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Health Department overhauls regulations

Barbara Holland, Esq.

By Christopher Guadagnino, Ph.D.

In their current form, the draft revisions would make some significant changes to health care facilities’ regulatory requirements, including:

· Expanding the types of facilities requiring licensure to a newly-created category – “outpatient ambulatory health care facility” – which would include facilities providing imaging, pain management, rehabilitation, emergency and other services.

· Requiring a minimum nurse-to-patient ratio of 1:2 in four categories of critical care, and requiring facilities to report nurse staffing ratios for each patient care unit of a hospital or outpatient ambulatory health care facility.

· Requiring facilities annually to submit patient safety reports, to a identify a minimum of six safe practices to be implemented in the coming year, and to arrange for six hours of patient safety training for each health care practitioner, officer and director.

· Broadening the definition of hospital medical staff – which current regulations define as physician, dentist or podiatrist – to allow the medical staff to include other health care providers.

· Setting minimum charity care levels and limitations on collection practices by hospitals and outpatient ambulatory health care facilities, as well as requiring audited financial statements and reserving DOH authority to audit and impose a plan for improved fiscal review of such facilities.

Posted by individual chapter on DOH’s website in mid-August – under “Draft Facility Regulations” on the DOH’s website map – the draft facility regulation chapters have not been published as formally proposed regulations in the Pennsylvania Bulletin, and are scheduled to be removed from DOH’s website on October 15. The posting notes that the chapters are still undergoing internal review by DOH, and that some may be revised in whole or in part following further review and input received as a result of the posting. “The Department appreciates all responses and is especially interested in constructive input with specific suggestions for alternative language,” the posting states, adding that “the more thoughtful the comments and suggested changes and the more consistent with the intended purpose of a given regulation, the greater the likelihood that the Department will incorporate the comments and suggestions into the Draft regulation.”

While these draft regulations are likely to undergo modification before DOH formally proposes and publishes them, to some stakeholders they represent bold and long-overdue change that is urgently needed to keep pace with a health care delivery landscape that has evolved significantly over the past 20 years. Although DOH says the draft regulations are intended to give health care facilities greater flexibility in balancing regulatory compliance with local health care constraints, some key stakeholders regard them as overly prescriptive and intrusive.

Genesis and Rationale

DOH had promulgated five new facility licensure chapters in 1998 to fill a quality oversight gap left by the sunset of Pa.’s Certificate of Need statute, covering ambulatory surgical facilities, open heart surgery, cardiac catheterization, organ transplants, neonatal ICUs, and long-term care.

Work on revising Pa.’s core hospital facility regulations began in the late 1990s, when DOH formed various stakeholder groups to address each of the chapters in light of technological advances and nearly two decades of experience with the existing regulations, according to Barbara Holland, Esq., deputy general counsel in the Governor’s Office of Health Care Reform, and former DOH chief counsel. Based on stakeholder group input, DOH had finalized a set of proposed regulations, which were scheduled to be published in summer 2002, but then-Secretary Robert S. Zimmerman decided not to do so, given that Pa.’s leadership was about to change with the entry of a new administration, notes Holland.

In 2003, DOH formed internal groups to review the shelved proposals, taking stock of ongoing developments in health care that had not been considered by the prior stakeholder groups, including an accelerating movement of procedures from hospitals to various “boutique” outpatient facilities, a national patient safety movement to identify system failure causes of medical errors, and passage of Pa.’s Act 13 – the MCARE Act – which created the Patient Safety Authority. Based on these developments, says Holland, DOH decided to expand the licensure regulations to include outpatient diagnostic and treatment centers, as well as to put a stronger emphasis on patient safety and to encourage patients to take more responsibility for safety – e.g., by requiring every exam and treatment room to post a “patient bill of rights” sign encouraging patients to become more involved in decisions about their care.

