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Preparing for Patient Surges Due to COVID-19: What Counsel Need to Know, Part 2
In Part 2 of this podcast series on what counsel need to know to prepare for patient surges due to COVID-19, Andrea Ferrari, Partner, HealthCare Appraisers, speaks with Tom Donohoe, Vice President & Deputy General Counsel, SCL Health, and Melissa Markey, Hall Render Killian Heath & Lyman PC. The podcast covers issues related to resource allocation, including incremental supply contracts, redeployment, and supply chain issues. From the Public Health System Affinity Group of AHLA's Hospitals and Health Systems Practice Group. Sponsored by HealthCare Appraisers.
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Speaker 2:Welcome everyone. This is part two of a podcast, uh, focusing on, uh, what council need to know and what they need to do to prepare for, uh, for patient surges. I'm welcoming today, Tom Donahoe, who's vice president and Deputy General Counsel of SEL Health. Melissa Mark, who's with the Paul Render, one of this two part podcast series focused on staffing surges, uh, and what providers need to know to prepare for, uh, incremental needs in staff, uh, and redeployment of staff. This second part will focus on resource allocation needs, and we're gonna focus on the three general topics, uh, that we focused on in the first part related to staffing, uh, incremental needs, redeployment and reserves, and standby. So, with that, I'm gonna, uh, turn things over to Tom and Melissa and ask them a few questions. Uh, we're gonna start with incremental space, supplies and equipment. Um, can each of you provide an example of an incremental resource arrangement that you've recently addressed or heard about, and any issues related to that arrangement? Uh, do you wanna start, Tom?
Speaker 3:Sure. Thanks, Andrea. And, and it's, uh, a pleasure to be part of this podcast, uh, particularly as we're continuing to, uh, manage all the issues that have come along with, uh, COVID 19, um, as it, as it continues to be a challenge for a lot of our facilities, and I know some of yours and, and Melissa's clients as well. So as we talk about incremental resource, uh, type issues, let me, uh, let me start and I'll, you know, talk, uh, specifically first around, um, equipment and supplies. I, I think this has been an issue on the news that, that many have seen in terms of shortages of personal protective equipment or p p e, uh, ventilators and other types of things. And so, as you can imagine, uh, that is, those are types of things that a lot of facilities are trying to get their hands on as they see the influx of patients come into their facilities. And, and let me even just level set, you know, the current state too, just to be practical about this. I think as of, uh, two, two weeks ago, everyone was in a little bit of a panic mode, uh, trying to get their hands on these types of, these types of resources. Uh, but the good news is, I think nationally, we've seen a little bit of, uh, there's been less patience in facilities, uh, less deaths, um, at least in some states starting to come down. And so hopefully we are seeing a flattening of the curve. And not to say that, that this is not an issue, but the urgency around the issue has come down a little bit, uh, in the, in the past few days. And we certainly hope that that trend, uh, continues. But again, still a key thing for, for hospitals to be prepared for these patients, surgeons to make sure that they have, uh, these types of resources available to them. So when we, again, we get specifically incremental resource arrangements, folks may think, okay, well, we, we need more stuff. And, and so we, we need to go out, we need to order it, we need to leverage our current arrangements, um, or, or get in place arrangements with new vendors. And that's kind of been the case. And it, and it's been a little bit of the wild, wild west in the sense that some of our current suppliers that they don't have, that they've run outta some of these, uh, these types of equipment or can't meet the quotas, uh, that, that we're demanding, uh, at least a after the first few days. And so we are having to turn to new vendors, uh, both equipment supplies, vendors and others, uh, to obtain these resources. And I, I say it's a little bit like the wild, wild west because in the normal course, you have the luxury of negotiating some of these agreements, their terms, and going back and forth with the vendors to make sure, um, you know, you're, you're sufficiently protecting yourself from a legal standpoint, uh, from a risk standpoint. But where resources are scarce, uh, and you're just trying to get your hands on whatever you can, you're a little bit more, uh, in a, in a position where you're gonna have to be flexible. And in some cases, legal counsel's not even gonna get the opportunity to, uh, put their eyes on some of the, some of the things that are being purchased is purchased because your, your purchase teams get wind that some of these things are available, they need to act quickly, and all of a sudden a purchase order, a PO is signed, uh, so that you can get that, that item in, uh, into your inventory to, to plan for, to accommodate some of the patient surges. So as, as, as council, see, this type of thing happening in real time, I guess some of the, some of the things that we've advised, uh, they look out for obviously making sure they're aware of the source from which they're purchasing, uh, purchasing the supply or the equipment. And so if it's a, an untrusted sort of unknown source in a, particularly sometimes in a foreign country that you usually don't do business from, those are things that you should be weary of or mindful of in terms of, uh, whether you're getting the, the type of, uh, type of supply, the type of equipment that, that you're really looking to purchase. So that's certainly one consideration, uh, that, that we've been mindful of in, in purchasing some of the, the items and the equipment that we're looking, uh, in these incremental arrangements. Uh, and then secondly is, is exclusivity, right? And some of your, your existing contracts, you have exclusive clauses to, uh, to purchase certain supplies and certain equipment. And so as you are, as your existing vendors are now unable to meet your needs, you need to be mindful of the fact that you may have exclusivity provisions that that may need to be waived in an emergency or where they can't fulfill, uh, certain orders. And if you have the luxury to reach out to those vendors to make sure they're waiving or get something in writing that they're, that they're willing to do that so that you can go, uh, and purchase that supplier, that equipment through, uh, through a, a new third party vendor. And, and just an example, we, we had a notice from a vendor just the other day who, you know, noted it may have to invoke its for Azure Clause. And, and I know there's a lot of discussion around those as well. Um, yet they were still able to meet 100% of our need, uh, for that certain supply. But if they weren't able to do that, anytime they would give us notice and then they would waive the exclusivity in our contract with them so that we would be able to purchase what we needed to and continue to serve our patients, particularly in emergency circumstances. So I think those are some instances of the types of incremental arrangements we're trying to en enter into where our existing suppliers can't meet needs and some of the issues, uh, that we're trying to, uh, trying to identify and manage, uh, in real time as these things are happening very quickly. And so I'll, I'll, I'll be curious to hear what Melissa's seeing as well, uh, for some of the clients that she's serving.
