Illinois Amends Hospital Licensing Regulations To Better Align With CMS’s Conditions of Participation

In June 2017, Illinois amended its regulations pertaining to hospital licenses within its state. The new rules, promulgated under the Illinois Hospital Licensing Act, 77 Ill. Admin. Code §250 et seq. , serve to make Illinois regulations more closely track CMS’s Conditions of Participation for Hospitals (CoPs). By revising the Illinois regulations to incorporate different corporate and medical staff structures allowed under the CoPs, the state has given hospitals the opportunity to enhance the efficiency of their governance and management.

Under the new regulations, a hospital system may establish one “system board” to serve as the board for all of the hospitals within that system instead of having separate governing boards for each hospital, as was required under the old Illinois regulations. A system board, like a board of an individual hospital, is responsible for the organization, management, control and operation, including the appointment of the medical staff, of the hospitals in its system. The board is also required to consult, at least twice a year, with the individual who is responsible for the organization and conduct of the hospitals’ medical staff. This new unified governing body allows Illinois hospital systems to simplify their decision-making processes and streamline their governance.

The new regulations also allow separately licensed hospitals under a system board to unify their medical staff, provided that such integration is approved by a majority vote of the unifying hospitals’ medical staff members. Such a unified staff will be considered a “committee of a licensed hospital” under the Medical Studies Act which affords it certain protections (for example, information gathered by such a committee is privileged.) The unified medical staff must establish a set of bylaws that provides the processes for self-governance, appointment, credentialing, privileging, oversight, peer review policies, due process rights guarantees, and a process through which members of the medical staff of each of the separately licensed hospital are able to opt out of the unified structure. If the medical staff for a given hospital elects to opt out of the unified medical staff, that hospital would simply operate with an independent medical staff. The regulations provide that the medical staff at each hospital under the system board must be provided the opportunity, no more than every two years, to vote to discontinue the integrated staff system. The regulations also require the unified medical staff to meet at least twice per fiscal year to ensure that the interests of the medical staff at each hospital are heard.

By establishing a system board, Illinois hospital systems can potentially operate more efficiently because they are able to consolidate management and operations into one governing body instead of being required to provide for duplicative infrastructure. By requiring that the system board meet at least twice a year with a representative of the medical staff, the regulations also ensure that the interests of each hospital are heard by the system board. Unifying medical staff across hospitals could also allow hospital systems to capture previously unavailable efficiencies. Like a system board, a unified staff will allow a hospital system to avoid potentially costly duplications and allows for system-wide standardization of credentialing, privileging, and oversight policies.

These changed regulations offer Illinois hospital systems the opportunity to restructure their governance and staff framework to take advantage of new efficiencies. While these new regulations do not require hospital systems to make any changes, the Uma Law Group can help hospitals explore the new possibilities they offer.