Using Act 13’s Patient Safety Authority reporting requirements as a starting point, Holland says, DOH’s new draft regulations aim to spur facilities to review and act on their patient safety improvement efforts – e.g., by formalizing an annual minimum requirement for patient safety training and safe practice implementation, and by requiring facilities to submit an annual report (which is not required under the real-time reporting requirements of the Patient Safety Authority) that tallies the year’s incidents, serious events and infrastructure failures occurring at the facility. The draft regulations would also require a facility’s annual report to tally its annual medication errors, readmissions, procedure complications, falls and nosocomial infections, with a comparison against the previous three years.

With its “new direction” heavily emphasizing patient safety and quality improvement, DOH is trying to make its regulations less prescriptive and static, so as not to preclude technological innovation and improvement, without sacrificing substantive accountability, says Holland. “We are looking to make a paradigm shift in these regulations: creating a structure to help facilities identify and correct systemic problems, rather than DOH being the stick beating them over their head,” adds Holland.

Another shift, says Holland, is the way DOH hopes to “get regulations out of the business of making clinical decisions,” e.g., by taking out degree requirements for medical staff membership and restrictions on drug prescribing. Under their licensing board’s scope of practice provisions, certified registered nurse practitioners (CRNPs) can prescribe drugs, but they are precluded from doing that under Pa.’s existing facility regulations, which allow written or oral orders for drugs and treatment only by MDs, DOs and dentists, notes Holland. “With respect to what a clinician does, those decisions would reside with state licensing boards and medical staffs of a facility, so DOH is out of the loop,” adds Holland.

The draft regulations address the use of telemedicine – which is not even mentioned in existing regulations – in a similar manner: leaving implementation specifics up to the protocols and procedures developed by the clinical staff of a facility, as long as practitioners involved are duly licensed in accordance with the applicable licensing board in Pa., or registered in accordance with federal or state law.

DOH is inviting informal comment on the draft regulations until Oct. 15, which Holland calls a “soft deadline,” after which the draft will be removed from DOH’s website, although comments will still be accepted. “This is a discussion mode. Once we get into the formal process, it becomes very prescriptive and we have to follow the rules of the process. Before that, we wanted to engage stakeholders in a discussion, rather than a reaction,” says Holland, who again emphasizes that DOH is looking for “thoughtful” comments that include specific alternatives to what has been drafted.

An internal DOH group will evaluate comments received, while DOH is willing to meet with any stakeholder group that wishes to meet, even into November, if necessary, says Holland. Once officially proposed regulations are published in the Pennsylvania Bulletin, there is a 30-day public comment period, after which DOH is obligated to respond to all written comments in the preamble of its final proposal, which is then reviewed by Pa.’s House and Senate oversight committees and the Independent Regulatory Review Commission for approval. The whole process, from publication to final approval, must occur within two years, Holland notes.

Initial Praise

DOH’s draft regulations represent a new direction in quality improvement and safe practice by explicitly adopting the “zero goal” for medical errors and requiring hospitals to develop infrastructure to approach that goal, according to Karen Wolk Feinstein, president of the Jewish Healthcare Foundation of Pittsburgh. “Wisely, the state is now integrating the activity of the Patient Safety Authority. Doing good PSA reporting should be regulated,” she says. The new regulations, she believes, are “an awakening that cost and quality begin at the point of care. Giving the patient what is needed the first time – no more and no less – will drive up the value of the encounter.” The right infrastructure has to be in place to effectively provide improved health care – including staff, processes, training and data collection – and these draft regulations are right on target, Feinstein adds.

The draft also changes the whole discussion about DOH’s facility inspections by giving inspectors greater freedom to probe specific behaviors, and ending a “responsibility shell game” by enabling DOH to identify a specific individual – a facility’s patient safety officer – as the person accountable for moving a facility’s quality and patient safety goals forward, says Peter L. Perreiah, managing director of the Pittsburgh Regional Healthcare Initiative. Perreiah’s only concern is whether DOH will have the support it needs to make the inspections necessary to drive the new goals. It remains to be seen how aggressive DOH will be in monitoring and enforcing the new guidelines, he adds.