Speaker 2:Thanks, Tom. Yeah, we, we also feel like we're in the wild, wild west with, with our clients. Um, one of the things that we are seeing a lot of, um, in the p p e arrangements that we're working, um, on, is the difficulty in finding a reliable provider. Um, we are seeing a lot of manufacturers, particularly in, in China, um, and in some other countries that, um, have, um, large factories that are able to produce, um, large amounts of, of goods quickly, is a, a retooling from, um, things like producing windshield washer motors, um, to producing p p e. Um, and, um, in their rush to try and get, um, a piece of this market. We are seeing a lot of falsified CE mark, um, certificates, um, in an attempt to meet the relaxed F D a, um, standards for, um, importation of medical grade masks. Um, there are also importer distributors that are more than willing to bend the rules to try and get these masks into the country. And, um, when you are dealing with these companies, a lot of them are requiring a hundred percent payment upfront. Um, and there is is a big risk of putting a lot of money into the hands of, um, of these companies and then not getting any product, either because it is stopped at the destination or at the, um, shipping port. Um, because the, uh, Chinese customs will not allow it to go out of country, or because it is, um, stopped by us, uh, customs and border patrol as, um, counterfeit, um, goods and not permitted to be imported. Um, it's a complex regulatory area. The, the regulations are continually changing. FDA is continually issuing new guidance about what is permitted, what is not permitted. C D C is continually issuing issuing modifications on their guidelines, um, for, um, for managing p p e and, and handling this disease. And as we learn more and more about covid, um, how it is transmitted, how to treat it, um, the need to allocate resources continues to shift. And it is really, really a challenging area. Um, Tom, you, you mentioned force majeure, um, which is, uh, one of those clauses that right now is, um, both a, a soden A Shield. Um, and one of the things that we are seeing is that there are vendors for some of these, um, urgent supply contracts that are trying to insert insert force measure clauses in new contracts that say that they aren't used for performance, um, in the event of a Force Missouri event, including a pandemic, um, which, um, we're currently experiencing. So essentially they're contracting, um, to provide services or goods that they don't necessarily have to provide because, gee, it's a difficult time right now. Um, obviously that's, um, a contract that we don't have a lot of faith in, and that that's clause is not going to, um, not going to be very useful. Um, another thing that we're seeing a lot of is, um, as you mentioned Tom, um, existing contracts where our vendors have allocation policies. Um, we're seeing a lot of this in the area of, um, critical medications like paralytic agents, um, that are needed to help, um, put those covid patients who are in critical condition, um, onto ventilators. And, um, that's a real challenge because essentially the vendors are saying, we will provide you a hundred percent of what you were ordering before the pandemic hit, but are limiting increases in orders. Um, and, and that is causing some significant sourcing challenges. Um, and I guess finally the last thing I'd say is about the incremental increases is that as we're looking at increasing orders, um, and increasing, um, the amount that we're getting in, um, and entering into either new contracts or, or, um, revising contracts to increase orders, um, if you are hoping to get any kind of governmental reimbursement, but especially FEMA reimbursement, um, there are, um, FEMA contract terms that have to be included. And trying to, to help our vendors understand the importance of these clauses, get them included, um, and, um, not delay the process of getting, um, additional supplies, um, is a delicate balancing act. And, um, recognizing that even though you may not have to do competitive bidding, um, because we are in an emergency and potentially in some cases, um, a, a, a situation of exigency, making sure that you've got all the documentation you need to defend that in the future, um, and maintaining, um, awareness of, um, when the emergency begins and ends, and when the period of exigency begins and ends, so that you are meeting all of those, um, requirements, um, is absolutely critical.
Speaker 3:You know, Melissa, I had it. Just a quick question for you as you're talking. Um, you know, I, those are all great, great perspectives, and I think all issues that, you know, we're seeing in some shape or form, or even if we're not seeing, we're thinking about them as our, as folks are entering into agreements. Um, you know, I, I just curious, you know, as, as outside council, as the way that you're advising your, you know, be at a facility or an in-house council. I mean, has it changed to some degree in the sense that you don't have the luxury of negotiating terms and you're really just kind of saying, you know, I know you need this here, some risks you need to consider, and leaving it to them to kind of make those decisions where, again, in the normal course, you may have a few opportunities to go back and forth with the vendor.
