Association of American Medical Colleges Teaching

Home , Attending physician, Teaching hospital

ASSOCIATION OF

AMERICAN MEDICAL COLLEGES

permission permission

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TEACHING HOSPITAL MEDICAL STAFF

AAMC AAMC the the

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PRINCIPLES FOR REIMBURSEMENT

PMI&Co. Peat, Marwick. Mitchell & Co. April 1970 ASSOCIATION OF MEDICAL COLLEGES

TEACHING HOSPITAL MEDICAL STAFF ORGANIZATION

PRINCIPLES FOR REIMBURSEMENT

8 PREPARED BY

PEAT, MARWICK, MITCHELL & CO. 1025 CONNECTICUT AVE., N.W. WASHINGTON, D.C. 20036

MAY 6, 1970 • Document from the collections of the AAMC Not to be reproduced without permission 1 I • • • final organization; Mr. Association The One ment of ments ment mended sonnel, services teaching submitted Medical Mitchell Dear 89-97. Washington, administration hospital will Council John Dupont Peat, Mr. It The are be of report changes Principles further who Colleges, is The our objectives teaching engagement M. rendered Danielson: hospital & to Co. our Marwick, Circle of of final PEAT, D.C. Danielson have an engagement which PMM&Co. of consultants, American Teaching were understanding reviewed advisory experience 1025 MARWICK, P.L. settings report relating in hospital WASHINGTON, for will made. approach Mitchell and teaching CONNECTICUT developed May the 89-97. approaches complete Medical with Hospitals committee contains by 6, For to AAMC. to staff AAMC in with MITCHELL D. that was the 1970 & test the hospitals C. Preliminary conjunction determining Co. AVE., a Colleges 20036 officials. teaching organization to Association the the Appended matrix a payment following N. to its is Preamble utilize W. contractual Statement expenses submitting & viability. under CO. and of hospitals documents the with to Peat, visited of and which professional Public this patterns medical and of AAMC American require- a this Marwick, Principles docu- recom- revenues. State- and were Law six per- staff and the I. M. M. et CO. O Mr. John M. Danielson May 6, 1970 The Council of Teaching Hospitals -2-

Because of the importance of the nation's teaching hospitals in providing the setting for services to patients, clinical education,and research, may we take this opportunity to compliment the AAMC for the leadership it has demonstrated 1 in postulating these principles. permission Sincerely,

PEA MARWICK, MITCHELL & CO. without

reproduced Philip L. O'Connell be Principal to Not AAMC the of collections the from

Document 1

• 11

TABLE OF CONTENTS

Section Page

BACKGROUND 1

II STATEMENT OF PRINCIPLES 5 Preamble 5 Statement of Principles 7

Definition of Terms 11 permission permission

1 Appendices without without A PRINCIPAL MEDICAL STAFF ORGANIZATION 15 1 PATTERNS

reproduced reproduced TEACHING HOSPITAL ORGANIZATION 25 be be

to to Assumptions Regarding Hospital 25

Objectives Not Not Problems Encountered in Meeting 26 1• Objectives

AAMC AAMC Steps to be Considered in Solving 26

the the These Problems of of Medical Staff Eligibility for Payment 36

of Services

collections collections

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from from Document Document

• I. BACKGROUND

The second half of the twentieth century has brought the controversies of progress to the American medical scene. The public is generally aware of the giant strides that American medical knowledge has made in relieving many aspects of human suffering. As a result, the demand for medical services has risen sharply which, in turn, has created some serious problems, including how to:

. prepare more and better educated medical professional personnel;

. improve the use of available financial, personnel, and facility resources;

. develop a better system for the delivery of health and medical care;

. make high quality health and medical care available to everyone;

. provide programs and services to all at a price they can afford to pay. '

The controversies that arise, relating to these problems are:

. determining the degree of government involvement in health and medical affairs;

. developing leadership for solution of problems in the health care field;

. establishing closer working relationships between doctors and hospitals for dealing with health and medical care problems in the community;

. developing a master plan to guide the implementation of innovative programs for • controlling resources while providing

-1- services to patients, education of medical personnel, research in medical sciences, management systems of health 1 affairs, and information systems for evaluating current and future program effectiveness; and

. determining the objectives for a health care system and the roles of practitioners

and institutions in their communities. permission permission The Senate Finance Committee recently prepared a report which confronted the teaching hospitals and the schools without without of medicine with these problems and controversies. The report, in part, centers upon the payment for services rendered by the medical staff of a teaching hospital under

