deemed status until the normal expiration date of its accreditation. As an example, a hospital could have its Joint Commission

accreditation renewed for three years on July 10, 2010. In this scenario, the hospital's Medicare deemed status participation would continue until July 10, 2013, unless its deemed status is removed as a result of a validation survey.

III.

BACKGROUND ON THE JOINT COMMISSION

The Joint Commission (formerly Joint Commission on Accreditation of Healthcare Organizations or "JCAHO") is a private, nonprofit corporation that accredits a majority of hospitals (over 90%) nationwide and other types of healthcare organizations.

The Joint Commission is governed by a Board of Commissioners with a majority of its members appointed by physician groups. The largest number of those is appointed by the American Medical Association, and others are appointed by the American College of

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Physicians, the American Society of Internal Medicine and the American College of Surgeons ("ACS"). The American Dental Association appoints one member. A minority of Board members are appointed by the American Hospital Association ("AHA"). There are six public members and one at-large nursing representative. In addition, The Joint Commission president is an ex-officio member of the Board.

The Joint Commission traces its roots to 1910, when Dr. Ernest Codman proposed an "end result system of hospital standardization." In 1918, the ACS began on-site surveys of hospitals using a single-paged document titled "Minimum Standards for Hospitals," which included five quality criteria. In the early 1950s, ACS began negotiating to have the AHA take a more active role in the assessment of hospitals. Other organizations expressed an interest in these negotiations, and The Joint Commission was formed in 1951 to include representatives of ACS, AHA, the American College of Physicians, the Canadian Medical Association, and the American Medical Association.

IV.

WHY CONSIDER ALTERNATIVES TO THE JOINT COMMISSION?

The Joint Commission has accomplished much good and has helped improve quality. However, many hospital leaders, boards, management, medical staff and their counsel have felt frustration over some of its actions and processes. In the experience and opinion of this author, these fall into two general areas.

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A.

Cost

Beyond the direct cost of surveys and fees of Joint Commission accreditation, there are indirect costs in terms of the human resources devoted to survey preparation and related tasks. However, there is also a cost involved with other accreditation options.

B.

Ability to Innovate?

Some physician leaders and their counsel feel that The Joint Commission's standards have become too prescriptive. One very visible example was The Joint Commission's 2007 iteration of Standard MS.1.20 (as of January 1, 2009, Standard MS.1.20 has been renumbered to MS.01.01.01). After five years of varying versions, pronouncements and field reviews, a task force process is still underway as of the date of these materials.

Essentially, the 2007 version of MS.1.20 dictated which provisions must be in the Medical Staff Bylaws, and adopted and amended only by a vote of the full Medical Staff, and which provisions may be in related policies that may be adopted and amended by the Medical Executive Committee ("MEC"). Many physician leaders and their counsel feel that if a Medical Staff has chosen through its exercise of self-governance to empower its leaders to amend documents, The Joint Commission should not second-guess that choice. Each organization should be free to decide how best to accomplish its performance improvement functions in its unique culture, and to innovate, so long as it meets the basic CMS substantive requirements.

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V. A.

ADVANTAGES OF ACCREDITATION BEYOND DEEMED STATUS? Insurers and other third parties. In some cases, accreditation may be required to

participate in managed care plans or to bid on contracts.

B.

Discount on insurance. On its website, The Joint Commission lists a number of

liability insurers who offer a discount to organizations that are accredited.

C.

Possible state regulatory advantages.

Accreditation may fulfill regulatory

requirements in select states. A few examples include the following (but because there are many, counsel should research state law carefully):

(1)

Some state laws require certain types of health care providers to be accredited.

See, e.g., Ga. Comp. R. & Regs. r. 290-5-10-.01 ("Criteria for Certification as Cancer Treatment Facility"); Ohio Admin. Code §3701 43-04 ("Program for Medically Handicapped Children"); Del. Admin. Code 40 800 113 (Inpatient Rehabilitation Hospitals (In State and Out-of-State Facilities)).

(2)

Even if accreditation by The Joint Commission or some other accrediting

organization is not required, it may spare hospitals the need to undergo surveys to assess compliance with state hospital licensing regulations, or at least diminish the frequency of such surveys. See, e.g., Ala. Admin. Code 22-21-24.; Md. Code Ann. Health §§ 19-

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308(b)(1) and (2).; Mont. Code Ann. § 50-5-103(4).;

N.C. Admin. Code 10A, r.

13B.3106.; Tex. Health & Safety Code ANN. § 222.024; Va. Code Ann. § 32.1-125.1..

(3)

Accreditation may be beneficial to help defend negligent credentialing suits.

a.