Speaker 2:Yeah, absolutely. Um, there, there are a few, um, transactions that, um, I have, I have winced at, um,<laugh> to be perfectly honest, and especially in this, in the area of P P E and, um, increasingly in the area of our critical medications, um, there to, to a certain extent, a lot of what I'm doing is, um, I am checking to see if the CE mark certificates are falsified or validated, um, checking to see if we have the paperwork that's necessary to confirm that, yes, we think it's likely that this p P e, um, A is actually being made, um, and b will actually clear customs both at the originating country and into the us, um, so that the customer actually will get it. And beyond that, we're simply saying, do the best you can on, on the commercial terms because the, the bargaining power just isn't there.
Speaker 3:Yeah, that makes total sense.
Speaker 2:Tom, Melissa, you both have, uh, raised a lot of interesting topics. I was wondering, um, if you had any specific advice, um, for your clients in terms of protecting themselves from any financial or legal, uh, problems that they might have with these incremental, uh, supply contracts?
Speaker 3:Yeah, I can, I, I can answer'em, Melissa, and then obviously interested in your perspective as well. You know, Andrew, it's a great question and, and I think the environment makes this a little bit more difficult, but typically, as you look at these types of purchasing or sourcing arrangements, couple of the clauses that get negotiated fairly heavily are the limitation of liability or the indemnity or some of those provisions that typically protect, um, you in, in a number of cases from faulty product, from things that may arise. I take, you know, I, I look at, uh, Melissa's, uh, her, her, her comments around, you have car manufacturers now manufacturing things that they don't normally do, and so, you know, enforcing warranties or again, indemnity if you, if, if those warranties are breached and there's a third party claim, et cetera, which again, may seem very, very boring in the normal course of things, um, but become very important in these types of arrangements where people are moving very quick and, and just trying to get what they can. So to your question, Andrea, I, I, I think one of the inherent risks of the environment is, is that it's a little bit more difficult to do that. So where, where folks can, making sure there's the limitation of liability is reasonable. So it's not to, you know,$500 where your potential risk is in the millions, um, based on a potential third party claim or otherwise. Um, and, and that, again, you can get indemnity in other provisions. I, I feel like those might be luxuries under current circumstances, but certainly to the extent council can push those and get something reasonable in there that's going to help, uh, mitigate against any potential risk that might exist. So those are kind of the quick things that come to mind for meaningless. I don't know if there's others, uh, on yours as well.
Speaker 2:No, I totally agree with those. And the other thing I would say is, you know, as you're looking at these incredibly bad contracts, um, keep your eyes open for, um, sneaky traps. Um, I've seen some vendors who have, um, tried to sneak in an exclusive, um, all requirements clause. I've seen vendors that have tried to sneak in, um, ridiculous, um, we indemnify them against everything, and they have no responsibility clauses, I've, you know, you have to don't gloss over the boiler plate in these because, um, because they're, they're trying very hard to get everything they can out of you. And, um, they, they have no loyalty to you and they have no interest in protecting you. I think the other thing that I would say is that, um, prep, prep, act immunity, um, which can be really useful, um, is, um, is not necessarily available for, for those of you who aren't, um, familiar with the prep Act, the Public Re Readiness and Emergency Preparedness Act, which essentially grants immunity for pretty much everything except willful misconduct. Um, when you administer, um, medical countermeasures in the context of a public health emergency, and of course there are definitions for medical countermeasures, et cetera, the biggest thing to remember is, um, in, in a really short summary, is that a medical countermeasure needs to be a drug device or biologic that's either been approved by the fda that is, um, being researched under an investigational new drug or an investigational device exemption, um, through the F fda, um, or is the subject of an emergency use authorization issued by the fda. What is not clear is whether the, um, guidances from F fda where FDA says, we will not object to the importation and distribution and use of alternative P p e, like KM 95 s from China fall within that scope of immunity, because a, a guidance of enforcement discretion of we will not object is not the same thing as an emergency use authorization. It's not the same thing as being cleared for marketing. And so, um, and so you potentially don't have prep Act immunity against third party claims for some of this PPE that's coming in under the enforcement discretion. Um, and so that concern about liability is a significant concern. Um, and, and so what I would suggest to you is that it may be important for you to think about, um, working with your governor and or your legislature and seeking a broader immunity for the youth and potentially the withholding of, um, medical countermeasures given the scope of covid and this pandemic.
Speaker 3:Yeah, and Melissa, I, I would build upon particularly that last thought. I mean, we have, at least in one of the states where we have operations work closely, uh, with the hospital association to, to suggest to the governor or request for the governor that, uh, that he issue a an executive order that would cover that. And, you know, as we get into different topics and this podcast re really a lot of things, right? I mean, it's, um, decisions made around resource allocation. It's, again, everyone's operating very fast, uh, in this environment trying to treat this, this illness, um, with, uh, scarce resources. And so at the end of the day, we have been trying to try to advocate for and have, uh, uh, the governors with the leaders of different states that we're in issue, those types of orders that would protect against or protect against these types of unanticipated liabilities in, in trying to just do the best we can. And I know some states have passed them, uh, but it's, it's been a little bit of an uphill battle in at least some of the states where we operate. So, great thought, great thought.
Speaker 2:So we've been talking about incremental supplies and, and I think a lot of what you're discussing would probably apply with respect to equipment as well. What about space needs are, are either of you seeing, uh, with your clients a need for incremental space, uh, perhaps for additional ICU space or to, um, move a step down unit so that, uh, more space can be opened up on the hospital campus for ICU beds or for testing? Um, have either of you seen anything in that, um, in that vein? And, and if so, what are, what are you, um, struck by and what are, what advice are you giving your clients with respect to incremental space arrangements, leases, and so forth?
