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www.hcca-info.org | 888-580-8373

The High Cost

of Low Quality

Measuring the Economic Impact of Inadequate Quality of Care

Goals of the Presentation

• Pose the Question: Is Quality of Care a concern for Compliance Officers?

• Attempt to Identify the Quality + Compliance + Risk Management Connection

• Discuss measurements of inadequate Quality of Care • Provide information that may influence:

– Administration / Board recognition of inadequate quality

– Physician / staff recognition of quality concerns

– Organizational movement toward a culture of improved quality, improved patient safety, and improved compliance

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www.hcca-info.org | 888-580-8373 3

Can Quality be Federally Mandated?

• Medicare Conditions of Participation (CoP):

– Patient Rights 64 FR 36069, 1999

– Quality Assessment, Performance Improvement 48 FR 3435, 2003

– Authentication of Verbal Orders 42 CFR 482.24(c)(1)

• False Statements Concerning Health Care (18 USC § 1035)

• Schemes to defraud health care programs (18 USC 1347)

• Patient Safety and Quality Improvement Act, 2005 (42 U.S.C. 299c-21)

Can Quality Be State Regulated? Medicaid Compliance Program

• Budget Reconciliation Act of 2005 (effective 1/1/2007) mandates States set up Medicaid Compliance Programs • Mirror of Federal Medicare Compliance Program

managed by HHS OIG since HIPAA 1996

• State False Claims Act mirrors Federal False Claims Act (fines of $5,500 - $11,000 plus double and treble

penalties per false claim filed)

• State gets to keep 10% of all recoveries

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www.hcca-info.org | 888-580-8373 5

Can the OIG Require Quality?

Tenet Healthcare and Physicians CIA 9/27/2006

• First CIA to directly link quality performance to deferred FCA prosecution

• 23 of 66 pages include discussion of quality measures to some degree

• www.tenethealth.com

• www.hhs-oig.com, Fraud Prevention and Detection page

• Quality functions must demonstrate effectiveness, not just existence

Tenet CIA Quality Requirements

• Chief Medical Officer, Clinical Quality Department, clinical quality staff and officers

• Clinical Audits of Physicians, medical care

• Improved Physician Credentialing

• Improved Physician Privileging

• Improved Physician Peer Review

• Evidence Based Medicine Programs

• Standards of Clinical Excellence

• Utilization Management and review

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www.hcca-info.org | 888-580-8373 7

Can the OIG Prosecute Quality?

• Redding Hospital and Physicians, 2005

Lack of medical necessity for cardiac procedures,

1988-2002 • Qui Tam case

Prosecutors noted 13 medical malpractice lawsuits against involved Physicians noted between 1988 and 2002

• Fines, penalties, and incarceration

Can the OIG Prosecute Quality?

• United Memorial Hospital and Physicians, 2003

Inadequate quality of care related to pain management

and anesthesia services

Improper sterile technique; failure of patients to

improve; high volume of procedures; patient

complaints

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www.hcca-info.org | 888-580-8373 9

Public Perception: Quality Red Flags

• JAMA 2005: “...patient safety system progress is slow....and is cause for great concern.”

NIH Public Education Campaign 2007: “120 patient

deaths per day due to medical errors – more than are

due to MVA’s, breast cancer, or AIDS”

• State Regulation: Mandatory serious event reporting in 24 of 50 States

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www.hcca-info.org | 888-580-8373 11

More Quality Concerns

• AMA, 2005:

– Physician shortfalls nationwide by 2020

– 85,000-200,000 fewer Physicians than needed by an aging population

– USA Today front page feature 2/26/2008 • Boomer Boom:

– Beginning 1/1/2007, one Baby Boomer turns 65 every 7 seconds • National Nursing Staff Shortage

• Expanding Role of Mid-Level Providers

USA TODAY: Changing Face of Healthcare 2/26/08

54% Drop in number of General Practice

Physicians, 1990-2006

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What is Quality

• Federal perception

– Quality of care needs attention

– Some Quality issues = negligence and fraud

– Federal and State regulation moving toward mandated quality • Public perception

– Quality of care is poor

– Wait time is intolerable

– Facilities are crowded

– Most patients willing to bring suit if injury + communications failure occurs

• Healthcare Organization perception

– Quality is good

– “Errors occur”

The Economic Impact of Poor Compliance – Easy to Measure

• Office of Inspector General (OIG) Semiannual Report to Congress, 2007

• $43 Billion total savings and recoveries this period

– $39 Billion Implemented Actions

– $1.9 Billion Audit Receivables

– $2.18 Billion Investigative Receivables

– 3308 Individuals / Entities Excluded from Participation

– 447 Criminal Actions

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www.hcca-info.org | 888-580-8373 15

The Economic Impact of Poor Quality – Difficult to Measure

• Juran Institute Study Juran Institute Study -- “Outmoded and Ineffective Procedures”, 2002 – (Two year study, 88 pages) 1 • $390 Billion spent for poor quality care in the U.S. • Overuse, Misuse, Waste = 30% of all Healthcare

Spending, all payer sources

CMS Study: US Government Medicare / Medicaid

spending on Healthcare to = $4.1 Trillion by 2016 2

Juran Math: $1.23 Billion / year of Medicare / Medicaid

spending wasted due to poor quality

1. CHARATAN, F., US REPORT BLAMES POOR QUALITY CONTROL FOR SOARING HEALTHCARE COSTS, BRITISH MEDICAL JOURNAL, VOLUME 324((7352); 1748, JUNE 22, 2002

2. HOFFMAN, E., KLEES, B., CURTIS, C., BRIEF SUMMARIES OF MEDICARE AND MEDICAID, NOVEMBER 1, 2007, PROJECTED

EXPENDITURES, P.4; THE CENTERS FOR MEDICARE AND MEDICAID SERVICES (CMS), OFFICE OF THE ACTUARY;

WWW.CMS.GOV .

