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Basis of Laws, Courts, and Contracts – Contract Summary Report AIU Regional Hospital

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Basis of Laws, Courts, and Contracts – Contract Summary Report AIU Regional Hospital

Types of Contracts

Healthcare organizations like AIU Regional Hospital utilize various types of legal contracts to formalize relationships and services with patients, providers, partners, and vendors. Understanding the basics of contractual agreements facilitates smoother operations.

Employment Contracts

These include contracts specifying terms between employers and staff governing aspects like compensation, benefits, expected workplace conduct, reasons for terminated employment versus voluntary resignation, and non-compete clauses limiting post-employment options based on trade secret knowledge (Pathstonepartners, 2023).

Provider Contracts

Outlining expectations between hospitals and individual or physician group partners encompass issues like access to facility space and equipment, call coverage quotas, electronic health record (EHR) usage procedures, quality metric tracking, data sharing protocols, medical malpractice insurance coverage minimums, and if/how providers get compensated.

Business Contracts

Service agreements for necessities like cleaning, food supplies, biomedical equipment maintenance, employee health screenings, or electronic medical record systems span detailed expectations regarding performance, pricing, renewals, and confidentiality protections. Breaches allow contract termination (Pathstonepartners, 2023).

Insurance Contracts

Between patients, hospitals/physicians, and private or government payers, these contracts guarantee reimbursement rates and cover inpatient services or outpatient procedures based on technical billing codes if clinical appropriateness and care quality expectations are met per diagnosis. Non-compliance risks no payment.

Patient Consent Contracts

Consents outline patient and provider responsibilities associated with treatment plans, alongside foreseeable material risks given interventions, alternatives, and clarification that consent can be withdrawn. Signed documents represent legal agreements to render and receive care voluntarily.

Laws Governing Contracts

When healthcare organizations enter into binding legal agreements, whether with patients, providers, or vendors, they must comply with relevant federal and state contract laws or otherwise risk financial penalties, terminated relationships, and lawsuits, given the high liability (Judson & Harrison, 2020). As such, a key law is the Statute of Frauds, which requires certain contracts exceeding one year of service, involving estate or property interests over $500 in value, or payment guarantees for another’s debt to be in writing. The Uniform Commercial Code (UCC) is another critical standard that legally binds commercial transaction laws between states regarding sales of goods, leases, negotiable instruments, and secured transactions. This governs routine business purchase orders at healthcare facilities.

Labor laws like the National Labor Relations Act enable collectively bargained agreements between employers and union representatives on working conditions, pay, benefits, non-discrimination policies, and termination processes. Healthcare organizations must ensure contract compliance with these laws. Further, Stringent Anti-Kickback Statutes prohibit improper exchanges of money or items aimed at inducing patient referrals or influencing purchasing decisions involving federal healthcare programs. Strict rules govern contracts between hospitals, providers, and external business partners to prevent fraud violations.

Moreover, physician self-referral is addressed through Stark Laws, which prohibit Medicare/Medicaid patient referrals to entities where the physician or their family have financial ties unless ownership interests meet exceptions. This impacts contracts with hospital-owned specialty service lines. With so many federal and state laws shaping contract creation, dissolution, and enforcement, healthcare organizations rely heavily on their procurement, contracts, and legal counsel teams to navigate this complex landscape (Judson & Harrison, 2020). Following proper protocols and seeking expert guidance reduces risk exposure when entering into binding agreements across the organization’s many business relationships and transactions.

Implied versus Expressed Contracts

Expressed Contracts

Written or verbally expressed contracts document offered terms of service both parties agree to be legally binding. They get signed, showing mutual consent to specified responsibilities, activities, and payments (LII/Legal Information Institute, 2019; Wilmot-Smith, 2022). Even verbal contracts are legally enforceable, provided sufficient evidence supports what both sides promised to deliver. Breaching expressed contracts risks financial and legal consequences. Most healthcare contracts are expressed.

Implied Contracts

Alternatively, implied contracts lack explicitly written or verbalized expectations. They are informal agreements assumed through behaviors, past dealings, or industry norms without actively negotiating terms (Wilmot-Smith, 2022). For example, patients entering an ER expecting assessment and treatment consistent with presenting symptoms constitute an implied contract, although they likely signed no forms. Similarly, lacking verbal discussion, if a physician routinely covers hospitalized colleagues’ patients, mutual aid is implied. The challenge is that implied contracts’ ambiguity heightens conflict likelihood when presumptions differ between parties about the intended scope of services, costs, or causes for dissolution. Without clarifying specifics upfront, unreasonable expectations often arise. This underscores the need for expressed contracts documenting consented terms to prevent misunderstandings. Per court precedent, however, both expressed and implied contracts are enforceable.

Physician and Patient Contracts and Managed Care

The increasing prevalence of value-based care payment models incentivizing cost efficiency and health outcomes is accelerating industry integration. Independent physician practices get acquired as health systems aim to broaden their coordinated care networks and referral channels (AMA, 2023). Consequently, more physicians become direct hospital employees or affiliates via contracted arrangements covering clinical, operational, and financial expectations.

Employment Agreements

Comprehensive employment contracts outline compensation models, clinical expectations, workplace policies, and administrative duties for directly hired physicians. Compensation often includes a base salary plus incentives tied to efficiency and patient health outcomes (AMA, 2023). Expectations cover productivity quotas, call coverage, use of order sets, and care pathways. Policies address behavior standards, EHR access rules, and time off. Administrative duties involve committee roles, teaching, and peer reviews. Contracts also define termination processes initiated by either party. Though agreements can leverage incentives and metrics to advance care consistency, physician autonomy perspectives must balance to prevent losing talent.