Speaker 3:Yeah, Andrea, this one's near dear to my heart. I've spent a, at least over the last week or so, spent a lot of time in this area working with our operations and our planning folks addressing this, this issue in particular. And, and first of all, I think it's, it's important to understand that, again, many hospitals are, uh, and healthcare facilities providers are, are in different spots when it comes to the patient surge, right? I think some in certain, uh, hotspots or would've been deemed hotspots, uh, are expi, their, their capacity is overwhelmed, their space is being overwhelmed within days, uh, and then they're having to look to alternative care locations to really expand, uh, their capacity. And then again, some other, some other hospitals are in states where they've had a little bit more time to plan and to think about, uh, what, what they can do from a space standpoint. And I think that is, that, that's kind of where we are. And, and another part too, I think it's important to understand is there's, and I'll talk about this in a sec second, there's a lot of, of flexibility that's been given around getting into different spaces. But you have to remember that it's one thing to expand into space to treat patients, uh, be it expand your I C U or, or expand other parts of your hospital to treat non covid patients, uh, because you've expanded space for your, your COVID patients, but, but you also have to have the staffing and then the equipment and supplies for that space. So as, as I get into some of my comments, you know, we've really stopped it expanding in our existing facilities, uh, because we feel if we have maxed those out, that's about as much as we could accommodate from a staff and from a supplies and equipment standpoint as well, even if we were able to secure additional space beyond the four walls o of our facilities. So that's been really key to planning. As people have approached, uh, some of our, our leaders in the planning and suggested, Hey, well, we can, we can leave some space here. We can get some space there. It's to level set and say, that's great. We might have the flexibility to do that, but at the end of the day, who, who's gonna staff those spaces? Uh, who, where are we gonna get the equipment, uh, to treat patient in those state, in, in those other spaces? So again, as we talk about space, that's just one part of the equation, uh, to, to really accommodate a surge need in those circumstances, kind of going back to the space, you, you're dead on, right? As, as these patients have come into facilities, particularly, there's been a need to expand ICUs, uh, to accommodate some of the, the ones that are having breathing troubles that need to go on a, a ventilator, uh, and, and receive that type of care. And so that's kind of been the first issue to address. And as you expand your ICU and take over other areas of the hospitals, uh, you know, it affects units that are, that are still operational but aren't seeing covid patients. So that's kind of the expansion of space and, and there's really a lot of things to consider there. I I'm not gonna go into a lot of detail about them, but c m s is you a lot of waivers, uh, from a Medicare standpoint, and that's, that's great, right? They're allowing you to, to surge into other spaces. They have hospitals without walls. Um, they're waiving certain rules, so you can still do that and receive payment, but that's Medicare. Those are Medicare payment rules. Um, and so beyond Medicare payment, you have to consider state licensure rules. So, for example, we had to go in one of our states to our local hospital licensing authority to make sure we could exceed our, our bed capac, our licensed bed capacity. And they were willing to waive that. But that was another part of the equation. And another part of the equation is Medicaid, right? So getting some waivers of rules around Medicaid that are specific to Medicaid for Medicaid payment purposes, uh, are important as well. So, so I think as, as, as folks see some of these waivers come down the line, uh, from a space standpoint, uh, the Medicare waivers, the 1135 waivers that have been issued on a blanket basis are one piece, again, 1135 waivers that may have been issued to the state for Medicaid are another piece. And then again, licensing, uh, restrictions that may need to be waived are that third piece and sometimes go, um, unconsidered until kind of the last moment. So I think those are things, uh, those are all things to consider. And just beyond bed surge, right? Again, Medicare waives some of the hospitals without walls, um, is allowing, um, allowing hospitals to expand into a s c type spaces. But again, our state licensing authority has its own path where it'll waive some of the licensing standards around that you need to apply, uh, is interesting through a survey monkey, uh, type survey. I've never seen the state use Survey Monkey, but this one did, and I think it was, uh, uh, well received cuz it was pretty easy to apply for that expanded space. So again, just one part of the, uh, one part of the equation, um, that, that needs to be considered. So again, as folks are, are, are working as council, working with their, with their planning folks to kind of look, go site by site to what spaces are now gonna be used and, and in a surge type situation of where folks are go. I think those are some of the things that need to be considered, but considered as part of that planning. Um, with the, with the key being, it's a more comprehensive look as opposed to a myopic look through just Medicare, uh, through just the Medicare waivers that I think are getting a lot of attention.
Speaker 2:Totally agree, Tom. Um, I think everybody sort of focused on the section 1135 waivers for a while and was like, oh, look, we have the waivers and forgot the fact that, gee, there are other Reagan story agencies out there that we have to make sure, um, are on board with with this. Um, and I think, you know, the other thing that you mentioned is that this is not a homogenous situation across the country. It's not even homogenous across state. Um, this, this pandemic is hitting different areas differently and, and it is a very fluid situation. Um, the situation changes by the day. And so one of the things that's really important for council, um, to help their clients is to be aware that you really need situational awareness, um, daily and sometimes hourly of the executive orders that have been issued of waivers on the state and the federal level, um, of what the surge conditions are, both of, of patients, but also of personnel, um, and, and their availability. And you need to sort of have an overall perspective of what is going on with respect to your clients and their environment. One of the things that, that is absolutely critical, um, to be able to, to give good advice is to understand what's happening not just at your client facility, but at a community level. And that means that you need to help your client integrate their emergency operations center and their incident command structure into the community emergency operations center and command structure. Um, one of the things that's really important when you start talking about setting up surge, um, facilities, alternative, alternative locations of care, et cetera, is to make sure that what you are doing is making sense, not only for that client, but also within the larger context of the community's response to the surge. Because you don't want to have, um, you know, 12 new alternative care location set up, um, in a two mile radius while the rest of the community has nothing set up over there. And, and, you know, you have to take into account things like accessibility to the alternate care location for emergency medical services, um, utilities, um, you know, telecommunications, uh, all of the boring stuff has to go into that, and you can only do that, um, when you have sort of integration with community emergency operations.