DOH’s draft regulations also consolidate and streamline nursing governance regulations, removing overly prescriptive content requirements of nursing care plans and giving nursing directors greater flexibility to develop their own leadership structure, according to Michele Campbell, executive administrator of the Pennsylvania State Nurses Association. Current regulations require that oral orders for drugs and treatment be reviewed and countersigned by a physician within 24 hours after the order is given, while the draft regulations require countersignature by an authorized “practitioner” – determined by professional licensure scope of practice and medical staff bylaws – and relaxes the deadline to 36 hours, which Campbell says is an important change because it is notoriously difficult to get orders signed within 24 hours.

It makes sense that the draft regulations require, for the first time and with some precision, that health care facilities have a emergency preparedness plan – addressing items such as medication and supply inventory, unified medical command, procedure for rapid acquisition of emergency pharmaceuticals and supplies, plan for emergency transportation services, and plan for prompt patient transfer, according to Maggie Potter, J.D., associate dean and director of the Center for Public Health Practice at University of Pittsburgh’s Graduate School of Public Health. While some of these areas may also be part of JCAHO accreditation guidelines, it is important that they be state-specific, although DOH could be even more specific about standards for facilities’required semi-annual emergency drills, e.g., time frames for immunizations or evacuations, she adds.

Stakeholder Concerns

While applauded as noble in intent, the DOH draft regulations have sparked concerns and criticism by key stakeholders, including the physician, hospital, nursing, and nursing home communities.

Current regulations restrict a hospital’s medical staff membership to physicians, dentists or podiatrists, notes Don McCoy, vice president of health policy and regulatory affairs for the Pennsylvania Medical Society (PMS). DOH’s draft regulations do not contain that restriction, and state that they would allow membership by “any other practitioners who have applied for and been accepted into membership in accordance with the medical staff bylaws, rules, and regulations and the governing documents of the hospital.” Mixing physician and non-physician membership dilutes the responsibility and authority of the medical staff at a hospital, says McCoy, noting that medical staffs credential practitioners and determine clinical duties assigned to non-physicians. “Now, a non-physician could be supervising a physician. Department Chairs could now be non-physicians,” he adds.

“We want to get out of the business of prescribing who ought to be doing what at a hospital,” Holland responds. “If a small rural hospital’s medical staff needed to expand to allow more CRNPs to practice at that facility, that medical staff may decide to have CRNPs as members,” says Holland, who notes that medical staff bylaw decisions remain under the control of existing medical staffs.

McCoy is also concerned about changes to the governance chapter, which he says would allow a hospital CEO to ignore medical staff recommendations for credentialing and assignment of clinical duties, and allow a CEO to determine not to delegate to the medical staff quality assurance recommendations, such as those regarding equipment purchases and staffing. Under current regulations, such medical staff recommendations are the basis of the CEO’s decisions, says McCoy.

The governance chapter changes are not intended to allow hospital CEOs to bypass medical staff recommendations, but rather to insulate the medical staff from charges of antitrust violations, replies Holland. Because of antitrust law, final credentialing decisions cannot be made by the medical staff and must be made by the provider institution itself, Holland explains. “The medical staff makes the recommendations and the provider makes the decisions,” she adds.

The draft regulations set a goal of zero serious events, medication errors, readmission complications, falls and nosocomial infections at a facility, which McCoy regards as unrealistic. “The best we can do is eliminate some and mitigate others,” he says. McCoy also regards as unrealistic that all hospitals, irrespective of size, must meet the annual requirement of six safe practice implementation goals and six hours of patient safety training for each health care practitioner.

While the PMS does not have an official position on the proposed nursing staff ratios, McCoy believes that the ratios can cause difficulties in some facilities because of a statewide and national nursing shortage, which he says has led some hospitals to divert patients.

The PMS agrees with DOH’s move to require licensure of outpatient ambulatory health care facilities in order to assure safety and quality of care, says McCoy, who notes that the PMS was in discussions last year with DOH over a Florida-owned truck that had parked in Harrisburg to offer walk-in laser eye surgery. Although the vehicle was staffed by out-of-state physicians who were licensed to practice in Pa., the ability of patients to receive follow-up care was not certain, and no state agency had authority over the vehicle.

