Newsletter Sign-up

By PATRICIA VOWINKEL, who has written about insurance-related issues for more than 10 years and lives in New Jersey

At Cabell Huntington Hospital in Huntington W. Va., some medical personnel have gone back to drawing on paper charts of the human body as a means of documenting a patient's condition upon admission.

As of Oct. 1, Centers for Medicare & Medicaid Services will refuse to pay for a total of 11 conditions it identifies as events that are "reasonably preventable" during a Medicare beneficiary's hospital stay.

Other payors and organizations have also developed similar policies and guidelines as well. Private insurers, for instance, have been way out in front on this.

But Medicare, and Medicaid at the state level, are the biggest purchasers of healthcare in the country, says Kathleen Shostek, senior risk management analyst at ECRI Institute, an independent nonprofit that researches the best approach to patient care.

"So when the government makes this change, people take notice," she says.

While hospital risk managers certainly share in the goal of keeping patients safe and preventing serious medical errors, there has been a great deal of concern about the practical ramifications of these rules and guidelines as well as some of the possible unintended consequences.

Some of these concerns include:

--Whether all of these events really can be prevented all of the time.

--Identification of one of the conditions and when it was acquired.

--The expanding list of "serious preventable errors," which could lead to an increase in medical malpractice claims.

--Whether these events will become the new strict liability.

--The financial ramifications of no reimbursement on hospitals.

--Whether a punitive approach will discourage healthcare professionals from reporting errors.

Risk management experts advise that hospitals take an enterprise approach to managing this risk because it will affect many operations within the facility.

THE CONDITIONS IN QUESTION

This issue has moved into the spotlight with Medicare's decision to no longer reimburse hospitals for the treatment of what it calls "hospital-acquired conditions."

In addition, to not being reimbursed by CMS, the facilities also cannot bill the beneficiary for any charges associated with the hospital-acquired complication.

The conditions for which Medicare will no longer reimburse hospitals for treatment include pressure ulcers; falls and trauma; surgical site infection after bariatric surgery for obesity, certain orthopedic procedures, and bypass surgery (mediastinitis); urinary tract and vascular infections resulting from improper use of catheters; foreign objects left in the body during surgery; air embolisms and blood incompatibility.

CMS has since expanded this list and added three conditions: deep vein thromboses, pulmonary emboli associated with knee and hip replacements and certain manifestations of poor glycemic control.

In addition, Medicare is initiating something called the National Coverage Determination process to review Medicare coverage of three "never events" or egregious hospital errors that theoretically should never happen--surgery on the wrong body part, surgery on the wrong patient and performing the wrong surgery on a patient.

Efforts to bring attention to serious medical errors and improve the quality of patient care have been under way for some time.

In 2001, the Joint Commission came out with a set of patient safety accreditation requirements, which included a requirement to disclose the presence of a medical error. Then in 2002, the National Quality Forum published a report, "Serious Reportable Events in Healthcare," which identified 27 adverse events. Those events, now updated to 28, were considered serious, largely preventable and of concern to both the public and healthcare providers.

According to the NQF, "never events" are errors in medical care that are clearly identifiable, preventable and serious in their consequences for patients.

Other examples of "never events" include retention of a foreign body in a patient after surgery; mismatched blood transfusion or a major medication error.

Some states have enacted legislation requiring reporting of incidents on the NQF list.

In its 2007 Quality and Safety Survey, the Leapfrog Group, an association of large employers concerned about healthcare costs and quality, stated it would give hospitals the opportunity to receive public recognition for agreeing to certain conditions if a never event occurred in their facility.

Those actions are apologizing to the patient and or family affected, reporting the event to the appropriate agencies, agreeing to perform a root cause analysis and waiving costs directly related to a serious reportable adverse event.

THE RISK MANAGEMENT RAMIFICATIONS

Although healthcare professions want to prevent serious medical errors and improve patient safety, they are concerned about the possible ramifications of this latest approach.

With this rule from CMS, hospitals are now expected to prevent these 11 conditions from happening at their facilities or else CMS will not reimburse them for the treatment.

"I think there isn't a person alive, especially working in risk management, that wouldn't support the goal of patient safety," says Ellen Venditti, director of corporate risk at Cape Cod Healthcare.

"Before the patient safety movement became popular, the goal was to keep patients safe. The goal was to prevent medical malpractice and the way to do that is to keep patients safe," Venditti says. "Preventing never events isn't anything new for us."

But preventing all of these conditions all of the time may not really be possible.

"We would want those to be preventable," says Jean Turvey, clinical risk consultant at Lockton. "In reality, in my heart, I don't believe they are," she says.

With some of the conditions, there is no argument. Many organizations, for instance, do not bill someone for a wrong-site surgery.

Other conditions, such as pressure ulcers and falls, may not be preventable all of the time. Even with the best care, some patients, because of their medical conditions, may simply be more prone to those types of problems.

"Even if every practical guideline is followed, there can still be an unexpected outcome," Venditti says. "Some things that are not necessarily preventable are on the list."

The failure to prevent these conditions means not only no reimbursement from Medicare, but it could open the door to an increase in malpractice lawsuits.

