Risk Management Implications of “Never Events”

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

2. Risk Management Implications of “Never Events” Paula G. Sanders, Esquire Post & Schell, PC 17 North 2nd Street, 12th Floor Harrisburg, PA 17101 717-612-6027 PSanders@postschell.com

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

4. 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))

5. HistoricalOverview • 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

6. HistoricalOverview • 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

7. 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

8. 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

9. 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

10. 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)

11. 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

12. 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 201-2 • 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)

13. 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

14. 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)

15. 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

16. CriticalElements • 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?

17. ChangingPractices • 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

18. 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.”

19. 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?

20. 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

21. 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?

22. 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?

23. 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

24. 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)

25. Overcome the Confusion

26. 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?

27. 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?

28. 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?

29. 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

30. 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

31. 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

32. Resources • CMS fact sheets on hospital-acquired conditions and POA reporting: www.cms.hhs.gov/HospitalAcqCond/07_EducationalResources.asp • CMS Proposal for Additional HACs: http://www.cms.hhs.gov/apps/media/press/factsheet.asp?Counter=3042&intNumPerPage=10&checkDate=&checkKey=&srchType=1&numDays=3500&srchOpt=0&srchData=&srchOpt=0&srchData=&keywordType=All&chkNewsType=6&intPage=&showAll=&pYear=&year=&desc=&cboOrder=date • CMS Transmittal #1240 (May 11, 2007): http://www.cms.hhs.gov/Transmittals/downloads/R1240CP.pdf

33. Thank You