Contract Issues

AAEM Alerts the JCAHO to the Dangers of EM Contracts

The following letter was sent to Dennis O'Leary, MD, president of the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) on July 19, 1999. In it, AAEM president Robert McNamara, MD FAAEM, argues persuasively on behalf of the AAEM Board of Directors, urging the JCAHO to include in its review activities the examination of all contracts which relate to services provided by emergency physicians.

Dear Dr. O'Leary:

The American Academy of Emergency Medicine (AAEM) would like to bring to your attention the widespread denial of due process to emergency physicians (EPs) who work for contract management organizations (CMOs) who in turn contract their services to hospitals. These CMOs range in size from those with a national scope that trade on the major stock exchanges, to medium-sized regional ones, to those controlled by a sole individual at one location. Consider carefully the following section from an actual contract between an EP and his employer CMO:

"An employee whose services are terminated by this CMO shall be entitled to due process protection afforded members of the medical staff as set forth in the bylaws. However, employee agrees to resign his medical staff membership and clinical privileges and waive any and all hearing and appellate review rights afforded under the medical staff bylaws if his agreement with this CMO is terminated for any reason."

Contractual denials of due process as evidenced by this example run rampant in employment agreements in the specialty of Emergency Medicine. Furthermore, contracts, which on the surface appear fair and equitable, still may not provide the EP due process protection. This situation occurs when a physician is removed from the work schedule and yet remains a member of the medical staff. With no shifts to work such actions are tantamount to termination-termination without recourse. As CMOs have a dominant position in the control of jobs in the specialty of Emergency Medicine, a physician who refuses to sign such contracts faces unemployment. Clauses that waive contractual rights to due process should be prohibited.

The relationships between providers in our healthcare system are growing and complex. Years ago the overwhelming majority of physicians were in private practice. Nowadays, many physicians and virtually all emergency physicians find themselves working for various third parties. These new relationships have created conflicts with regard to an EP's ability to provide quality medical care. Emergency Medicine practice is high paced, pressured, and dynamic. EPs routinely make hundreds of decisions on any given shift. Frequently they are the only ones in the position to decide what test, procedure, or treatment is necessary. Such an environment does not always lend itself to the type of relationships common to other spheres of medical practice.

A major consequence of this is that the EP is sometimes caught between doing what is medically best for the patient and what may be necessary to preserve his good graces with private physicians, hospital administrators, and, by direct extension, the CMO, who may terminate him on a whim. The existence of this situation strains the EP's ability to deliver the highest possible medical care because he may find himself in a situation where his medical integrity conflicts with self-preservation interests. When a physician cannot be honest with a patient, the relationship is compromised, and the patient is victimized. This situation directly ties in with the JCAHO's own mission statement- ".To improve the quality of healthcare provided to the public through the provision of healthcare accreditation and related services that support performance improvement in healthcare organizations."

AAEM believes that the JCAHO should include in its review activities the examination of all contracts which relate to services provided by emergency physicians. Such contracts typically involve those between the EP and CMO and the CMO and the hospital. Other hospital-based physician contracts (those for radiologists, anesthesiologists, and pathologists) should be similarly scrutinized. Furthermore, AAEM believes that contracts that abrogate due process should not be tolerated by the JCAHO as they interfere with an EP's ability to provide quality medical care.

Contracts are an important part of the "software" by which medical care is delivered and deserve the same critical review and high standards as the other areas traditionally monitored by the JCAHO. Good policies and procedures matter little if the physician is hindered in his ability to act in good faith. An EP's ability to provide medical care should not be adversely influenced or restricted by the terms of his employment.

In summary, AAEM respectfully challenges the Joint Commission to ask its Professional Standards Advisory Committee to change the due process rules so that all members of a JCAHO-accredited facility's medical staff enjoy the same rights and privileges regardless of whether they are a private attending, work for the hospital, or are employed by a CMO. Furthermore, such medical staff privileges should not be altered, restricted, or denied by contractual terms as discussed in this letter.

Sincerely yours,

Robert M. McNamara, MD FAAEM, President
on behalf of the Board of Directors of the
American Academy of Emergency Medicine

The JCAHO Responds-Supporting Rights of Due Process

As noted above, AAEM wrote the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) on July 19 to urge them to include in its review activities the examination of all contracts which relate to services provided by emergency physicians. Reproduced below is the JCAHO's August 26 letter of reply, in which JCAHO president Dr. Dennis O'Leary, clearly confirms an emergency physician's right to a fair hearing an appeal.

Dear Dr. McNamara:

I am responding to your letter to me dated July 19, 1999, which expresses your concerns about certain types of contracts between contract management organizations (CMOs) and emergency physicians (EPs). These contracts provide that a CMO can terminate an EP and eliminate his or her medical staff bylaws rights for a basic hearing and appeal process at the hospital to which the physician has been assigned by the CMO. You specifically ask that we share your concerns with our "Professional Standards Advisory Committee." Your letter will be provided to our Hospital Professional Technical and Advisory Committee to consider the issues you raised at its next meeting during the first quarter of 2000.

I would meanwhile like to comment on the issues you have raised, and how our standards relate to them. First, Joint Commission standards are not designed to regulate relationships among providers. Rather, they focus on protecting and improving the quality of care provided to patients. In this context, we ordinarily do not intervene in the development of contractual relationships between health care providers. Indeed, the standards do not prohibit exclusive contracts. Thus, if a hospital has an exclusive contract with an EP group, or an anesthesia group, or a radiology group, our standards do not bar the hospital from changing from one exclusive group to another. This assumes that the hospital, in making this decision, has sought and obtained input from its medical staff, and, has further properly credentialed and privileged the practitioners in the new exclusive group. However, where such exclusive contracts exist, the entitlement to provide care in the hospital lies with the contracting group, not its individual members.

At the same time, if the medical staff in a hospital acts to discontinue or curtail the privileges of a physician who is part of a CMO, that physician is entitled to a fair hearing and appeal. Such a hearing and appeal process, which may rise to the level of the governing body, is expected to explore all of the quality-of-care-related issues bearing on the medical staff action. Again, however, the standards related to this process accord primacy to the quality of care provided to patients. The entitlement of the physician is only to demonstrate that his or her performance has conformed to this objective.

This is obviously a complex subject, and you may find this response to be cryptic in certain respects. Please feel free to call me if you would like to discuss this further. Otherwise, we will await the deliberations of our Hospital Professional and Technical Advisory Committee.

Sincerely,

Dennis S. O'Leary, MD
President, JCAHO

AAEM will be sure to follow-up with the JCAHO's Hospital Professional and Technical Advisory Committee after their meeting in the first quarter of 2000.