United States: JCAHO Revises Standard MS.1.20 on Medical Staff Bylaws

In recent months, the Joint Commission on Accreditation of Healthcare Organizations ("JCAHO") has issued a series of revisions to and clarifications of 2005 Hospital Standard MS.1.20 concerning the structure and content of medical staff bylaws. JCAHO’s guidance appeared in the form of two "E-Mail Blasts" from the accrediting body – one on September 29, 2004 and another on October 21, 2004. With these publications, JCAHO has placed in doubt the continuing prerogative of hospitals and their medical staffs to address topics such as credentialing and fair hearing procedures in policies distinct from the core medical staff bylaws document. As published, the September and October Guidance require compliance with the revised Standard MS.1.20 no later than January 1, 2006.

The October 2004 guidance from JCAHO marks the third revision to the documentation requirements for medical staff procedures in less than a year. In December 2003, JCAHO issued a clarification (the "2003 Clarification") stating that a hospital medical staff did not need to describe procedures addressing credentialing, privileging, appointments, and fair hearings and appeals in detail in the core bylaws document. Instead, these procedures could simply be referenced in the bylaws and described in detail in other related documents. The 2003 Clarification stated that the utilization of related documents in this manner would be consistent with Standard MS.1.20 as long as the detail provided in the related documents was jointly approved by the medical staff and governing body.

Under the 2003 Clarification, amendment or approval of the related documents was not required to follow the processes established for amendment or approval of the bylaws. In this manner, the hospital and medical staff were afforded greater flexibility in the management and operation of the procedures addressed in the related documents. By allowing the medical staff to delegate responsibility for such procedures to committees or sub-groups of medical staff members with the most direct experience and expertise, the related documents could be updated, on a more timely basis, to reflect current standards of practice without the necessity of full bylaws approval, which typically involves approval of the proposed revision by a percentage of the entire medical staff. The only requirement JCAHO placed on the amendment and/or approval processes for related documents was that those processes themselves be established and set forth in the bylaws. This means that any alternative amendment or approval process for policies documented separately from the core medical staff bylaws must be adopted under the existing bylaws approval mechanism before the alternative process can be implemented.

In the September E-Mail Blast, JCAHO revised its position regarding bylaws and related documents and issued a correction to the previous interpretation of Standard MS.1.20 (the "Correction"). Specifically, JCAHO added the following new element of performance ("EP") to the standard:

EP19. When administrative procedures, associated with processes described in the medical staff bylaws for corrective actions, fair hearing and appeal, credentialing, privileging, and appointment (elements of performance 12-18), are described in medical staff governance documents that supplement the bylaws (i.e., rules and regulations, and policies):

• The mechanism for the approval of the administrative procedures, which may be different from that for adoption and amendment of the medical staff bylaws, is described in the medical staff bylaws,

• Criteria to identify those administrative procedures that can be in the supplementary documents are described in the bylaws, and

• The administrative procedures are approved by both the medical staff and the governing body through the bylaws-described mechanism.

No interpretive guidance was provided with the Correction. The Correction was described as being "immediately effective for all new changes in content of medical staff bylaws and rules and regulations;" however, hospitals were granted until January 1, 2006 to revise existing bylaws and related documents to come into compliance with the Correction.

Less than one month later, on October 21, 2004, JCAHO issued a clarification to the Correction (the "2004 Clarification"). The 2004 Clarification established criteria for determining which medical staff policies were permitted to be addressed in related documents and which were not. JCAHO explained that the "processes" referenced in EPs 12-18 (concerning corrective actions, fair hearing and appeal, credentialing, privileging, and appointment) were each composed of multiple "steps." In turn, for each step in a process, there are "procedures" for executing the step. Further, according to JCAHO, each "procedure" can have either a major or minor impact on the outcome of the process – "procedures involving evaluative conclusions or decisions invariably have a major impact, while many administrative procedures (for example, clerical procedures), often have only a minor impact."

