Holland & Hart Healthcare Law Blog

“Barking” Radiologist Bites Hospital for $4 Million Dollars.

On March 4, 2008, this blog published a story about St. James Healthcare in Butte, Montana and its having obtained an injunction against a radiologist, Dr. Jesse Cole, enjoining him from allegedly threatening staff and contacting prospective radiologists being recruited to St. James. The article was entitled “Montana Court Muzzles Barking Radiologist.”  Well, the tide has turned and Dr. Cole has taken a bite out of the hospital and its parent company, the Sisters of Charity of Leavenworth Health System to the tune of $4 Million dollars.

 

ANOTHER STATE TAX EXEMPTION DECISIONS SEPARATES FROM “LIBERAL” FEDERAL DEFINITION OF CHARITABLE PURPOSE.

 

With perhaps some eye toward the Illinois decision in Provena Covenant Medical Center et al. v. Department of Revenue, 2010 WL 9668858 (2010), an Ohio appellate court affirmed the denial of property tax exemption to a dialysis company that had been granted a federal Section 501(C)(3) tax exemption, finding that the liberal standard adopted by the IRS had no impact on Ohio tax exempt statutes and precedent.    The case, Dialysis Clinic, Inc v. Levin, Slip Op. Ohio 5071 is a direct appeal from the Ohio Board of tax appeals.  The case is of interest because it reflects the direction in which Sen. Grassley and others have been pushing nonprofit hospitals in the Patient Protection and Accountable Care Act enacted into law in March of this year.

 

THE “MASSIVE REDISTRIBUTION OF WEALTH” AND 31 OTHER INTERESTING STATISTICS AFFECTING THE HEALTHCARE REFORM.

 The United States has undergone a massive redistribution of wealth in the last 30  years. In 1980 the top 1 percent of taxpayers reported 8.5 % of the nations reported income to the Internal Revenue Service. In 2008, the top 1 percent of taxpayers reported receiving 20% of the nation’s income. This and the following 31 other statistics provide an interesting foundation to review the PPACA and its alternatives.

HOSPITAL CONFLICT RESOLUTION POLICIES.

 

Most hospitals today have adopted policies for dealing with disruptive conduct within the hospital setting.  Most of these policies relate to forms of harassment, intimidation and violence.  There are of course the omnipresent “disruptive physician” policies that relate to physicians acting out in unprofessional manners like berating staff and throwing hissy fits generally.  There are many more subtle forms of conflict between hospital administration, its medical staff, its medical staff leadership and its governing body. The Joint Commission Standards have evolved with a growing focus on the resolution of conflict at all levels of a hospital organization, with the understanding that all dissension has the potential to affect patient safety and outcomes if left to fester.

 

JOINT COMMISSION MANDATES CHANGES IN HOSPITAL/MEDICAL STAFF COMMUNICATION EFFECTIVE MARCH 31, 2011.

 

In less than 6 months, March 31, 2011 to be exact, the new Joint Commission Standard for hospital medical staff bylaws, MS 01.01.01, will be implemented. The focus of the new standard is to improve communication and coordination among a hospital’s governing body, its medical executive committee and the hospital medical staff. The Joint Commission is actively sponsoring a more collaborative relationship and more definitive accountability among the groups by requiring certain processes to be included in the medical staff bylaws, in particularly those contained in Elements of Performance 12 -36 which are mandated.

 

The standards require greater transparency in process including, among others,  the method of selection, election and removing a member of the MEC by the medical staff ( EP 21), how the medical staff can remove MEC authority (EP 20) and the process for amending medical staff rules, regulations and policies (EP 25), the inclusion of peer review processes in the bylaws (EP 30, 31), and the delineation of qualifications and specific powers and responsibilities of any medical staff department.

 

EP 11 requires a process for the resolution of conflict between the medical staff, the MEC and or the Governing Body of a hospital. The Joint Commission in adopting MS 01.01.01 recognizes that efficient and effective patient care and safety require the effective interplay between these constituent entities within the hospital and that there must be some reasonable process to stimulate communication, allocate responsibility and overcome dysfunctional behavior in the management of hospitals. SEE www.jointcommission.org.