DOH’s definition of outpatient ambulatory health care facility, whether fixed site or mobile unit, is a facility that provides “diagnostic, therapeutic, treatment, or rehabilitation services on an outpatient basis or to individual patients for less than a 24-hour consecutive period,” while the definition “does not include an office used primarily for the private practice of a health care practitioner, but does include clinics and group practice facilities providing diagnostic and treatment services (other than primary care) in a specific specialized area of medicine.”

It is not yet clear in that definition what level of services would trigger the new requirement to obtain a facility license – an important consideration to a physician practice offering diagnostic or other outpatient services, as this definition could apply to any specialty physician office other than primary care, bringing with it physical plant mandates, structured operational regulations, written policy and procedure requirements, and DOH survey and oversight, says Karl Thallner, Esq., head of health care practice at the Reed Smith law firm in Philadelphia. DOH’s draft standards for outpatient ambulatory health care facilities are unexpectedly rigorous in their current form, says Thallner, because they remain grouped with hospital standards and do not vary proportional to the level of care given at outpatient facilities. “Even ambulatory surgical facilities are not subject to this level of detail,” he adds.

“How much physical therapy could an orthopedic group practice provide without having to obtain an outpatient ambulatory health care facility license?,” asks Thallner, who notes that the same question applies to imaging and other physician office services. Without a “bright line” delineating the type and magnitude of services that would trigger the licensure requirement, physicians will continue to ask those questions, as they did about liposuction in physician offices a few years ago until a patient death occurred, prompting DOH to send a letter to every physician that liposuction could not be performed as an office procedure without an ambulatory surgical facility license, adds Thallner.

The regulatory threshold for the new outpatient category should be defined by relevant clinical professionals who understand best practice standards, while facility requirements that come with licensure need to be customized to the services in question, and need to be flexible to allow revision as technology changes, says McCoy.

DOH hopes to flesh out that threshold, and how it can be drawn rationally, says Holland. “Clearly, a solo practitioner in an office specializing in some specific service would be an independent practitioner, but a group of ten radiologists is a different animal,” she says.

The Hospital & Healthsystem Association of Pennsylvania (HAP) has been calling for an updated set of hospital licensure regulations for years, to keep pace with changes in the way that health care is delivered and to obviate the need for hospitals to apply for exceptions to outdated regulations over “who can do what” in a hospital, says Paula Bussard, HAP’s senior vice president of policy and regulatory services.

HAP believes that DOH’s focus on quality and patient safety is appropriate, and appreciates that DOH has released a draft of proposed regulatory changes to spur discussion, although it is concerned that the draft regulations create additional reporting burdens that are redundant with those demanded by the Patient Safety Authority, the Pennsylvania Health Care Cost Containment Council and the Centers for Medicare & Medicaid Services, says Bussard.

HAP also believes the draft is overly prescriptive. The detailed content requirements of the annual patient safety and quality improvement report, for example, include the status of each facility’s planning for and implementation of an automated and error-free pharmacy system, computerized patient care reminder follow-up, and wireless medical order system – which Bussard says do not take into consideration differences among hospitals, let alone outpatient ambulatory health care facilities. The goal that health information technology be adopted is a laudable one, but a “one size fits all” reporting and training requirement for all hospitals – whether four beds or 900 beds in size – begs the question how all hospitals and outpatient facilities can afford such systems, says Bussard. A similar lack of distinction between types of facilities remains in the draft’s governance organization, admissions and discharge, clinical medical staff, and nursing chapters, she adds.

DOH has included in its draft regulations a list of fiscal requirements that HAP believes exceeds DOH’s oversight authority and that traditionally has been the jurisdiction of the state attorney general’s office or the IRS. The draft’s fiscal regulations would apply to hospitals and outpatient ambulatory care facilities, and include the following: a requirement for specific DOH approval and possible imposition of conditions for any for-profit company to operate a health care facility; a requirement that transactions between a facility and any officer or owner be in the best interest of the licensed entity and the community it serves; and a requirement for audited financial statements for facilities, with DOH authority to audit and impose a plan for improved fiscal review and control of such facilities.

