Risk Management Implications of “Never Events” June 2008 Paula G. Sanders, Esquire Partner Post & Schell, PC

Risk Management Implications of “Never Events” Paula G. Sanders, Esquire Post & Schell, PC 17 North 2 nd Street, 12 th Floor Harrisburg, PA

The “Never Event” Conundrum Treatment Event Documentation Reimbursement impact & liability exposure Physician/patient communication

Carrot or Stick? Pay for performance Quality initiatives: high quality, patient-centered and efficient Punitive measures? Payors move from passive to active purchasers of care “A joint effort between the healthcare provider and the coder is essential... The importance of consistent, complete documentation in the medical record cannot be overemphasized.” (CMS Transmittal #1240 (May 11, 2007))

Historical Overview Reports of the Institute of Medicine (of the National Academy of Science) –To Err is Human (1999) Up to 98,000 deaths occur annually as a result of medical error –Crossing the Quality Chasm (2001) Addresses broad quality issues and establishes six aims of care: safe, effective, patient-centered, timely, efficient and equitable

Historical Overview Interests of federal and state payers, employers, commercial insurers and consumers in: –Quality, safety and cost controls –Leads to ever evolving reimbursement schemes designed to address these control issues – Payment solutions to quality problems

Pay-for-Performance New Pay for Performance models –At the federal and state level, models are being implemented in the hospital setting (movement from financial incentive for voluntary reporting to mandatory reporting, and finally, results- driven payments) –CMS intends to implement appropriate like models in the physician setting as next step (physicians at financial incentive for voluntary reporting stage) Physician Quality Reporting Initiative started 2007

What’s in a Name? IPPS: inpatient prospective payment system MS-DRG: Medicare-Severity DRG CC/MCC: “complications & comorbidities” AND “major complications & comorbidities” POA: present on admission HAC: hospital-acquired condition

Present on Admission Indicators Y: Diagnosis present at time of inpatient admission N: Diagnosis not present at time of inpatient admission U: Documentation insufficient W: Condition is clinically undetermined 1: Code is not reported/not used and is exempt for POA reporting

Federal Mandate for “Never Events” Established by the Deficit Reduction Act, Section 5001(c), Medicare FY 2008 IPPS Final Rule Identifies “serious reportable events” or “never events” Must be reasonably preventable through the application of evidence-based guidelines No payment under a higher DRG despite services rendered if condition not Present On Admission (POA) Applies to 8 Hospital Acquired Conditions (HAC’s)

Medicare Never Events – Reasonably Preventable High cost, high volume, or both Assigned to a higher paying DRG when present as a secondary diagnosis Reasonably prevented through the application of evidence-based guidelines And acquired during hospitalization if not POA

Medicare is Not Alone Several states no longer pay for “never events” or preventable serious adverse events (PSAEs) –Pennsylvania has a no-payment policy for 28 PSAEs (copy attached as handout) –PA legislation to extend non-payment authority to all health care payors passed by a vote of Commercial payors follow suit –11/07: B/C B/S announces its plans to implement nonpayment for “never events” –1/08: Aetna announces it is incorporating “never events” in its new hospital contract templates and follows Leapfrog recommendations (report, remediate, waive costs, apologize)

Medicare Never Events: 10/1/08 Object left in surgery Air embolism Blood incompatibility Catheter-associated urinary tract infection Decubitus ulcers – stages 3 & 4 Vascular catheter-associated infection Surgical site infection –mediastinitis after coronary surgery Falls – fractures, dislocations, intracranial injury

Proposed Never Events – Comments Due 6/13/08 Surgical site infections following elective procedures Legionnaires’ Disease Glycemic control Iatrogenic pneumothorax Delirium Ventilator-associated pneumonia (VAP)

Proposed Never Events – Comments Due 6/13/08 Deep vein thrombosis (DVT)/Pulmonary Embolism (PE) Staphylococcus aureus Septicemia Clostridium Difficile-Associated Disease (CDAD) Methicillin-Resistant Staphylococcus aureus (MRSA) Deletion of “N” & “U” POA indicators

Critical Elements Assessment and documentation of POA conditions (conditions existing at the time the order for inpatient admission occurs) –ED notes –Admitting note –H&P –Progress notes How can coders capture the POA indicators at time of admission?