LIABILITY IMPLICATIONS

Hospitals and other healthcare professionals have always been at risk for medical malpractice. But if CMS says that this list of 11 hospital-acquired conditions is preventable and that it won't pay for them, this could encourage more patients to bring a malpractice case against their hospital.

"The hospital liability claims probably increase in frequency as the public becomes more aware that Medicare is not going to pay for conditions it deems preventable," ECRI Institute's Shostek says.

Even more troubling is that these hospital-acquired conditions could become the new strict liability, says Ruth Kilduff, managing principal at Integro Insurance Brokers. In a presentation that Kilduff gave at RIMS earlier this year, she raised the question about whether never events would become events that hospitals could not defend.

In tort law, strict liability is the imposition of a liability on a party without a finding of fault, such as negligence or tortuous intent. The plaintiff needs to prove only that the tort happened and that the defendant was responsible, according to Kilduff.

Neither good faith nor the fact that the defendant took all possible precautions is a valid defense, she says. Strict liability often applies to those engaged in hazardous or inherently dangerous ventures.

"I worry if we don't think this through, never events may show up as the next strict liability," Kilduff says. Cabell Huntington's Smith voices the same concern: "It's almost getting to be strict liability in some of these areas," he says. "If everyone says they should never occur and they do occur, then you have no defense, it's just what are the damages," he says.

DISCLOSURE AND APOLOGIES

The obligations to disclose these incidents publicly and to apologize are also a cause for concern. There are two views about apologies and whether they can help or hurt a hospital's case.

On the one hand, in some states, an apology, depending on the wording, could be considered an admission of liability.

"State laws vary on the protection of these apologies," Shostek says. "Risk managers must know the laws in their states and approach apologies accordingly."

On the other hand, apologies can often help to defuse possible lawsuits.

"There's some opinion to support the idea that claims can be positively impacted through good communication and a good relationship between the facility, doctor and patient," Lockton's Turvey says.

By apologizing appropriately, healthcare professionals can alleviate patient anger upfront, demonstrate compassion and begin to resolve a problem outside of the courtroom.

It is important, however, for hospital risk managers to know whether they could be held liable for any apology and to be able to coach other healthcare professionals on how to apologize without putting the hospital at risk.

Saying "I am sorry this happened to you," for instance, might be acceptable, Kilduff says. But saying "I am sorry I did this to you," could be seen as an admission of guilt and put the hospital at risk.

The liability risk, however, is secondary to the financial risk that nonpayment would represent for hospitals, which are already operating on very thin margins and in some cases even teetering on the brink of financial insolvency.

"The concerns for risk managers begins with the financial, with CMS not paying," Shostek says. "So preventing hospital-acquired conditions should become a strategic imperative."

RISK MANAGEMENT ISSUES

To try to address these exposures, the ECRI Institute says hospitals can prepare by assembling an enterprise-wide response team that may include a cross-section of members from a number of departments.

Complying with the rules that require hospitals to identify these incidents, disclose them, apologize, waive the billing and work to keep them from happening again is another significant challenge.

Determining whether the patient acquired the condition in the hospital, however, is not always so clear cut.

That is why it is important for healthcare professionals to assess a patient carefully on admission to determine whether the patient acquired the condition before entering the hospital or while in the hospital.

For some hospitals, like Cabell Huntington, that may mean drawing on charts to indicate the site of an infection. In some cases, it may even mean taking photographs to be able to document the patient's condition upon admission.

If the condition was acquired in the hospital, it is then important to determine at what point during the patient's stay so that the appropriate charges are waived. If for instance, the condition was acquired after the operation, the charges for the surgery may still be legitimate, but if it was acquired during surgery, then those charges might have to be waived.

The risk manager also will need to coordinate with the billing department to make sure problem charts are flagged for special handling, and that bills are coded properly and the right fees are waived.

It is also a challenge for risk managers to make sure that all of these events are being reported.

One of the questions risk managers have to ask themselves is "Are the systems in place to capture the never events and make sure that you know what's going on," says Cabell Huntington's Smith, who is the immediate past president of the American Society of Healthcare Risk Managers.

This new CMS rule, however, could create an incentive for healthcare professionals to avoid reporting these kinds of incidents and could create a challenging image problem.

For instance, it may be unclear whether a hospital that has reported a number of cases of hospital-acquired conditions actually has problems with patient safety or is simply doing a good job of coming forward and identifying these incidents. A hospital that has not disclosed any hospital-acquired conditions, however, may be perceived as hiding something.

"That's where it gets a little scary," says Barbara McCarthy, associate vice president, risk management for Northeast Health Systems. "The punitive approach and patient safety don't go together," says McCarthy, who is also president elect of the Massachusetts Society of Healthcare Risk Managers.

These incidents can also erode the relationship between doctors and hospitals because the CMS ruling affects hospital reimbursement but not the doctor's professional fee, McCarthy says. It also can set up an adverse relationship between the doctor and the patient if the doctor decides not to waive the professional fee.

To be sure, there are still a lot of questions out there on this topic.

"We really don't know what all the unintended consequences will be," Lockton's Turvey says.

October 1, 2008

Copyright 2008© LRP Publications