Speaker 3:Yeah, I was just gonna piggyback on that comment, just while you're, you're on that thought. I mean, I, I think you're spot on in the sense that, you know, I mentioned, I think there was a lot of, obviously urgency and anxiety around making sure, uh, we can accommodate patient surges. And so again, you're in these phase one, phase two, um, type planning exercises and then looking beyond your, your, your facilities into the community and what's there, and, and right as you stated, there came a point, at least in Colorado here, where, you know, the state became very involved and, and was creating its own plans and coordination with the hospitals where they started to really step in on those alternative care locations, which again, really kind of took that off the table, uh, for, for us, at least in Colorado. So, you know, whereas if we had been operating at a vacuum, we could have been going out and securing those types of locations or doing that type of planning, either in conflict competition or just in an uncoordinated fashion. Uh, the fact that, you know, we were coordinated there really allowed us to focus on, uh, our existing facilities, the capacity there and, and then be aware of, and part of the plan, uh, to shift patients into, you know, different care settings managed through the state and their emergencies, operations planning, um, if, if it came to that point. So I think that's a very, very relevant and, and very key to the planning piece.
Speaker 2:Yeah, and I think we're gonna see that more and more. A couple of days ago, um, the Penn Pennsylvania issued an executive order that essentially said, all healthcare facilities need to end inventory their P P E, tell us what you've got. We're going to essentially commandeer it and start allocating it to make sure that everybody's got a fair amount. Um, fema um, has issued essentially an order to customs and border patrol essentially saying, um, that they're going to start managing what PPE e can be exported from the US to other countries, um, to try and start managing the P p E problem. Um, these are really, uh, the, the exercise really extensive powers, which are within scope of emergency management acts, um, but are our very obviously rarely exercised powers. Um, and, and so they're, you know, um, a bit, um, surprising to see them exercise and, um, with respect to the no export power can be a bit concerning because, you know, our other countries going to essentially reciprocate and say, that's fine, you don't export, we don't ex export. But, um, but we are starting to see more, um, action at the level of the state where the state is starting to say, okay, wait a second, folks. Everybody's competing for the same resources and it's setting up a very bad sort of bidding war, and we as a state are gonna step in and we're gonna start managing it. And, um, that's, that's going to be very interesting and it's gonna make our job as lawyers very interesting, um, because it's going to change the playing field. So I think you raised a really interesting point that it's kind of a good segue into the next topic that was on our list, which is the redeployment of existing resources. Um, and examples of redeployment might be use of vacant space or, uh, use of extra supplies. Uh, we've also heard in some instances about anesthesia machines being converted to use as ventilators. Um, and, and it may be that a lot of this in the future or, uh, in the not too distant future would be, uh, managed at a state level, um, or a local level. But, um, in, depending on where folks are from preparation to response to potential surge, it may be that some facilities are still dealing with these questions on their own. Um, do you have any thoughts or experience with that type of redeployment at the facility level?
Speaker 3:Yeah, Andrew, a a couple of thoughts, uh, on that one. And, and obviously within our different, uh, care sites or our different hospitals, they're looking at resources and, and where things can be shifted, particularly from a P P E, uh, and an equipment standpoint. And I would presume that's, that's normal course and is going on, uh, with, with hospital systems across the country as they inventory and get a better feel for, for what they have and, and, and what can be deployed. And I'll just make a quick note is, you know, data is really key and important in this situation, right? I think in the early weeks of the surge where people were just scrambling to get things together, it might have been harder to inventory what, what you have and where things are and, and what's being moved out. But I think as the weeks gone on, I've seen, uh, other systems, including our own, get better with their data and, and their tracking and understanding use so that they can appropriately allocate or redeploy, uh, those resources just within the, the institutions themselves. Uh, and, and just a couple other things worth mentioning as far as I, I think which has been an easy or kind of lower hanging fruit in terms of trying to redeploy leverage existing resources is through joint ventures, right? So, uh, it it, for example, a lot of ASCs can't do procedures right now, but they have staff and then equipment and supplies that they're not using. So that has been, like I said, somewhat low hanging fruit in terms of reaching out to people that hospital systems generally work, uh, with on a regular basis or on their campus and a lot of cases, uh, so that they can take advantage of some of the, uh, staff and use those resources and, and equipment, uh, as well. And that, and so for example, in one of our partner physician groups had a handful of anesthesia machines, uh, that we were able, I think you had, you had mentioned the perfect example that you can convert to ventilators, uh, because we had a shortage. And, and that was one arrangement we were able to enter into with them, again, from a legal standpoint, uh, early on in the game, we prepared some form equipment leases and some form staff lease agreements, uh, that had some covid 19 specific type language in there, uh, to, to accommodate, uh, you know, the different risk profile, current circumstances, uh, et cetera. So when those needed to be deployed, um, they could be, and, and we have, and a couple of instances already, and certainly ready to do