Affiliation Agreements

Alternatively, independent physician groups contracting with hospitals committed to providing specialized services unavailable within the system, like trauma surgery, neonatal intensive care, psychiatry, or outpatient infusion therapy. The agreements define clinical scope, reimbursement models, and expectation compliance. For example, trauma surgery response times to emergencies. Groups failing quality benchmarks risk non-renewal. Hospitals supply infrastructure, staffing, and administrative support in exchange for the expanded care capacity that affiliation provides.

Implications of Managed Care

As health systems grow via mergers and acquisitions, their networks encompass more covered lives. This expanded volume increases bargaining power when negotiating reimbursement rates with major insurers contracting for services. Physicians employed in these integrated systems must follow payer rules that often limit care options or shorten hospital stays to control costs, which can frustrate patients. Providers balance clinical judgment and patient preferences with agreements that dictate aspects of treatment planning for managed care plan members to ensure insurer reimbursement. This represents a key ethical dilemma and communication challenge. Contract awareness helps physicians explain realities influencing care pathways under different insurance plans to foster patient understanding.

Patient Contracts and Responsibilities

Informed Consent

By voluntarily signing a treatment consent form, patients enter an expressed contract with providers to undergo interventions outlined in the document provided benefits and risks are adequately explained during consent conversations (Gamboa, 2023; Judson & Harrison, 2020). Consents also represent legal evidence that care complies with disclosure standards should complications arise, prompting lawsuits. Patients agree to comply with clinical instructions, while hospitals consent to provide procedures per accepted standards. Breaching terms could nullify liability waivers, leaving entities vulnerable litigiously.

Code of Conduct

All patients, visitors, and staff must adhere to the organizational code of conduct policies that promote safety and respect. Expectations cover appropriate noise levels for rest, creating an inclusive and diverse environment, maintaining cleanliness while avoiding smoking and vaping, and preventing violence or aggression. By entering as inpatients or for outpatient services after being notified of policies, patients impliedly consent to follow the standards that enable a secure, therapeutic environment. Failure risks removal and service termination since the codes represent implied contracts where adherence preserves access. Establishing and enforcing clear conduct codes supports organizational cultural values and contractual obligations.

Financial Responsibility

Before nonemergent services, patients routinely sign statements that they agree to pay applicable insurance copays/deductibles (Niedzwiecki et al., 2019). Guarantors also list payment sources on file should claims get denied, requiring self-pay. These documents act as promissory notes that treatment costs accruing directly to the patient will be satisfied per itemized bills sent post-discharge. Breaching payment obligations damages or hurts organizational revenue cycle operations and risks bad debt accumulation both for hospitals and affiliated physicians submitting claims.

Summary

AIU Regional Hospital relies extensively on contracts to deliver patient care, engage specialty providers, purchase vendor services, and recruit workforce talent. Multiple laws govern agreements, which organizations must continually monitor to ensure compliant operations. Contracts also increasingly impact physicians within integrated health systems as consolidated organizations leverage employment deals and performance terms to influence behaviors that control spending growth and care variation based on insurance mandates. Open provider-patient communication remains imperative so patients understand how modern payment models might dictate aspects of clinical care based on benefits coverage. Meanwhile, staff at all levels must uphold their workplace commitments, and patient responsibility agreements as expressed or implied contracts remain legally binding. AIU Regional Hospital will sustain providing accessible, affordable, and high-quality care by upholding the obligations set forth across this myriad of healthcare contracts.

References

AMA. (2023). Understanding physician employment contracts. American Medical Association. https://www.ama-assn.org/medical-residents/transition-resident-attending/understanding-physician-employment-contracts

Gamboa, A. (2023, July 19). Common ethical issues in nursing practice. NursingEducation. https://nursingeducation.org/blog/common-ethical-issues-in-nursing-practice/

Judson, K. J., & Harrison, C. H. (2020). Law & ethics for health professions. McGraw-Hill Education.

LII / Legal Information Institute. (2019). Express Contract. LII / Legal Information Institute. https://www.law.cornell.edu/wex/express_contract

Niedzwiecki, B., Pepper, J., & Weaver, P. A. (2019). Kinn’s the administrative medical assistant e-book: Kinn’s the administrative medical assistant e-book. Elsevier Health Sciences.

Pathstonepartners. (2023, June 20). Guide to different types of healthcare contracts. PathstonePartners. https://www.pathstonepartners.com/blog/types-of-healthcare-contracts/

Wilmot-Smith, F. (2022). Express and implied terms. Oxford Journal of Legal Studies, 43(1). https://doi.org/10.1093/ojls/

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Question 

Assignment Details

For the next 5 weeks, you will have a project that will begin in Unit 1, continuing through all units, and ending in Unit 5. Your discussion and project will be connected each week, so you must complete your discussion work on time.

Unit Topic
Unit 1 Laws, ethics, accreditation, and moral values
Unit 2 Basis of laws, courts, and contracts
Unit 3 Medical records, electronic medical records, and health information technology
Unit 4 Fraud, abuse, security, and confidentiality
Unit 5 Workplace legalities, discrimination, OSHA, CDC, and CLIA

The CEO of AIU Regional Hospital believes that some practitioners misunderstand their responsibilities related to contracts within the organization. She has requested that you write a Contract Summary Report process summarizing contracts, how contracts apply to physicians, patients, the organization, and physician and patient responsibilities.

Basis of Laws, Courts, and Contracts – Contract Summary Report AIU Regional Hospital

Your Contract Summary Report process must include the following topics:

Deliverable Requirements: Prepare the Contract Summary Report process with at least 5 pages written in APA and 5 sources using APA formatting. Title and reference pages do not count as part of the 5 pages.

Submitting your assignment in APA format means, at a minimum, you will need the following:

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