Public Law 89-97. It indicates that, in some instances, reproduced reproduced the manner in which the medical staff is organized to pro- be be for to to vide patient care does not comply with the requirements

payment. There are professional health and medical services Not Not rendered for patients in teaching hospitals which, under any rule of equity, should be eligible for payment. The ques-

AAMC AAMC tion is whether the medical staff is organized, as pertains to receive the the to P.L. 89-97, in a manner that makes it eligible of of 1 payment for those services rendered. It should be pointed out that patients have the right

of choosing a physician to personally provide their care collections collections under this law. Further, they have the right, under the the the law, to choose the institution and method whereby this pro- services in a from from fessional service is rendered. Whether the setting are or should be personally provided, is part of the controversy. It also should be noted that clinical education of students, interns, and residents is involved in Document Document this consideration. Further, the financial solvency of the hospital in obtaining revenue for its operation from these - •services is a major concern.

Thus the membership of the Association of American Medical Colleges (AAMC) has much at stake in the satisfactory resolution of these problems. AAMC leadership, therefore, is essential to any consideration of: •

-2-

II Document from the collections of the AAMC Not to be reproduced without permission • First, consider Second, restrict in ing with er face medical services, innovative ards with may principles that services be sets in In improving action essential setting committee health materials as ing worked alternative working organized addition, each a the alleviate hospitals. . . . governmental in forth students, The the upon During guide -oriented regulations altering altering staff amending the closely services. the medical administering staff. while region the the rendered. member parent which nor the in for appointed AAMC out educational set alternative for AAMC the engagement, of financial opportunities to the view should the complying nation's a solutions interns, methods forth served with the the the the the must staff organization On AAMC institutions provide program To Statement staff AAMC officials. of problems of the organization support organization teaching existing law the by take members they in the P.L. organization P.L. should by of other requirements must relationships ways health the itself. and this for with patient AAMC to a national a interfere staff of -3- 89-97; of 89-97 which teaching President the general speak residents. problems comprehensive in Peat, administrative hospital; report hand, can of must assume the Principles staff a On and which discussion organization teaching the services of of the including seek governmental requirements and for crisis establish medical Marwick, of its in medical the policy of are, AAMC with a hospital one related of a of teaching its agreement leadership developing the policies medical medical Accordingly, the that the the hand, in in hospital should in member system. health of position hospital payment Mitchell staffs effect, medical a a the AAMC, to development to appears the would officials teaching of policy AAMC hospitals. staff P.L. deliver recognize and delivery should P.L. hospitals role background advisory planning to of additional for An be affect- must and which stand- staff & consid- the 89-97 that may teach- 89-97. in Co. used not its of of Document from the collections of the AAMC Not to be reproduced without permission 1 I • • • organization documents approaches the tion Appendix of of in for al ated and Appendix presented, principles. professional tinct These Incorporated we principles purpose needed offer this terms services staff flow the education of To Section staff, Since principles pleasure in report of existing illustrate nation's of conferences C. our and B, the were PMM&Co. this are and that money we broad performed continued and expenses in a II The future. and Preamble developed directed.' to as approaches have document the AAMC presents first were hospital health patterns research objectives Appendix in work when has Statement prepared could the and reviewed and by of interest an with which care payment the to is the the hospital active governing revenues of to these -4- consider A. programs. to the illustrate a for advisory teaching medical Statement programs, the of states and matrix In initiate documents and AAMC may Principles interest isolation a the as rewritten are teaching hospital control, service be in the on it staff committee and second hospital it made of developed. determining several this discussions provides issues Principles. in included is has of and as for is and as document, a and project, been hospital it categoriza- of a the staff to a meeting. profession- concern definition services appears result may the which a it associ- The about dis- are be as and and the Document from the collections of the AAMC Not to be reproduced without permission 1 1 I • • of complex, level an them of of must meet acceptance and and and and AAMC hospital, hospitals hospital morally bility Statement patient patients, nation. hospital. unusually the P.L. ways research. other training a Teaching maintain for The his The believes of broad in education to receives; responsible 89-97, and patient special scientifically excellence Association health this education, takes of are the health institution, agency, Any health benefits participate encompass should spectrum of the Principles heavy a delivery expected this hospitals individual II. medical They wherein qualified and health to and training and turns physician needs. professionals. services and or be financial guarantee provide under STATEMENT for medical in provide of and its extended of person to under the to of to staff agency, professionals. it the advanced, have programs is American research. responsibilities In provide this entitled Preamble medical the from health provide is are provision structured him -5- quality meeting the services, this qualified may of a burden stated: OF of to teaching title ultimately or special any such freedom setting PRINCIPLES for care be the These and all title Medical and staff. highly to person institution, of organized these upon services. may this of services, nation's insurance patients costly which and to upon care obligations role The hospital if for care. of obtain the skilled Colleges' under- for care, legally In needs, the such choice nation Section are which the and teaching in the in services education physicians in education, Teaching for the unusually nature, responsi- major a teaching the personnel the and the looks and variety place 1892 (AAMC) a hospital high part to to to Document from the collections of the AAMC Not to be reproduced without permission I 1 I • • of sciences. medicine ing physicians health health staff The manpower. availability by is personnel are the important in medical the In and addition, of forefront to is staff patients the -6- important community is the of essential through the practice to knowledge the because the to of development the practice the teaching of education teach- medical of of Document from the collections of the AAMC Not to be reproduced without permission 1 I • • define 1. sist zational hospital, patient faculty the It the is teaching medical it methods and and essential These health In to certain is care any participates demonstration relationships support of ferent be that to society. staff sonable signed made with and the In its important principles care legislation school emphasized extend developing health of activities. hospital teaching professional medical for service. the that necessary should payment Statement to delivery services them charges. effort these itself, render care the research to in in staff are and be of hospital in that for quantity, alternative experiment dealing the "units For to financial their supported incurred be patterns, of the new written its "units services -7- except all The such and delivery promoted. these example, Principles* and methods teaching medical educational socio-economic of hospital medical associated with services. development, quality, of to as principles service" in with relationships in should methods payment service" health clarify of the for ways the staff developing hospital. staff At and medical and medical rendering the and could be the as staff, for based of evaluate care, and its the relate commensurate and along delivery innovation, well levels equality organizing same hospital care. not medical be of organi- school on ways payment it to They as dif- de- of time, the to to rea- new is as- of of 2. Every patient admitted to the hospital has the right to the personal services of 'a 'r'e'spo'ns'ible physician on the hospital medical staff, in charge of his diagnosis and therapy.

