Chapter 10: Strategies to Reduce Liability

Managing Physicians

• Facilities may have liability when a physician is involved in malpractice– Respondeat superior– Ostensible agency– Corporate negligence

Professional Practice Acts

• Regulatory boards – Created by State legislation– Statute defines the scope of professional

practice and specifies:• Composition of the board• Duties and powers to create rules for the

professional practice• Licensure process• Continuing education requirements• Investigation and disciplinary actions

Professional Discipline

• Regulatory Board will:– Investigate suspected misconduct– Prosecute confirmed misconduct, as

appropriate– Take appropriate disciplinary action for

confirmed misconduct• License revocation• License suspension• Fines• Referrals for professional assistance

Examples of Misconduct

• Repeated acts of negligence

• Incompetence

• Aiding or abetting the unlicensed practice of medicine

• Failure to comply with government rules/regulations

• Exploitation of the patient for financial gain

• Evidence of moral unfitness to practice medicine

Examples of Misconduct

• Failure to maintain appropriate medical records

• Abandoning or neglecting a patient

• Harassing, abusing, or intimidating a patients

• Ordering excessive tests or treatments

• Unlawful use of controlled substances

Physical impairment of professionals

• Health problems, disease, disability, psychiatric issues, and alcohol/chemical abuse

• Symptoms of impairment– Making rounds late --complaints from staff– Inappropriate orders -- frequent accidents– Hostile behavior -- mood swings– Personal hygiene -- job changes– Neglected social commitments

Sexual Harassment

• Providers are in the unique position of power– Patient is dependent on the provider

Identifying Previous Misconduct

• Licensing boards share information concerning adverse actions against providers across state lines – The Federation of State Medical Boards– National Practitioner Data Bank

• Risk Managers should ensure that the facility hiring and credentialing policies include a procedure for checking the data banks

National Practitioner Data Bank

• Designed to collect comprehensive data on adverse actions taken against health care practitioners, malpractice payments made and Medicare/Medicaid exclusions.

• Insurance companies and hospitals are required to report to DHHS and state licensing boards any medical malpractice payments resulting from court judgments or settlements

• Facilities are required to check the NPDB for all new medical staff and every two years for re-credentialing

• 4 classes of adverse actions requiring reporting– Those taken against a practitioner’s license by a

state medical board– Those taken against a practitioner’s clinical

privileges at a health care facility– Those taken against membership by a

professional society– Those taken by Medicare/Medicaid and the DEA

National Practitioner Data Bank

Clinical Practice Guidelines• Systematically developed statements to assist

practitioners and patient decisions about appropriate health care for specific clinical circumstances. – Private Initiatives– Government Initiatives– Worker’s Compensation– Medical Liability Insurers

• Risk managers must not only be aware of clinical practice guidelines, but also the legal implications of ignoring them

• Health professionals reviewing other like health professionals to assess:– Quality concerns– Hospital privileging decisions– Group practice membership decisions– Staff conduct– Professional isolation– Education

Peer Review

Liability Alternatives

• Limit number of lawsuits

• Control size of awards

• Limit access of plaintiffs to the system

Removal of Malpractice Litigation from Judicial System

• Several tort reform proposals recommend shifting malpractice litigation away from the judicial system – Administrative Agencies– Alternative Dispute Resolution

No-Fault Proposals

• Under this type of system, adverse outcomes would be automatically compensated without lawsuits regardless of whether the outcomes resulted from negligence.– Accelerated Compensation Events– Enterprise liability– Other methods

Summary

• Risk Managers must work with the healthcare professionals in terms of practice guidelines and peer review.

• Proactive liability reduction can offer significant protection of the organization’s financial resources.