Medical Malpractice Claims as a measure of quality

• Ongoing PIAA Claims and Risk Study – 2001-2007

– 60 Physician-owned professional liability Insurers from across the United States

– Insure 60% of private practice Physicians, plus dentists, hospitals, and other practitioners

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PIAA Quality Data, 1985-2005

• 52,877 Medical Malpractice Cases • $3.4 Billion in indemnity payments • Leading Allegations:

– Failure to supervise medical cases

– Medication Errors

– Unnecessary Procedures

– Failure to communicate with / instruct patients

– Medical Records documentation

– Inadequate facilities / equipment

– Unnecessary treatment

– Pharmacy Error

– Managed Care Referral Problems

– Premature Discharge

Chasing the same rabbit

• Quality Improvement, Corporate Compliance, and Risk Management offices are focused on similar concerns in Healthcare organizations.

• OIG / DOJ / HHS investigative efforts are aimed at these same concerns.

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www.hcca-info.org | 888-580-8373 19 Conventional Thinking: Healthcare Risk Silos

FACILITY SAFETY STAFF / RESIDENT SUPERVISION BOARD OF DIRECTORS ERRORS / OMISSIONS EMPLOYEE SAFETY PATIENT SAFETY MEDICAL RECORDS MEDICATION MANAGEMENT MEDICAL PERFORMANCE REGULATORY COMPLIANCE QUALITY IMPROVEMENT

Reality: Overlapping Circles of Risk

QUALITY IMPROVEMENT REGULATORY COMPLIANCE MEDICAL PERFORMANCE MEDICATION BOARD OF DIRECTORS STAFF / RESIDENT SUPERVISION FACILITY SAFETY

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www.hcca-info.org | 888-580-8373 21

Compliance, Quality, Liability, and Patient

Safety:

Four Related Phenomena

1. Regulatory Compliance through the Federal False Claims Act (FCA 1863) and the Health Insurance Portability and Accountability Act (HIPAA 1996) 2. Quality of Care Concerns and Compliance 3. Medical Malpractice Crisis Cycles

4. Patient Safety Movement

The Essential 5: Risk Management

• 1. Medical Decision Making

– Physician treatment, diagnosis, procedure management

– Peer Review Process

– For New Physicians, Proctoring process • 2. Clinical Support Systems

– Infection Control

– Medical Supplies and Medical Equipment

– Medication Management

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www.hcca-info.org | 888-580-8373 23

The Essential 5: Risk Management

• 3. Defensibility of Medical Records

– Physician Documentation

– Nursing or support staff documentation

– Record organization, privacy, and security

– Documentation / patient education and informed consent • 4. Facility Safety

– Slip, trip and fall hazards

– Compliance with OSHA / CFR 29: Bloodborne Pathogens

– Infection control

– Maintenance and physical condition

The Essential 5: Risk Management

• 5. Customer Service and Communications

– Appointment Scheduling

– Patient Registration and data collection

– Communications with patients – all staff members

– Patient – Physician communications

• Patient Education

• Informed Consent

– Diagnostic Test Result Tracking and Communication

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www.hcca-info.org | 888-580-8373 25

The Top 13 Quality, Compliance, and Risk

Management Exposures – All Specialties, 1995-2005 1. Failure to Supervise / Monitor medical cases

16,430 Medical Malpractice Cases $1.2 Billion indemnity payout

2. Medication Errors

9,326 Medical Malpractice Cases $369 Million indemnity payout

3. Unnecessary Procedures

6,702 Medical Malpractice Cases

$382 Million indemnity payout

Top 13 Combined Exposures 1995-2005

4. Medical Records Documentation problems

6,702 Med-mal Cases $382 Million indemnity

5. Premature Discharge

2,625 Med-mal Cases $242 Million indemnity

6. Lack of adequate facilities / equipment

1,985 Med-mal Cases

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Top 13 Combined Exposures 1995-2005

7. Improper Medical Case Management by Physicians

1,943 Med-mal cases $70 Million indemnity

8. Unnecessary Medical Treatment

1,693 Med-mal cases $118 Million indemnity

9. Breach of Confidentiality

918 Med-mal cases

$8 Million indemnity

Top 13 Combined Exposures 1995-2005

10. Failure to Conform with Regulations / Statutes

902 Med-mal cases $68 Million indemnity

11. Pharmacy Error

355 Med-mal cases $18 Million indemnity

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www.hcca-info.org | 888-580-8373 29

Top 13 Combined Exposures 1995-2005

13. Failure to Communicate with or inform patients (Informed Consent and Patient Education)

4,771 Med-mal cases

References

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