Changing Practices Avoiding HAC’s: –Use of evidence based practice guidelines –Reliance on risk management best practices Goals: to identify patient risks, anticipate needs, and protect reimbursement Despite best efforts, it is inevitable that a patient may sustain a preventable injury

Disclosure Why disclose to the patient? –American College of Physicians Ethics Manual (2005): “…physicians should disclose to patients information about procedural or judgment errors made in the course of care if such information is material to the patient's well-being. Errors do not necessarily constitute improper, negligent, or unethical behavior, but failure to disclose them may.”

Disclosure State law requirements to other agencies? State law requirements to patients? Other considerations? –Diffuses anger (no appearance of a cover-up) Explanation of benefits and patient notice –What will the EOB say about non-payment? Is risk management notified?

Disclosure or Apology? Patient Disclosure/Apology programs –Leapfrog Recommendations Report, remediate, waive costs, apologize Elements of disclosure –Explain what happened (to the extent known) –Say “I’m sorry” it happened (empathy) –Emphasize that you (and/or the institution) take the matter seriously and will evaluate any and all steps necessary to avoid recurrence –Communicate results

Disclosure or Apology? After initial disclosure –All care appropriate? Reinforce empathy and share basis for conclusion –Below the standard of care? Apologize and admit fault (take responsibility)? Discuss compensation? A better model?

Disclosure or Apology? What happens with the apology? –Limitation on admissibility of apologies 29 states have laws protecting a provider’s apology from being used as evidence or as an admission of liability in a lawsuit –Admissions of fault are admissible as evidence Insurance ramifications –Coverage? –Duty to cooperate?

Liability Exposure “Never Events” and use at trial “Reasonably preventable through the application of evidence-based guidelines” May depend on state by state rulings –Negligence per se –Use of expert testimony If admitted, practical effect of shifting burden to defendants to show injury/outcome was not avoidable or does not reflect a departure from the standard of care

Criminal and/or Civil Exposure What is the liability for submitting a claim for payment of a “never event?” Recoupment or non-payment Potential false claims liability Repeated failures to identify POA Pattern of erroneous submissions Data matching between state and federal databases by Medicare Program Safeguard Contractors/RACs Maine prohibits knowing or willful submission of claims for payment (copy of law attached)

Overcome the Confusion

How Do You Break Down The Silos? Who is training about “never events” and POA? Are staff aware of “never event” consequences? If only the facility suffers a financial impact as a result of “never events,” how does a facility get staff buy-in and support? How best to integrate risk management, compliance, clinical teams -- nursing and physicians, utilization review, peer review, mandatory reporting, quality improvement, HR, coding, medical records and billing?

How Do You Break Down The Silos? How do you keep track of the different reporting requirements and definitions? Who is responsible for tracking? How do you handle potential whistleblowers?

Continuing Challenges How do you ensure consistency between all of the various reports and the medical record? Who reviews patient notifications, disclosures and apologies? What mechanisms are in place for capturing information on a timely basis? What are the consequences of submitting a claim for a never event? How do you make this an issue for your institution if it is not already looking at this? What happens to peer review and other privileges?

How Do You Foster a “Zero Tolerance” Environment? Review and revise job descriptions Develop and enforce more rigorous policies and procedures designed to increase accurate POA reporting and to eliminate “never events” Subject staff, including independent practitioners, to more rigorous scrutiny at time of appointment, reappointment, and as part of the ongoing peer review process Be more proactive in disciplinary and corrective action processes

How Do You Foster a “Zero Tolerance” Environment? Avoid cumbersome corrective action processes that are costly, lead to litigation, and result in NPDB reporting issues or staff reductions Review employee handbooks and codes of conduct Follow a “never event” through your health system from start to finish Educate and train Develop and continuously monitor and refine systems and fail-safes

How Do You Foster a “Zero Tolerance” Environment? Structure your “never events” initiatives through “informal” peer review processes that do not give rise to “formal” corrective action except in the most egregious cases Create structures for immediate physician feedback, “education” and “informal intervention” as opposed to formal corrective action Network and look for innovative models that might work for your institution –We are all in this together

Resources CMS fact sheets on hospital-acquired conditions and POA reporting: nalResources.asp CMS Proposal for Additional HACs: et.asp?Counter=3042&intNumPerPage=10&chec kDate=&checkKey=&srchType=1&numDays=350 0&srchOpt=0&srchData=&srchOpt=0&srchData= &keywordType=All&chkNewsType=6&intPage=&s howAll=&pYear=&year=&desc=&cboOrder=date CMS Transmittal #1240 (May 11, 2007): R1240CP.pdf

Thank You