that, um, to the extent we need to, uh, leverage more resources where they're available. So those are simple. It's, it's folks should be looking to their partners, uh, entering into, uh, some normal course arrangements to, to redeploy some of those now stagnant resources and those in those partner facilities or operations. And then, uh, the second one, uh, that, that I think has come up, uh, are drugs and pharmaceuticals, right? There's been a lot of discussion around, uh, the, the shortage of ventilators, but, uh, I, I, I think the other piece that's come in behind that is that the, the drugs that are required for sedation and other purposes, uh, related to putting people on ventilators have, uh, have, uh, there have been shortages there or increased needs. And so, uh, a lot of facilities and health systems are trying to get their hands on that. And so you have that from a, maybe a, an incremental arrangement. You're trying to purchase more of that, but in some cases you have, uh, partners who have some of those on hand and you're trying to transfer those over to your, uh, facilities. And, and, and I'm not gonna pretend to be an expert in there, but I know there's some restrictions in terms of the transfer, certain controlled substances and others that we've had to raise the issue and, and in our cases didn't have to deal with it or dig in too deep because, um, we're able to get comfortable with an arrangement to allow for it. But I know that may be different in different facilities in different situations. So I think those are a few, a couple or a few instances of where, you know, we've looked to where some existing resources may lie outside of our facilities and redeploy those, uh, uh, for, for our use, uh, and, and obviously to the benefit of our partners as well who aren't, who aren't using those things at, at the moment as well.
Speaker 2:Yeah, I think those are great examples of sort of redeployment. Um, and, um, I, I think that when you're looking to redeploy, uh, you know, our, our federal regulators, I think and, and state regulators of well have, have tried to be very flexible, um, in, in helping us handle this unprecedented emergency. Um, and, um, FDA has issued a number of guidances that, that allow modifications of, um, various, um, medical devices which typically would not be permitted, um, in, in order to allow things like, you know, use of transport ventilators in an inpatient setting and to allow the modification of the anesthesia machines for use of ventilators. Um, you know, there are also a lot of, um, proposals being evaluated about whether you can split ventilators to provide, um, ventilatory support to more than one patient when the patients are appropriately selected and have, and, you know, similar ventilatory needs. Um, one of the things to, to consider, um, when you are, um, engaging in these redeployments is, um, location and, and the environment that they are coming from and going to, and making sure that you have, um, double checked and made any necessary adjustments to the devices in question. Um, for example, veterinary ventilators are essentially human ventilators, but before they are used in a, a human setting, um, first of all, obviously they need to be completely sanitized, but also there are, um, some settings that need to be modified. And so when you are redeploying, you need to sort of sit down and think through where is this coming from? What was it prior use? Um, you know, what do I need to do to make it, um, appropriately redeployed in this new setting? And you also need to think about what kind of retraining do I need to give to my healthcare providers, um, who, you know, they may be very used to a full service ventilator. They may never have dealt with a transport ventilator before. Um, and they need to be retrained, um, on, on that device to make sure that they're comfortable with it. So I'll ask you both a, a similar question to the one that I asked when we were talking about, um, incremental supply contracts. Do you have any tips that you, uh, would give to your clients related to minimizing the financial and legal risks that are associated with these sorts of redeployment arrangements? Taking into consideration, uh, that some of these may be atypical uses for equipment or supplies or space, um, and there are probably insurance considerations, regulatory considerations, uh, just know how considerations, um, are there any particular tips that you would, uh, think are, would be helpful for your clients?
Speaker 3:Go ahead, Melissa. I've been quick to the trigger on a lot of the, the responses here. So once you jump in first
Speaker 2:<laugh>, no worries. Um, so obviously, hopefully you're keeping in close contact with your insurance agents so that they can help you make sure that to the greatest extent possible, you're staying within your coverage. Um, with respect to the use, um, of, uh, modified ventilators, um, some of this is actually under an an, an emergency use authorization. Um, so work, um, the, the lawyers should work with their clients to the greatest extent possible to fit those, um, into the emergency use authorization deck gives you prep act liability protection, um, and that will be, um, a, a, a great, um, benefit to you to the extent that it's not under the Prep Act liability. Again, that executive order that that offers some immunity is gonna be really useful. Another thing to look at, um, is a lot of states Emergency Management Act have, um, immunity provisions, and it's worth looking at those to see if there's any way that you can fit your response activities under Emergency Management Act, um, immunity provisions. Um, other than that, you know, if, if you are getting, um, equipment from another, um, another provider or from another location, um, there may be a document that that, that memorializes that, um, loan or whatever it is, um, consider whether there should or should not be some kind of an indemnity clause or an As is where is clause, um, whether there's any kind of, um, pass through warranties from the manufacturer of that unit that, that you might be able to take advantage of. Um, you're gonna have to think about, you know, whether those warranties are going to be available to you or not, but it's definitely something to think about. What else can you think of, Tom?