JCAHO also stated in the 2004 Clarification that medical staff bylaws must describe the "steps" associated with the "processes" for corrective actions, fair hearings and appeals, credentialing, privileging, and appointments to the level of detail typically associated with a flow chart. For each "process step," the bylaws must also fully describe any "procedure" that has a major impact on outcomes, including procedures relating to:

• defining criteria for membership, appointment and reappointment, and clinical privileges;

• evaluating applicant information at all stages of the appointment and reappointment processes;

• evaluating applicant information during the course of fair hearings and appeals;

• evaluating applicant information in the course of recommending corrective action; and

• decision-making associated with fair hearings and appeals.

In contrast, JCAHO explained that administrative procedures having a minor impact on outcomes – e.g., procedures for soliciting, verifying, or assembling information from applicants; procedures for notifying applicants of various actions; and procedures for scheduling fair hearings and appeals – need not be included in the bylaws and may continue to be described in related documents as long as the bylaws specify "criteria" for determining which administrative procedures may be so separately described. These criteria must at a minimum be consistent with the following three principles established by JCAHO: (i) the procedure must not be a "step" in the "process" itself; (ii) the procedure must not have a major impact on the outcome of the "process" (i.e., may not result in an evaluative conclusion or a decision); and (iii) the procedure must not be so material to the appropriateness and fairness of the "process" that it should be incorporated into the bylaws.

If ultimately implemented as published, JCAHO’s 2004 Clarification will effect a sea-change in the discretion historically afforded hospitals and medical staffs to customize the structure of medical staff governance documents. Although the accrediting body purports to afford hospitals flexibility in how organizations structure their medical staff bylaws, the practical reality is that JCAHO’s newlystated policy significantly constrains a medical staff’s ability to address issues such as credentialing and fair hearing procedures in related documents. In addition, it will add an unnecessary level of confusion as medical staffs attempt to grapple with the distinction between "procedures" and "steps," between procedures that have a "major" versus a "minor" impact, and between activities that have a material effect on fundamental fairness and those that play only an immaterial role.

We recommend that hospitals affected by this new guidance proceed thoughtfully before taking time-consuming steps to modify medical staff governance documents. In a December 1, 2004 teleconference sponsored by the American Health Lawyers Association, JCAHO representatives stated their clear intent to gather commentary on the 2004 Clarification and to issue further written guidance in the next several months. Since the approach to be taken by JCAHO in such future guidance is unclear, any immediate responsive action may well be premature or misdirected.

In contrast, it may be worthwhile for individual institutions to provide comments to JCAHO concerning the potential effect of the 2004 Clarification on their organizations. It is possible – although certainly not guaranteed – that, in the face of a groundswell of negative industry reaction, JCAHO will reconsider its position, particularly given that the policy articulated in the 2004 Clarification is at least somewhat contrary to the accreditation body’s increased focus on patient care and its self-proclaimed emphasis on the streamlining of accreditation standards.

During the first quarter of 2005, hospitals should monitor JCAHO publications for further developments concerning Standard MS.1.20. In addition to watching for substantive changes to the 2004 Clarification, hospitals should also monitor guidance concerning the effective date of the new policy. JCAHO’s statement that the Correction is "effective immediately" for all new changes in bylaws content raises the question whether any changes to bylaws after the September 29 publication of the Correction trigger a need to conform the bylaws document to the revised Standard MS.1.20 (as further augmented by the 2004 Clarification). If so, the January 1, 2006 compliance deadline would effectively be inapplicable to any facility that makes bylaws changes prior to that date. As a result, it is hoped that future JCAHO clarification concerning Standard MS.1.20 will address this ambiguity.

Reed Smith will continue to track developments surrounding JCAHO’s bylaws documentation requirements and will provide additional information on the status of the hospital accreditation standards as it becomes available.

This article is presented for informational purposes only and is not intended to constitute legal advice.