The Association of American Medical Colleges concurs that this is necessary to insure the highest quality of care possible for the patient. It is also necessary for establishing responsibility for the management of the care and for payment of professional fees. permission permission This patient-physician relationship should also exist because of medical-legal problems out-patient, emergency, and without without which extend from continuing hospital medical care. Further, it is necessary for the conduct of medical education, which increasingly will involve reproduced reproduced the private patient-medical staff relation-

be be ship. to to

Not Not 3. The teaching hospital's medical staff should be organized as a team to provide continuous, direct,

and personal care to_patients and should develop AAMC AAMC organizational methods which guarantee appropriate the the for patientsi as well as availability of of of access on-call and emergency services.

Every patient has the freedom to choose the collections collections arrangements under which he will receive medi- the the cal care. Included is the right to all of the advantages which accompany a close relation- from from ship between the responsible physician and his associated staff in education as well as

practice. Document Document 4. A charge should be made for all hospital and professional services rendered to patients.

Improvements in the payment for medical services, while still not adequate, have affected the relationships among patient, doctor, hospital, and the payor. Since there are increasingly fewer individuals without some form of health insurance, this change in relationships requires development of a greater

-8- Document from the collections of the AAMC Not to be reproduced without permission 5. 6. dering for fessional audit allow professional corporated describing documents As Any ing and senior staff sidered an associate member hospitals payment dents resident the costs render must follows adequate ated the training, similar residents medical Since personally staff tices sponsible understanding hospital lines, accountability acceptance with resident services eligible teaching senior also staff should to of into organizations and the appropriate with professional consultations. for all to care that services can reimbursement a and the is staff for recognize may medical and professional of assisting the the those greater is medical and/or to such physicians for of departmentalized be medical of accept the setting. hospital the experience. be assigned patient between patients care of continued public patient's should for appointment patients services. -9- of assigned to senior conduct chief limitations staff or staff services the responsibility charges relative the the interns staff records accountability, restrict lesser medical be hospital charges. for in along patients. resident of resident attending implications patient medical organized members within and responsibilities of a manner agree Senior the The patient rendered to submitted. and degree. that these departmental his and to and on staff teaching their medical and the limits is hospital record. may other education, that and/or who the his The documentation other They and physician care for for eligible medical which medical rendering are of be be associ- payors prac- privileges. chief a the It resi- the may set ren- staff chief con- in- pertinent pro- The in- in re- will teach- by 7. The teaching hospital must have adequate financial resources for current operations, new and/or expanded programs as well as capital uses.