Speaker 3:No, I think, I think those are all great, Melissa, from a kind of a, a very, uh, a very specific kind of risk mitigation standpoint. I, I think just maybe going a little more broadly, it's, and maybe some of this is common sense goes without saying, but it, it's, remember that even though you're in a, in a urgent pandemic type situation, a lot of the laws that we typically are mindful of and entering into these arrangements still apply. So, you know, as we enter into arrangements with our partner ASCs, uh, you know, we, we have to structure'em so they ideally meet a kickback safe harbor, um, because there may be physicians on the other end that, that make referral, that make referrals, uh, to, to our hospitals that have ownership and those ASCs. So we we're mindful of that and other similar provisions and, and obviously some of the, uh, you may have some of the new stark waivers, so you can look at some of those as you may need to be a little bit more flexible on some of the terms as you normally would. Uh, but, but again, we, we've, we've cautiously advised, and I think we've talked a little bit about this in part one of the podcasts around those waivers in particular, and in in particular since we had the O'S guidance, uh, just last week, that said, well, they would, they would certainly not exercise their enforcement authority in some of those instances, but not all of them, which makes them more tricky. So, again, I I I, I use as an example to just say, some of the regulatory frameworks still remains, take a breath pause, make sure you're considering, uh, those types of, uh, those types of provisions that that would normally apply even as you're working very fast and trying to be very flexible, um, in that type of, uh, in that type of situation. And, and kind of expanding more on that comprehensive look. It, it goes back to some of my comments around, you know, really evaluating this from a 10,000 foot level in the sense that there may, again, we get excited about maybe a, a Medicare 1135 waiver that allows something. But again, you're, you gotta have to, you have to consider that that broad scope of, of regulatory or other legal implications that may apply there. You know, go down your checklist, make sure you've advised on those, obviously take into considerate consideration current circumstances, uh, to, to do the best that you can to protect against that normal course risk that, that still would likely apply in lot of these situations.
Speaker 2:I think that's really helpful, both of you. Uh, thank you so much for those comments. The last topic, um, that we had on the list to, to talk about with respect to resource allocation was reserve and standby resources. So arrangements where, um, you're planning in advance and keeping some supplies, equipment or space in reserve or on standby, um, but not actively using it, right. Have, have any of you or either of you, uh, encountered any of these types of arrangements? And are there particular issues, uh, that you think are, uh, worth alerting your clients to with respect to these types of arrangements?
Speaker 3:Please go ahead, Melissa. I, I think we need to, even the score here, this will make it two and two with you responding first,<laugh>
Speaker 2:<laugh>. Um, so, you know, I think one of the huge challenges is, um, accurately predicting your needs for resources, right? Because, um, the, the, the are, the are not for Covid is estimated at about three. And, you know, we've been trying to flatten the curve by having stay-at-home orders by, you know, not having, um, people gather together. And, um, so trying to pre predict what, um, what kind of surge is going to hit your community when, and, um, use the CDC C'S burn rate calculator to estimate how many p e you're going to need, um, has, um, has been a big help. But the fact of the matter is knowing when your community's going to hit be hit by a surge and when is an incredibly hard thing to do. So, um, you need to have a little bit of reserve and standby, um, resource capability. You don't wanna be, you know, at the point where at the end of the day you've got a box of, of gloves left and, and that's it. Um, just in time sourcing is not a good thing. Um, when you're at this level of pandemic. On the other hand, you also don't want to be the institution that has a warehouse full of PPE when everyone else is starving. Um, and, and so, you know, I think that it's a challenge to find the right balance of having the appropriate amount of reserve resources that you are going to be able to provide the right kind of care to your patients to provide the right level of protection to your staff, to, you know, be able to take care of your community while not, um, not preventing another institution from doing the same thing. Um, I think one of the things that's really important is to try to maintain situational awareness of where you are now, what modeling says you're going to be looking alike in, you know, two days, four days, seven days, 10 days, two weeks, because our supply chain is so stressed and so stretched. Um, and I think it's also important to monitor things like the FDA's, um, drug shortages list. Um, becau, uh, to, to see, you know, rocuronium just got added to the shortage list last week. That's one of our paralytic drugs when, you know, so, so you should know that that is one of your paralytic drugs that you use. So you need to start planning ahead that, that's gonna be harder to get. Um, how is oxygen looking in your, um, area? You know, if you've got a lot of patients that are gonna be on ventilators and you're gonna need more oxygen, does that need to go onto your monitoring list? Um, I think that as you monitor that, as an institution and as a community, and at the state level, we're all trying to find that balance. Um, and, and, and so we just have to maintain awareness. I think one of the, the big things that I see that, that is a risk that we need to be aware of is, um, trying to prevent doctors and nurses from talking about p p e concerns. Um, because, um, you know, that is not going to end well if you try and threaten a doctor or a nurse, um, that they can't talk about PPE concerns when they have PPE concerns. Um, you know, I think that it's much more effective to let them know how hard you're working to source p p e and that you're aware of their concerns and that you're trying to help address those concerns. Um, because I think that all of the institutions, at least that I know of, are working very, very hard to make sure all the necessary re resources are available to everybody that needs them. Tom, what are your thoughts?