HAP also believes DOH is exceeding the scope of its statutory authority by including in its draft regulations minimum charity care levels (for hospitals only) and limitations on collection practices, standards for which Bussard says are already spelled out in state and federal law.

The draft regulations declare that past hospital accounting practice did not consistently separate bad debt (a patient’s unwillingness to pay) from charity care (a patient’s inability to pay). The regulations would require hospitals to provide full charity care to low income or uninsured patients earning less than 200 percent of the federal poverty level; and provide discounted charity care to those earning between 200 and 400 percent of the federal poverty level, limiting payment liability to 30 percent of their annual household income.

Says Holland: “We looked at the hospital class action settlement agreement in Florida, which contained those provisions. We think they are reasonable. We might want to look at trends towards more catastrophic health care coverage being offered by employers, and see what impact that would have on the number of uninsured. We need to strike a balance between a person’s ability to pay and the provider’s ability to collect.”

While most hospitals have charity care policies and the new regulations ought not to be that big a deal, they are unfunded and susceptible to abuse, effectively mandating that hospitals direct limited resources first to meeting this obligation, providing free care regardless of whether a patient is a resident of Pa. or even a U.S. citizen, says Thallner.

“To me, these new draft regulations are more heavy-handed than those that exist currently,” Thallner says, noting that DOH’s draft sanctioning language is a lot stronger and gives it more options than licensure suspension and revocation. DOH would have the power to impose, through court petition, an outside entity to assume temporary operation and management of a facility that is either unwilling or unable to comply with the regulations until the violations are corrected. The draft regulation has no requirement that any plan of correction by a facility failed before DOH could take such an action. The coup de grace, according to Thallner, is the final sentence in the section granting that new power: “The Department’s determinations shall be presumptively necessary and appropriate.”

HAP also believes that DOH should not attempt to “pass laws through regulations” by mandating specific nurse staffing ratios – something that the Pa. Legislature has not done, adds Bussard. With a nursing shortage in the state, “how would you enforce mandated ratios?,” she asks.

There is ample evidence in medical literature that a higher nurse-patient ratio increases patient safety and leads to better outcomes, says Holland. “We are very aware of the nursing shortage and we consciously avoided ratios spelled out for every service, like in California. Instead, we decided to improve ratios for critical units, and to require directors of nursing to report their staffing plan as part of the new annual report on patient safety,” adds Holland.

While there are no specific nursing staffing levels required under current regulations, the draft’s nursing chapter doesn’t go far enough in setting staffing levels, as research demonstrates that better nurse ratios are needed in a lot of other service areas, says Sally Meisenhelder, coordinator of SEIU Nurse Alliance, Pennsylvania. “We believe they should be setting baseline ratios for ERs, ORs and recovery rooms,” says Meisenhelder, who maintains that there is no nursing “shortage,” per se, but rather that nurses are choosing not to work and will return when working conditions improve. Meisenhelder notes that HB 148, currently before the Health and Human Services Committee in the Pa. House, would amend the state’s Health Care Facilities Act by requiring specific minimum direct-care nurse staffing ratios for 16 specific service units in health care facilities other than extended care – e.g., one nurse for every OR and trauma patient, one nurse for every two critical care patients, one nurse for every three ER patients, and so on.

The DOH draft regulations showcase the concept of “patient-centered care,” but do not adequately define it or indicate how DOH will evaluate it, according to Alan Rosenbloom, president of the Pennsylvania Health Care Association, which represents 260 nursing homes and 40 assisted living facilities in the state. That lack of clarity can expose a facility to unjustified sanctions as it attempts to protect patients’ rights and safety, and to strike a balance between the draft’s required goals of “zero falls” and “patient-centered care.” Asks Rosenbloom, “If a nursing home resident has osteoporosis and is at risk of falls, should he or she be allowed to decline assistance with walking?”

Rosenbloom is also concerned whether reporting requirements of DOH’s draft regulations would entail duplicated effort on the part of nursing and assisted living facilities, which he says are already accountable to similar Medicare and Medicaid regulations related to quality improvement and error reduction, and to newly proposed Pa. Welfare Department civil rights compliance revisions.

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