The teaching hospital's expansion of scientific competence is in direct response to the growth of the body of medical knowledge. This growth imposes new requirements for space, equipment, and personnel to bring to patients the best in

modern medical care. permission permission The special nature of the teaching hospitals in •1 their capacity of providing high quality, fre- without without quently innovative medical care, in providing an environment for teaching and scientific research, and in setting standards of excellence,

have caused the costs of providing care in these reproduced reproduced

hospitals to rise. As the hospitals attempt to be be

to to meet the increase in public demand for services,

and as they meet expanding modern scientific Not Not standards, requiring more highly skilled person- I• nel, this trend is expected to continue. At the

AAMC AAMC same time, however, teaching hospitals have a of the the special obligation to improve the management of of patient care, to maximize the use of available resources, and to minimize the patient's length

of stay. collections collections The teaching hospital is the environment in which the the medical scientific knowledge and skills are and equip- from from translated into innovations in methods ment for the delivery of high quality medical care. Growing specialization in medicine requires greater coordination of patient care management to Document Document avoid undue fractionation. However, new or expanded programs or services should be related to the demonstration of need.

-10- S Definition of Terms

1. Personally Rendered Professional Services

In the teaching hospital, the quality of care rendered to all patients should not be determined by economic status or the method of entry into the health care system. Each has a responsible physician who persOnally rendered care. permission permission The responsible physician may utilize the professional services of the associated staff or other

without without staff members, creating a team-of-physicians approach to patient care. To qualify for billing and collecting the professional fees for such services, there should be evidence that the responsible physician has reproduced reproduced personally rendered the care having reviewed and co-

be be ordinated all care rendered by the team. Further, to to during technical procedures, such as surgical opera- Not Not tions, the responsible physician must be present even though he may not be the operating surgeon of record. that the patient is informed of the team

AAMC AAMC This means

members. It is understood that, as a member of the the the only observe the of of team, the responsible physician may procedure, being immediately available to perform the surgery if needed. collections collections "Personally rendered professional services" also in- the the cludes those services provided by a member of the hospital medical staff, at the request of the patient's from from 1 responsible physician, and with the patient's knowledge. It is necessary that an opportunity be provided to make a unit charge for the total service ren- Document Document dered in the diagnosis, treatment and follow-up of an episode of disease. In the teaching hospital, the unit of service involves the medical care team and the reimbursement should be negotiated to cover appropriate charges for the care rendered.

2. Medical Staff Patient

A patient who has chosen a member of the hospital's medical staff, or has accepted a practicing physician 1 -11- Document from the collections of the AAMC Not to be reproduced without permission I • 4. 3. 5. 7. 6.• 'Associated care. assigned accordance agreed upon personally A A Attending and the Responsible medical faculty any Professional for Eligible viding responsible his residents The by and ed medical final Assistant graduate A (as physician physician physician whohas the to other be hospital's patients. interns, services described the the year Assignment responsible or medical member, staff school hospital. by education Physician observing member and Resident hospital's provide with or Staff the Physician by who who physician fees rendered assistant who chief in two the The medical faculty, staff. medical established has has a of #8 of chief assumes may years medical for and responsible staff the been resident been personally been below). a -12- approved is by be be physician the Professional staff, residents, staff resident, medical the of appointed appointed the billed personally appointed but responsible the staff care specialty policies hospital's associated physicians has of responsibility to teaching the physician of for staff. the is and personally not senior residents, to the medical by to fees accomplished services present. and the hospital qualifications yet for the the the patients. medical programs staff who resident hospital. may procedures may attained his hospital hospital's hospital's care are provide rendered for be be senior medical to when staff of billed a by appoint- in pro- or the a to the S 8. Resident

A physician who has been appointed to the hospital's graduate education staff and has attained:

a. Final year of a two- or three-year program, or

b. The final two years of a four-year or longer program.

9. Senior Resident permission A resident physician who has been appointed to a hospital's graduate education staff and has attained without the final year of Board required training, or beyond. He may be appointed to the hospital's active medical staff for an appropriate period according to the reproduced policy of the hospital. He has the training chronol- be ogy of the chief resident on the specialty service, to but does not have that designation. Not 10. Chief Resident

AAMC A resident physician who has been appointed to a the hospital's graduate education staff and has attained of the final year of Board required training, or beyond. He can be appointed to the hospital's active medical staff for an appropriate period according to the collections policy of the hospital. The designation of chief

the resident and the selection of the chief resident is a function of the medical school faculty, the hospital's from medical staff, and the hospital.

