Encountering Physicians Who Practice without Privileges

Encountering Physicians Who Practice without Privileges

I took an unusual call from a colleague a few weeks ago. He was panicked, because his hospital has a physician who has been performing procedures for which he has no privileges. As he describes the situation, the physician has never had privileges for the procedure. The physician is employed by the hospital, and the hospital has billed the technical and professional components for at least seven years.

The physician’s training included the procedures in question. He has a verified case log from his training – from a decade ago. He appears to be competent, although the current privileging process did not include Focused Professional Practice Evaluation (FPPE), since he did not request the privileges initially. He’s never been subjected to Ongoing Professional Practice Evaluation (OPPE) for them either. In essence, his performance has never been evaluated since he took his certification exam. He began performing the procedure because no one else was around to perform one, and he was asked to do one. After that, he just kept doing them.

My colleague was calling to ask, does his hospital have to return the payments? Does the refund have to include both technical and professional fees? How far back does he have to look?

To start with, I suspect that this is not an uncommon occurrence. Next, just like I would tell Monitor Mondays listeners, I told him to discuss this in great detail with qualified counsel, because the solution is going to be extremely fact-dependent.

The first thing to get out of the way is that only the Conditions of Participation at 42 CFR § 482.22 cover privileges of the medical staff. For fee-for-service Medicare, privileges generally are not a condition of payment. Perhaps the most notable exception is transcatheter aortic valve replacement (TAVR).That being said, the plan of action depends on three things:

  • First, were the procedures performed competently?
  • Second, does the claim constitute an implied certification of compliance with applicable billing requirements?
  • Third, is noncompliance with the certification material?

That seems confusing, and that’s why this is a very fact-based analysis. It means that in the case of fee-for-service (FFS) Medicare, every claim may need to be reviewed, with particular attention to any conditions of payment in effect at the time the service was rendered.

Unfortunately, Medicare Advantage (MA) is no more straightforward. Each MA plan would be very likely to use the Medicare rules in order to deny payment. But the plan may also add on specific contractual requirements for privileges. In these cases, the claims would need to be reviewed in the context of the contract in effect at the time services were rendered.

Finally, commercial indemnity plans may also add requirements for privileges for specific procedures.

The bottom line is that failure to privilege and monitor physicians may be very costly. Hospitals must:

  • Assure that privileges are only available to qualified providers and that these are assessed through an OPPE program;
  • Assure that safeguards are in place to prevent “scope creep,” so that providers are prevented from providing elective care beyond their scope of privileges; and
  • Finally, have programs in place to detect care beyond the scope of privileges.

Every payer wants money back. We have to make it hard for them to take it.


John K. Hall, MD, JD, MBA, FCLM, FRCPC

John K. Hall, MD, JD, MBA, FCLM, FRCPC is a licensed physician in several jurisdictions and is admitted to the California bar. He is also the founder of The Aegis Firm, a healthcare consulting firm providing consultative and litigation support on a wide variety of criminal and civil matters related to healthcare. He lectures frequently on black-letter health law, mediation, medical staff relations, and medical ethics, as well as patient and physician rights. Dr. Hall hopes to help explain complex problems at the intersection of medicine and law and prepare providers to manage those problems.

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