New Joint Commission Standard Requires Closer Monitoring of Hospital Contractors

Effective January 1, 2008, the Joint Commission implemented a new leadership standard, LD 3.50, which requires hospital leadership to affirmatively monitor patient care, treatment and services which is provided through contractual arrangements.

1. This new standard is important because in order to satisfy LD 3.50:hospital leadership must implement policies and practices to ensure that outside contractors provide patient care, treatment and services safely and effectively; and
    
2. it may be necessary to amend existing contracts and to include certain provisions in new contracts.

 
The Standard
 
LD 3.50 requires that patient care, treatment and services provided through contractual agreements be provided safely and effectively. The purpose of LD 3.50 is to ensure that patients receive high-quality care regardless of whether services are provided directly by the hospital or through contractual agreements with outside providers.
 
Note that LD 3.50 applies only to agreements for the “provision of care, treatment and services provided to hospital patients.”
 
The elements of performance for LD 3.50 are designed to ensure that hospital leadership is actively involved in monitoring and overseeing the care and services rendered by outside providers to hospital patients. Leaders must be actively involved not only in negotiating and approving initial contracts, but also in monitoring each contractor’s on-going performance, taking appropriate action to correct any deficiencies, and terminating the contract if necessary.
 
The Joint Commission does not prescribe specific parameters for monitoring contracted services – a hospital is free to develop an oversight structure which is appropriate to its institution and addresses the relevant patient care and safety issues. Such mechanisms may include a wide variety of activities, including without limitation, audits of contracted services, direct observation, review of performance standards and indicators, review and monitoring of credentials and accreditation status, and review of patient satisfaction surveys and risk management issues.
 
Practical Recommendations
 
In order to demonstrate a hospital’s compliance with the requirements of LD 3.50, we recommend that hospitals consider taking the following actions:
 
1. Develop and enact a written policy which describes the methods by which hospital leadership monitors patient care, treatment and services provided through contractual arrangements.
 
2. Written agreements with contractors providing patient care, treatment or services should include (and existing contracts should be amended or updated if necessary to include) the following:
 
(a) A comprehensive list of all services to be provided by the contractor, including a list of performance-based expectations, goals, objectives and benchmarks.
 
(b) Additional requirements with respect to risk reduction, patient safety, staff competence, and patient satisfaction.
 
(c) A requirement that all contractor staff be properly licensed, privileged and credentialed.
 
(d) A requirement that all services be provided in a safe and effective manner.
 
(e) A requirement to comply with all applicable hospital policies and procedures, state, local and federal laws and regulations (including without limitation Medicare) and all requirements of The Joint Commission.
 
(f) A requirement that the contractor provide written reports regarding its services on a regular basis (e.g. monthly, quarterly, etc.).
 
(g) To the extent possible, the right of the hospital to terminate the agreement without cause and without liability upon the provision of reasonable notice, but at a minimum, the right to immediately terminate the agreement in the event that the contractor’s actions adversely impact patient care and safety.
 
(h) A requirement to fully cooperate upon the termination of the agreement, in order to effectuate a smooth transition in a manner that does not impact patient care.
 
3. Prior to entering into, renewing, amending or allowing the automatic renewal of an arrangement, the agreement should be reviewed and approved by senior management, in consultation with industry experts and/or legal counsel (if applicable). If required by the hospital’s bylaws, the agreement should also be reviewed and approved by hospital’s Board of Trustees.
 
4. Upon entering into each contract the hospital should implement a monitoring process, which includes the following elements:
 
(a) Assign a manager or executive responsibility for reviewing, monitoring and evaluating the contractor’s performance under the agreement. The responsible person should consider whether services are being provided in a high-quality manner consistent with the requirements of the agreement. A “checklist” may be helpful in assessing whether the contractor is meeting expectations.
 
(b) On an on-going basis, review performance data and information related to the efficacy of the contractor’s services, such as incident reports, risk management data and patient satisfaction surveys.
 
(c) Review written reports provided by contractor regarding its services or perform audits of contractor’s service.
 
(d) Obtain additional input regarding the quality of services through interviews with patients and staff.
 
(e) The hospital should regularly communicate in writing to the contractor any concerns the hospital may have with regard to the contractor’s performance, any complaints raised by staff, patients, or visitors and any risk management issues with respect to the contractor’s services.
 
5. If a contractor repeatedly fails to meet performance standards and/or poses a risk to patient safety, the hospital should take steps to terminate the contract and transition to a new provider of services in a safe and efficient manner, which will not disrupt the continuity of care.

© Sills Cummis & Gross P.C.