11. Medical Care Team Document As referred to in these principles and accompanying documents, the team consists of a responsible physician from the hospital's medical staff working with one or more members of the associated staff. The team in special care situations may also include other members of the hospital's medical staff working with the responsible physician and members of the associated staff.

-13- Document from the collections of the AAMC Not to be reproduced without permission 1111 INN OM aim dm No 11111 UN MN MI MD all 1111 Ell MB OM SaOICINaddV Document from the collections of the AAMC Not to be reproduced without permission I • • • III. II. I. I. Principal A. Hospital B. A. Hospital A. Hospital B. A. Hospital . . . . Payment . Composition Payment . Owned Owned Composition • Clinical Salaried Salaried Salaried Private, Government Clinical medical associated ownership medical Medical by by alternatives university another faculty by by by faculty non-profit APPENDIX staff Pattern staff Pattern Staff - the the the alternatives medical state, -15- organization medical medical hospital of Organization of II A I the county, the staff medical school school medical local Patterns school school only only Document from the collections of the AAMC Not to be reproduced without permission I. 1 • • III. II. I. B. Hospital A. A. Hospital B. A. Hospital B. . . . Payment . Payment . . Owned Owned . Composition Payment • • • Partially Partial Salaried Salaried Private, Government Clinical Attending Clinical Clinical school medical associated ownership medical by by alternatives alternatives university another fee school by by non-profit faculty faculty faculty salaried Pattern staff staff -for - the the alternatives medical state, organization -16- -service medical hospital with - of - III by salaried partially county, the staff medical the arrangement school medical medical local by school salaried the school school medical appointment by the Document from the collections of the AAMC Not to be reproduced without permission • • III. II. I. A. Hospital B. A. A. Hospital Hospital ...... Composition Payment • Owned Owned Attending Attending Clinical ment Private, Government Salaried Salaried Attending ical arrangement Attending Attending Clinical arrangement school medical ownership associated by by Alternatives school another university faculty non-profit by by faculty staff Pattern staff staff staff staff staff - the alternatives the state, medical -17- organization without with - hospital medical - - of - IV partial salaried partially partial the county, medical staff medical medical school fee fee by local salaried school -for the -for school school -service -service medical appointment by appoint- med- Document from the collections of the AAMC Not to be reproduced without permission III. II. A. A. B. Hospital Hospital B...... Payment Owned Owned Payment • • • Private, Government Salaried Salaried Attending appointment Attending Attending Clinical ment ment Clinical Clinical medical arrangement school ownership associated by by - - alternatives alternatives another university fee salaried school faculty by non-profit faculty faculty by -for staff staff staff - - alternatives the the state, medical organization fee -service medical hospital without with with by -for - - - the salaried partial partially county, -service staff medical medical medical arrangement school medical fee local by school school salaried arrangement -for school the school -service medical appoint- appoint- by the Pattern V

I. Hospital medical staff

A. Composition

• Clinical faculty of the medical school

• Attending staff without medical school appointment

permission 1 B. Payment alternatives without • Clinical faculty - salaried by the medical school

. Clinical faculty - partially reproduced salaried by the

be medical school

to . Clinical faculty - partial Not fee-for-service I. arrangement AAMC . Attending staff - fee-for-service arrangement

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A. Payment alternatives

collections . Salaried by the medical school

the

from . Salaried by the hospital

III. Hospital ownership alternatives

Document A. Owned by university

B. Owned by another organization

. Private, non-profit

. Government - state, county, local • -19- • Pattern VI

I. Hospital medical staff

A. Composition

. Clinical faculty of the medical school

. Hospital appointed full-time or part-time 1 staff

permission B. Payment alternatives without . Clinical faculty - salaried by the medical school

. Clinical faculty - partially salaried by reproduced the medical school

to . Clinical faculty - partial fee-for-service Not I• arrangement

AAMC . Hospital staff - salaried by the hospital

the of . Hospital staff - partially salaried by the hospital

. Hospital staff - partial collections fee for service arrangement

the

from . Hospital staff - percentage of revenue

II. Hospital associated medical staff

Document 1 A. Payment alternatives

. Salaried by the medical school

. Salaried by the hospital

III. Hospital ownership alternatives • A. Owned by the university -20- B. Owned by another organization

. Private, non-profit

. Government - state, county, local

Pattern VII

I. Hospital medical staff

permission A. Composition without . Clinical faculty of the medical school

. Hospital appointed full-time or part-time staff

reproduced

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Not

B. Payment alternatives

AAMC

the . Clinical faculty - salaried by the medical of school

. Clinical faculty - partially salaried by the medical school

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▪ Hospital staff - salaried by the hospital

