Assume you are the Chief Compliance Officer for Everytown Memorial Hospital, a not-for-profit hospital which was formed under a Charter "To render needed healthcare services to the citizens of the community of Everytown, and to serve the underprivileg



Assume you are the Chief Compliance Officer for Everytown Memorial Hospital, a not-for-profit hospital which was formed under a Charter "To render needed healthcare services to the citizens of the community of Everytown, and to serve the underprivileged in need of healthcare within our community."  The Board of Trustees has an upcoming board meeting and your job is to review their agenda and determine if any legal issues are presented by that agenda that should be referred to legal council prior to the meeting.

Among the Agenda items for the Governing Board are the following:

1.  To grant general surgery privileges to Dr. Armstrong, a board certified general surgeon with impeccable privileges that meets all required credentials for the requested privileges. 

2. To review the CEO's recommendation to expand the services of the hospital by opening a cosmetic surgery center which will only do cosmetic (not reconstructive) surgeries such as breast enlargements and liposuction through physicians that will be employed by the corporation.  Because they are courting wealthy patients, they could make a lot of money for the Corporation.  Also, because they are only doing such things such as breast enhancements and tummy tucks, the CEO is recommending they waive any formal credentialing processes for the cosmetic surgeons  who will be hired based upon the CEO's review of their resumes and interviews.

3. To grant approval for the hiring of Straight, Laced and Ethical, CPAs, a highly reputable and skilled accounting firm to do their annual audit.  It has been confirmed that they have healthcare expertise, have no conflicts and can perform a truly independent audit  for a reasonable fee.

4.  To hire Dr. Smally, an interventional cardiologist, as an employed physician to perform procedures, and to be the medical director of the Corporation's newly developed Cardiac Care Center. Also, to grant Dr. Smally full interventional cardiology privileges so he can treat patients there.  It is anticipated that Dr. Smally will generate a lot of business since he is well known and trusted in the community and will undoubtedly bring lots of referrals.  Because the center is ready to go, the CEO and Medical Executive Committee are recommending that we waive the requirement of full credentialing which takes time (confirmation of licensing and board certification and review of malpractice history) so the doctor get the center going as soon as possible (we are losing money while it is empty).  If credentialing issues come up after he starts, we will deal with it then.

5.  To raise the CEO's salary to an amount that happens to be 3 times the average salary for a chief executive of a hospital corporation this size. (Unspoken reason for such salary hike is that his father was the founder of the Corporation and still holds a lot of sway around Everytown). 


The Question

Some of the above agenda items present legal issues, some do notList each problematical matter you see and state what the issue might be. Because the only the problematical issues should be referred to counsel (referring non-issues cost us money!), we just need to know which ones might be problematical and why ( what law, regulation or legal doctrine they might run afoul of).

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