Speaker 3:Yeah, no, I would agree with all of that. Melissa, I, I, one, one term that I think you used, I really like was that situational awareness. And I think that is key, particularly where folks are right now in, in, in their covid 19 journey a lot. I, I think for, I go back to of my comments earlier in the podcast that we're just coming out of a few days where I think folks feel like things have, you know, at least normalized for the moment, and they can get their hands around where they are or what their situation is. And again, I go back to other of my comments in the podcasts around data, right? Uh, Melissa noted, you know, to the extent of facility or system can understand where it's gonna be in two to three days or three to four days, is key to understanding kind of what, what do they need in a reserve or standby type of arrangement. And again, for our part, I know we've, we've made great effort to have that data available so we can make projections, um, or, or, or to the best, to the best extent possible with the data that we have as to where our, our facilities will be. And, and again, I think it really helps with that. And I think we're, so we're just kind of getting over, uh, that point where we can say, Hey, we have at least what we need for today. We're not scrambling and trying to get our hands on everything and every anything and everything. What now do we need to, to accommodate, you know, that, that next three or four days? And so I think we are, again there, I go back to some of the things we talked about early, you know, we're, we have standby, we have identified kind of partners or other vendors that, that we've been in discussions with to get emergent supplies, uh, and, and equipment. And now that we've been able to secure some of that, we, we have them kind of on that standby, uh, or, or we know that they're a source where we can get, again, more staff, more equipment, more things that we might need. And I, I think, again, for our part, we're in the process of continually working to get those types of items, uh, those equipment that staff to make sure we are in a good spot. So, whereas I think a lot of that was dedicated to the emergent need over the last few weeks, now, you know, we are getting into that situation. We are, we're looking to those same resources to say, okay, we're good now, or maybe we need a little bit more now, but, you know, maybe into the future we need to stay in touch to make sure we have those, um, uh, those types of things at the ready. So it's, it's hard to really kind of think about what exactly we've done there yet, Andrea, because I think we're just getting over that curve into where we can start considering that and looking at those types of resources. But again, I think we'll probably piggyback off of some of the arrangements we've entered into or structured to address the immediate surge. Um, you know, as we get into that, get into that phase and have the luxury of, of looking and getting some excess resources to, to meet future needs.
Speaker 2:So I'll say that we've seen, um, two types of arrangements by our clients in, in this vein. One, um, is the reserve arrangement where you have negotiated a contract and you enter the contract, but no, um, transfer of goods or services or space has happened yet. And it won't happen until the need actually arises. Uh, and I guess the risk there is that, um, for some reason folks are not able to execute when the need happens. So the arrangement is in place, but the goods aren't in hand, so to speak. Uh, the other type of arrangement is one where right after execution, there is a transfer of the goods, the space, the services, um, and those are just kept on, um, on standby within the scope of the facility. Um, and, and are there ones needed? But of course, then you have all concerns about storage, um, if it's something that's perishable, um, and about whether you're taking more than you need and, and locking up a resource that someone else could use. Um, so a lot of interesting questions for sure. Um, we're, we're just about at the end of our, our hour, and so I wanted to see if either of you had any closing remarks or things that, uh, you wanted to leave listeners with before we re partway? I was just gonna say very quickly, um, I, I think the one thing I would say is that, you know, our, our regulators have tried to be flexible. Um, we are all learning, this is a learning experience for everybody. Um, and, um, I think the one thing I would say is that I think it's critically important for lawyers as we work through this to recognize the incredibly difficult situation that our healthcare providers are facing, and to recognize that incredibly difficult decisions are being made, um, that are counter to what our healthcare providers have been trained to do, and to what their, their impulse is to do, and our creativity and our flexibility in helping resources be sourced and be delivered, um, that will protect them, that will allow them to treat patients, um, but that are still both safe and effective and meet basic regulatory requirements is absolutely critical. Um, and, and so as we go into this, um, I think that that our both creativity and our flexibility, um, need, need to be exercised to the greatest extent possible.
Speaker 3:Yeah, those are, those are great comments. Melissa, I, I should have just had you answer all of the questions first because I think you provide some really valuable insights. Um, so, so I would echo those and, and, and just piggybacking a little bit off of them, I, I would say that, and I think this is consistent what we've, what we've heard from our outside council and what I've seen in a lot of the legal industry, uh, or the healthcare legal industry publications, uh, on this is you, you're exactly right. We're, we're working in this, this crazy environment, um, where I, I feel just trying to keep up with, uh, keep up with what the regulators are trying to do is, is more than a full-time job so that we can leverage some of that flexibility. But I think where, where we've ended up, and again, consistent with that message I re that I, uh, that referenced is we're trying to structure as much as we can consistent with, with where we've been and what applies, right? And the knowledge that we're gaining from interpreting some of these rules on a, or the, the evolving rules and flexibilities on a, on a daily, if not hourly basis. But I think the position we're taking is, is to use them defensively, right? Is, is at the end of the day where we can, and where we have the luxury of doing it is looking a lot of these flexibilities and these other things as, uh, in the event we, we have to be in a defensive situation as opposed to, um, in every case try to, uh, proactively and, and more aggressively, um, uh, consider them. Because again, a lot of details are, are yet to be determined. There's other things that may need to be considered. Um, so again, we try to be a little bit more defensive about that, where we, and I, but I put an emphasis on the, where we can, acknowledging, to your point, Melissa, that impeding providers trying to provide care, uh, to this patient population in very trying circumstances is obviously the main thing, uh, we are trying to support at the end of the day and give the, give the latitude to, to the extent we can.
Speaker 2:Well, thank you Tom and Melissa. I I think you've both provided some really great, um, examples and some, uh, good insight that I think will be very helpful to people. Um, uh, thank you all for listening. Uh, to this podcast. This is one in a series. So this sponsored by the Public Health Systems' Affinity Group. Um, and we hope that you'll join into future sessions. Thank you so much.