Document ▪ Hospital staff - partially salaried by the hospital

. 'Hospital staff - partial fee-for-service arrangement

. Hospital staff - percentage of revenue

. Attending staff - fee-for-service arrangement

-21- 1• II. Hospital associated medical staff

A. Payment alternatives

. Salaried by the medical school

. Salaried by the hospital

III. Hospital ownership alternatives

A. Owned by the university

permission

B. Owned by another organization

without . Private, non-profit

. Government - state, county, local

reproduced

to Pattern VIII

Not I• I. Hospital medical staff - non-university

AAMC

the A. Composition

of . Attending staff of neighboring medical school

. Attending staff without medical school collections appointment

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from B. Payment

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A. Payment

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-22- Document from the collections of the AAMC Not to be reproduced without permission III. III. II. I. I. • B. A. Hospital B. A. Hospital Hospital A. Hospital B. Hospital ...... Payment Composition Payment Composition Private, Government • • Private, Attending Hospital hospital Full-time Hospital Salaried Salaried medical ownership associated ownership medical alternatives non-profit - full-time full-time non-profit by by staff staff Pattern hospital staff state, Pattern the the alternatives medical -23- - - hospital hospital county, non non IX chiefs chiefs X staff -university staff -university local - of salaried staff by the . Hospital full-time chiefs - percentage of revenue

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permission III. Hospital ownership without A. Private, non-profit

B. Government - state, county, local

reproduced

be to Pattern XI

Not • I. Hospital medical staff - non-university

AAMC A. Composition

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B. Payment

collections . Fee for service

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A. Payment

Document . Salaried by the hospital

III. Hospital ownership

A. Private, non-profit • -24- Document from the collections of the AAMC Not to be reproduced without permission Assumptions 6. 5. 4. 3. 1. 2. far education, To out medical medical The institution. and that revenue. readily research The The versity, sources stable considered of oratory providing the tive The Research to carry health Regarding provide educational as hospital, hospital health hospital education Teaching primary it of its financial staff. school, must designated available clinical a out and should in services and teaching the resources manpower as the the objective its seeks operate the intends Hospital Hospital Further, through of a medical APPENDIX hospital clinical seeks programs not basic program objectives public position sciences health -25- facilities for to to hospital. for be from will to its to patients. provide medical care of Objectives Organization it considered that B must rendering for that assure manpower. setting for collaborate a relationship permit. revenues as seeks is to teaching in purpose. the have health it a a and space, Research sciences patients patient itself, not secondary can to hospital, for financial an care -for-profit as demonstrate derived manpower maintain the hospital organized in equipment, hospital Monies care with to the should and and carrying delivery objec- patients. within from re- uni- for lab- and the as for a is be Problems Encountered in Meeting Objectives

1. With rising payroll, equipment, modernization, and replacement costs, the hospital is having increasing difficulty in meeting financial obligations in view of the level of money resources available to it.

2. The hospital would like to control costs. At the same time, it would like to expand programs and services to patients and staff.

permission

3. The hospital is facing major problems in obtain- without ing capital funds for modernization, replacement, and new construction.

4. As scientific medical knowledge has expanded

reproduced dramatically, the hospital has increasing be respon- to sibility for providing proper medical staff cov- erage for all patients, at all times.

Not

5. Operating income shortages require the hospital

AAMC to explore all means of controlling expense and

the collecting all revenues to which it is entitled. of The restrictions under P.L. 89-97 on payment for professional services provided by the associated staff, the faculty, and the attending staff require careful planning and full cooperation between the

collections hospital, its medical staff, and the medical school.

the from Steps to be Considered in Solving These Problems

1. Define the elements of the hospital's financial

Document position. In order to approach full reimbursement or direct pay for expenses incurred in the operation of the hospital, the full identification of costs and revenues must be refined. These principles are established for hospitals in the American Hospital Association's (ARA) Statement on Financial Requirements of Health Institutions and Services and are supported by the AHA Chart of Accounts. • -26- a. Hospital Operating Costs

Hospital operating costs would include salaries and benefits of all professional and administrative personnel, space, equipment, overhead, and maintenance for:

1. All services rendered to patients.

2. Education of the public and education of health manpower.

permission

3. Research in basic and clinical sciences without and in delivery of health care.

4. The administration of patient service, education, and research programs.

reproduced be 5. to Certain renovations of the physical plant necessary for operating these programs.