Courts in Georgia have considered Joint Commission accreditation in negligent

credentialing suits. Butler v. South Fulton Med. Ctr., 452 S.E.2d 768 (Ga. Ct. App. 1994). b. An Ohio statute, §2305.251, provides in pertinent part: (B)(1) A hospital shall be presumed to not be negligent in the credentialing of an individual who has, or has applied for, staff membership or professional privileges at the hospital pursuant to section 3701.351 of the Revised Code, and a health insuring corporation or sickness and accident insurer shall be presumed to not be negligent in the credentialing of an individual who is, or has applied to be, a participating provider with the health insuring corporation or sickness and accident insurer, if the hospital, health insuring corporation, or sickness and accident insurer proves by a preponderance of the evidence that, at the time of the alleged negligent credentialing of the individual, the hospital, health insuring corporation, or sickness and accident insurer was accredited by one of the following: (a) (b) (c) (d) The joint commission on accreditation of healthcare organizations; The American osteopathic association; The national committee for quality assurance; The utilization review accreditation commission.

(Emphasis added.)

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VI.

NEED FOR A VALIDATION SURVEY

Even though a hospital might be accredited by an organization with deeming authority, it may still be surveyed by CMS. CMS conducts random surveys of hospitals that have been accredited by an organization with deeming authority to validate the work being done by the accrediting organization.

There are two types of validation surveys: 1. surveys conducted on a representative sample basis, which may be either

comprehensive surveys of all Medicare conditions or focused surveys on a specific condition or conditions; or

2.

surveys in response to a "substantial allegation" ­ generally a complaint. These

surveys focus on those Medicare conditions related to the allegations.

Hospitals cannot refuse to allow a validation survey to take place. If a hospital refuses, it will no longer be deemed to meet the CoPs and will be subject to a full survey. Also, 42 U.S.C. 1395bb states that deeming does not apply with respect to "any standard, promulgated by the Secretary [of Health and Human Services]...which is higher than the requirements prescribed for accreditation" by The Joint Commission.

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VII.

HEALTHCARE FACILITIES ACCREDITATION PROGRAM

HFAP, established in 1945, also has "deeming" authority going back to the beginning of Medicare. Thus, hospitals that meet HFAP's requirements are deemed to comply with most requirements for participation in the Medicare program. HFAP accredits both osteopathic and allopathic hospitals. The AOA transferred administrative responsibility for its HFAP to the American Osteopathic Information Association ("AOIA"). According to its web site: The business oriented functions of the HFAP have been moved from a membership organization structure to a business organization structure. The HFAP accreditation activities and decisions, however, will remain the responsibility of the AOA and its Bureau of Healthcare Facilities Accreditation (BHFA). This administrative restructuring has been approved by the Centers for Medicare and Medicaid Services (CMS). The AOIA was founded in 1999 by the AOA as a separate 501(c)(6) association responsible for primary source physician credentialing services and information technology activities. The AOIA has the resources and business experience to accomplish three main objectives for improving HFAP: first, to make HFAP more nimble and responsive to its stakeholders; second, to improve and computerize the program's paper-based processes; and third, to greatly expand awareness and usage of HFAP accreditation through enhanced marketing activities.

HFAP standards are similar to many of The Joint Commission's standards, but are shorter in some areas.

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VIII.

CHOOSING NOT TO BE ACCREDITED

In the past, it was more common for smaller hospitals to choose to forego accreditation, often for financial reasons. This has begun to change in recent years, albeit slowly, as it appears that more larger hospitals are foregoing accreditation.

If a hospital is not accredited, CMS/State Agency surveys will be conducted. The details of these surveys are described in the Medicare State Operations Manual. In some states, state agencies may not want to see more hospitals drop accreditation because they fear an increased burden. In states such as Pennsylvania, all hospitals are already subject to comprehensive state licensure surveys, with detailed state regulatory requirements, so forgoing accreditation by The Joint Commission would mean little, if any, change.

Hospitals choosing to forgo accreditation can avoid the direct and indirect costs associated with accreditation, while gaining more flexibility to innovate than would be the case with The Joint Commission. Hospitals must, of course, satisfy the Medicare COPs. However, in the case of Medical Staff functions, it may be possible to have an easier and less cumbersome amendment process for Bylaws documents and how clinical input is obtained for patient safety initiatives.

What should hospitals consider if they're thinking about dropping accreditation and relying instead on surveys by government agencies, or if they're thinking of switching from one accrediting program to another?

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A.

State law.

Is accreditation by The Joint Commission or other organization

required, or is there a regulatory advantage or legal advantage in corporate negligence suits?

B.

Contracts. Do contracts with payors and other vendors require accreditation by

The Joint Commission or any other accrediting organization?

C.

Services needed. Does the accreditation organization accredit all the entities the

hospital or system want accredited?

D.

Other potential business considerations. What are the direct and indirect costs?

What are you getting for your money? Impact on quality? Public relations? Access to capital?

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