 

BRING ENOUGH “CHARITY” IN HUNT FOR HOSPITAL TAX EXEMPTION?

 

Robert Ruark, the novelist and big game hunter, used to encourage his fellow hunters to “use enough gun” when hunting dangerous animals.  If the reasoning of the Illinois Supreme Court recently in Provena Covenant Medical Center V. Department of Revenue 2010 WL966858 (2010) gains traction beyond the state court ruling on local property tax exemptions and spills over into the analysis of federal and state income tax exemptions, not-for-profit hospitals may be in for some rough sledding with the Internal Revenue Service and Sen. Charles Grassley (R) Iowa.  Senator Grassley who inserted the enhanced “community benefit” requirements into the Patient Protection and Affordable Care Act enacted last fall has been anxious to hold non-for profit hospitals accountable for the very lucrative tax exemptions that they receive under the Internal Revenue Code.

 

NON PROFIT HOSPITAL CHARITY CARE “OUT OF THE CLOSET” WITH PPACA?

 

 

Sen. Charles Grassley (R) Iowa, arranged to insert language in Section 9007 of the Patient Protection and Affordable Care Act, the health reform bill signed into law in March of 2010 that requires not for profit hospitals to adopt and disclose financial assistance policies for the medically underserved who are not covered by insurance. The American Hospital Association has long argued that mandatory charitable care disclosure policies are unnecessary and that the need can be met through voluntary disclosure procedures.

HOSPITALS INSTALL MEDIATION CENTERS TO QUELL PATIENT VIOLENCE AGAINST DOCTORS

    Is access to quality healthcare a right of all citizens or a privilege for the privileged?  Consider the prospect of a growing disparity between the halves and have nots and the frustration of those excluded from the better hospitals and physicians because of the inability to pay. Imagine the potential for violence as patients observe loved ones needlessly dying or facing disabling injury as a result of poor or inadequate treatment.  Hospitals demanding police protection, but officers concerned that they are public servants and not body guards.  2000 people riot at a hospital which refuses to treat a three year old who is unable to pay an $82.00 up front fee. A pediatrician jumps out of a fifth floor window to avoid the wrath of angry relative of an infant who died under his care.  Relatives beat doctors and nurses with mops and sticks for referring feverish patient to an outside clinic. 5,500 medical workers injured by patients in a single year. A grim vision of the future?

UNION LIABILITY FOR LAUNDERING HOSPITAL DIRTY LINEN IN PUBLIC?

    A California Court of Appeals struck down a $17 million dollar defamation judgment in favor of Sutter Health against a union, Unite Here, which was engaged in a labor dispute with a nationwide laundry company, Angelica Textile Services, Inc. Unite Here engaged in a type of secondary picketing, attempting to apply pressure on Sutter Health to pressure Angelica to submit to union demands.  Unite Here directed its fire on the lucrative birthing services of the Sutter Hospitals. It developed what was identified as the Sutter Escalation Plan,” mailing postcards to prospective clients of the Sutter birthing centers or “wealthier women between 25 and 40 who are registered to vote.” The postcards warned that the laundry service (Angelica) used by Sutter did not ensure its lines were free from harmful pathogens and urged potential Sutter Health patients to protect their newborns because Sutter may not be taking adequate precautions against potential infections. One side of the postcard stated: “EXPECTING? You may be bringing home more than your baby if you deliver at a Sutter birthing center.”

    

ARE NON PROFIT HOSPITAL TAX EXEMPTIONS RELEVANT OR NEEDED?

    

    The principal justification for the extension of billions of dollars of tax exemptions to non-profit hospitals has been their self proclaimed charitable mission.  While many of these hospitals have in the past struggled mightily to provide health care services to those uninsured in extreme need without resources, others have provided little more charitable care than for profit facilities, content with equating bad debt with charitable mission.   With the expansion of access to health care insurance under the recent health care reform legislation, the PPACA, the question of the utility and relevance of tax exemptions moves into high relief.