Not I• 6. Debts which have been incurred in opera-

AAMC ting the hospital's programs.

the

of b. Hospital Revenue

The identification of all funds available for the operation of the programs of the hospital collections is necessary to determine the final allocation the of monies, from each source, to meet the expenses of the hospital.

from

1. All revenues personally paid by patients; reimbursement from third-party payors, Document Blue Cross, Blue Shield, Medicare, Medi- caid, Compensation; government allowances for own-paying or partially paying patients; government or other allowances or subsidies for support of hospital patient operations; endowments or special funds used in providing services to patients. • -27- • 2. All funds from tuition; endowment; foun- dation; government or private subsidy, gifts, or support; grants; allowances from third-party payors for expenses incurred in the hospital's educational program.

3. Endowments, gifts, subsidies, and allowances from third-party payors or govern- ments; grants or other funds used for research.

permission c. Capital Funds of the Hospital without Capital funds of the hospital for replacement, renovation, modernization, or expansion of the physical plant; for operation of existing programs; or for development of new ones must reproduced be identified.

to 1. Endowments, gifts, and allowances for

Not capital use.

AAMC 2. Funded depreciation.

the of 3. Funds from grants or foundations.

4. Monies from governmental or other public or private sources for capital use.

collections

the 5. Funds available from borrowing.

from 2. Define the costs of educational programs which are hospital expenses. All the educational programs which are expenses to the hospital should be

Document listed, including internship, residency, continuing education, nursing, medical technology, X-ray technology, etc.

a. Classroom, laboratory and, didactic instruction.

b. Teaching patient rounds, case studies, and similar patient • teaching exercises. -28- S c. Grand rounds and clinical conferences.

d. Records review of clinical experience.

e. Library, reading, writing papers, and other similar assignments.

f. Salaries, equipment, space, overhead, maintenance, and administration of program.

Time of associated staff and medical staff, permission nursing staff, etc., spent in the hospital for teaching and administration of teaching without programs.

3. Define the reimbursable professional services for rendering in-patient care.

reproduced

to a. Daily and special rounds for patient care.

Not b. Consultations for patients.

AAMC c. Special examination and technical procedures

the on patients.

of d. Diagnostic tests on patients.

e. Treatments, operations, and procedures for

collections therapy of patients.

the

4. Define the from reimbursable hospital services for rendering in-patient care (including acute short- term care, emergency unit care, and intensive care).

Document a. Hospital technical and professional services, nursing, dietary, and supportive therapies.

b. Bed care services of patients.

C. Ancillary services of laboratory, X-ray, etc., used for in-patients.

-29- • d. Administrative support elements of patient care, including personnel, purchasing, ship- ping, receiving, stores, maintenance, house- keeping, clerical, business, and other general administrative support.

e. Salaries, equipment, space, and overhead.

5. Define the reimbursable services for rendering out-patient care. The ambulatory care, clinic care, or office care of patients is related more

permission to professional service cost and revenue.

without a. Time of the medical staff and the associated staff spent in the out-patient department, in rendering services to patients, and in education in the out-patient department, in-

reproduced cluding administration of services and educa- be

to tion.

Not b. Ancillary services of laboratory, X-ray, etc., I• for care of out-patients.

AAMC 1. the Allocate revenues and expenses of caring of for in-patients in the out-patient department and back to the hospital in the in- patient department.

collections 2. Salaries, space, equipment, maintenance, the and overhead of out-patient services.

from 3. General administrative support of out- patient services.

Document 6. Define the hospital's in-patient department arrallgement for management of revenue derived from medical professional services of both the associated staff and the medical staff and the related expense. Relate these to the expense of professional salaries. • -30- Document from the collections of the AAMC Not to be reproduced without permission I 1 • • 10. 9. 8. 7. f. e. c. d. (If a. from b. media identify expense. Define Define Define in The ment sional hospital's arrangement professional identify -patient 6. rendered 1. The The The 5. 4. The 3. The 2. source The for medical for the the the salaries.

Faculty Chief Attending Senior service charges responsible in Resident. out Intern. physician the professional the -patient. professional Relate -patient. documents out department. billing hospital's billing for by following services professional resident. physician -patient resident. for staff associated rendered. the these -31- staff rendering and and the medical management used member. rendered out services for charging department. receiving payment to member. who service. -patient by the services staff, each was service. staff the expense receiving rendered of in present.) and service hospital arrangement it physician. department revenue the and billing should of hospital's the rendered. in arrange- profes- as derived the related should for • g. The cost center where service was rendered.

h. The hospital or out-patient service which accompanied the professional service.

i. The source of payment.

1. Personal payment.

2. Blue Cross. permission 1 3. Blue Shield. without 4. Medicare A.

5. Medicare B. reproduced 6. Medicaid.

to 7. Private insurance.

Not I• 8. Compensation.

AAMC 9. Industrial-company paid.

the

of 10. Other.

11. For each fiscal year, determine eligible staff.

collections the a. Medical staff, by in-patient professional department and division.

from

b. Associated staff.

Document 1. Intern by professional department.

2. Assistant resident by professional department and division.

3. Resident by professional department and division.

4. Senior resident by professional department • and division. -32- Document from the collections of the AAMC Not to be reproduced without permission • S e. c. d. out ment Eligible 1. 3. medical burse 2. Generally 5. department department 4. Medical Associated 1. 2. 5. 3. -patient relationship fied Each appointing Each staff. they staff senior Chief This division. department ment and Senior Assistant Chief Resident Intern and staff salaries division. staff division. staff indicates medical are staff. and patient year member speaking, resident resident residents resident and by and staff and hospital division. judged by -33- the services resident by professional licensed of will and division. division. professional to to staff should out by medical hospital, the division. by by the qualified third have pay by -patient out to departments. professional professional in need physician -patient by professional chief medical the have professional a the staff parties professional clearly department. for medical in clearly department professional residents to -patient in staff. each should -patient professional see and will identified department department staff depart- fees identi- associated patients associated consider depart- reim- and and and if for Document from the collections of the AAMC Not to be reproduced without permission I. 111 12. roles Define objectives. offer tion these dered rendered. hospital a. bill are physicians, b. c. d. 4. rendering cians, education, Departmentalization be For borne In associated personally private division. A be patient by hospital be to and in operations. a to uniform fully hospital 1970, identified the eligible independently responsibility, on Each clinical cepting ciated must patients bill a medical to collect patients. by medical difficult including medical offer in the and medical To have all and the implemented organization. care. fee staff rendered staff, the may and each out provide hospital for for care, collect setting he hospital, patients -34- a medical with staff structure sense It -patient assist staff has medical medical If payment, responsibility. medical staff all patient the except must whose education, a professional in a of accepted, by member for for that in must department hospital associated and care stable should the member it addition the the be staff staff the services. primary should for management as the professional and published their in must medical be to medical medical to a hospital's consultation education a base able be satisfy organization must method medical and and services render patients be position be objective to staff care considered staff, and for finance the in to staff determined an see staff. All staff within a problems. for finance should a legal service, the staff services expenses hospital asso- specialty the ren- in- of should and posi- physi- to in should ac- is the as to The be Document from the collections of the AAMC Not to be reproduced without permission

11111/ 11111 EN 111111 EN NB Ell NM NM 111111 11111 •

En to gy PO II rPrPOCD PI Ca 1-1' 1-h 1-h I.. Ia• 1-11 M 0 0 II • OCDrCD O las Cri CD V 1:1) M fp ft rt rt Ca % O M M 0. (4) rt (D 0 1 0 0 O MOZ rt 01 11w UI rt ID 0 -- 0 tr I0 6.:al M CD 1-% < M 1—• 1)) II fa- rt • I- O 1< th 0' rf M A) 0 0 CD CI) CI) DI rt O M O 0 • M Co 13) fa, M rt CS) CD M 0 EN Eli OM MEI En ME MEI 1111 ME 11111 OM 11E1 E111 ME NEI MN ME MEI • •

PAYMENT MAY BE MADE WHEN SERVICES WERE PERFORMED BY

permission

without -J cc LU U- cfr U- LLJ 1-4 LLI c:C s-. ti) Ln LU LU cr) Z

V) (-) RESIDENT reproduced a be HOSPITAL MEDICAL to STAFF MEMBER YES YES YES YES

Not WHEN THE PHYSICIAN CHIEF RESIDENT* YES YES YES WHO PERSONALLY AAMC RENDERED OR WAS the WAS SENIOR PERSONALLY PRESENT RESIDENT* 'YES 'YES* 'YES 'YES

of WHEN THE CARE WAS RENDERED

ASSOCIATED STAFF MEMBER NO NO NO NO NO NO

*ELECTED FOR ONE YEAR TO HOSPITAL MEDICAL STAFF

APPENDIX C MEDICAL STAFF ELIGIBILITY FOR PAYMENT OF SERVICES