Litigating the “Never Event” Case Angela M. Agustin Fox Hall, Render, Killian, Heath & Lyman, P.C. One American Square, Suite 2000 Box 82064 Indianapolis, IN 46282 (317) 977-1464 [email protected] Angela M. Agustin Fox is an associate attorney at Hall, Render, Killian, Heath and Lyman, P.C. in Indianapolis, Indiana. Her practice includes defense of medical, nursing, and long-term care providers and professionals in civil litigation, and works closely with health care providers, primarily long-term care facilities, on matters involving litigation, risk management, insurance captives, disputes and regulatory and licensure issues. Ms. Fox is licensed to practice law in Indiana and Kansas. She has tried long-term care and medical malpractice cases in Indiana, in addition to her prior experience of trying several misdemeanor and felony criminal trials to juries and judges in Indiana. Ms. Fox is a 2005 graduate of the University of Kansas School of Law. Litigating the “Never Event” Case Table of Contents I.Introduction..................................................................................................................................................29 II.Background...................................................................................................................................................29 III. Provider Preventable Conditions.................................................................................................................33 IV. Applicability of “Never Events” in a Nursing Home Context.....................................................................34 V. Never Events in Litigation............................................................................................................................35 A. The standard of care issue.....................................................................................................................35 B. Admissibility of CMS’ rules regarding never events, HACs, and HCACs, NQF’s serious reportable events, or any reporting or studies of medical errors..........................................36 C. Keys to successful defense of never event cases..................................................................................37 VI.Conclusion.....................................................................................................................................................38 Litigating the “Never Event” Case ■ Fox ■ 27 Litigating the “Never Event” Case I.Introduction The initial goal of The Centers for Medicare and Medicaid Services’ (CMS) “never event” policy was not denial of reimbursement. Instead, its goal was to improve patient safety and quality of care by providing a financial incentive to hospitals to become more conscious of their quality of care and improve patient care. However, the policy has now become a way for CMS to save money by penalizing hospitals for conditions acquired after admission, which CMS believes should not have occurred. Further, in the litigation context, Plaintiffs’ attorneys are attempting to use these billing and reimbursement rules as a way to mislead the jury and effectively expand the applicable standard of care. This presentation will examine the background of never events, the expansion of never events due to the passage of the Patient Protection and Affordable Care Act, never events in the long term care setting, and strategies for litigating a never event case. II.Background Since the publication of the Institute of Medicine’s (IOM) 1999 report To Err is Human: Building a Safer Health System, the issue of medical errors in hospitals has been at the forefront of patient safety discussions. In its initial report, the IOM stated that hospital-acquired conditions caused by medical errors were a leading cause of morbidity and mortality in the United States. The IOM estimated that preventable medical errors were responsible for the deaths of up to 98,000 patients in the United States each year. The costs associated with medical errors due to additional healthcare costs, lost productivity, and disability were estimated between $17 and $29 billion. The IOM’s report prompted a flurry of responses and reporting initiatives. Five states—Massachusetts, California, New Jersey, Arizona, and Maine—introduced bills regarding medical error reporting laws for hospitals. The Joint Commission, which accredits and certifies more than 19,000 health care organizations and programs in the United States, also developed and instituted reporting requirements for its hospitals, as well as developing a Sentinel Event Policy. The federal government also responded to the perceived need for additional reporting of medical errors by providers by enacting the Patient Safety Quality Improvement Act of 2005 (PSQIA). However, PSQIA’s reporting of medical errors was totally voluntary. Finally, the most significant response was the 2002 response from the National Quality Forum (NQF), entitled Serious Reportable Events in Healthcare, identifying “27 adverse events that are serious, largely preventable, and of concern to both the public and the healthcare providers.” NQF published the list to encourage state reporting efforts of serious reportable events. This list has been periodically updated, most recently in 2011, and now lists 29 serious reportable events--or “never events”--in healthcare, in various settings: hospital, outpatient or office-based surgery centers, skilled nursing facilities, and office-based practices. However, the reporting initiatives proved inadequate to reduce or eliminate medical errors. The next step was an effort to create a link between reimbursement and quality of care. In 2001, the IOM followed up its initial report with a second report entitled Crossing the Quality Chasm, which recognized the need to align reimbursement and payment of hospitals with quality improvement initiatives. In response to various reporting initiatives and studies, Congress authorized CMS to adjust Medicare payments to hospitals to encourage the prevention of hospital-acquired conditions. On February 8, 2006, President George W. Bush signed the Deficit Reduction Act of 2005, Section 501(c) of Pub. L. 109-171, which amended Medicare hospital payment provisions at section 1886(d)(4)(D) of the Social Security Act and required the Secretary of Health and Human Services to select at least two HACs that are (1) high cost, high Litigating the “Never Event” Case ■ Fox ■ 29 volume, or both; (2) identified through ICD-9-CM coding as a complicating condition or major complicating condition that, when present as a secondary diagnosis at discharge, results in payments at a higher Medicare Severity-Diagnosis Related Group (MS-DRG); and (3) reasonably preventable through application of evidence-based guidelines. In sum, the Department of Health and Human Services was to create its own list of “never events” which, if occurred, could result in a decrease of Medicare payments. Beginning October 1, 2007, CMS required hospitals to begin reporting on claims for discharges, and specifically note whether the selected conditions were present on admission. If the conditions were acquired in the hospital, the higher Medicare payment would be denied. Under the final version of the law, the Secretary of Health and Human Services published a list of hospital-acquired conditions for which Medicare payment would no longer be made as of October 1, 2008. The initially identified HACs were: — pressure ulcers; — certain types of falls and trauma; — surgical site infection-mediastinitis (infection in the chest) after coronary artery bypass graft surgery; — foreign object unintentionally retained after surgery; — vascular catheter associated infection; — catheter associated urinary tract infection; — administration of incompatible blood; and — air embolism. After several expansions and clarifications of the original list of HACs took place, the decision was made that an updated list of HACs would be proposed every fiscal year. The list of HACs for fiscal year 2013 is as follows: HAC CC/MCC (ICD-9-CM Codes) Foreign Object Retained After Surgery 998.4 (CC) 998.7 (CC) Air Embolism Blood Incompatibility 999.1 (MCC) 999.60 (CC) 999.61(CC) 999.62 (CC) 999.63 (CC) 999.69 (CC) Pressure Ulcer Stages III & IV 707.23 (MCC) 707.24 (MCC) 30 ■ Medical Liability and Health Care Law ■ March 2013 Codes within these ranges on the Falls and Trauma: CC/MCC list: - Fracture - Dislocation 800-829 - Intracranial Injury 830-839 - Crushing Injury 850-854 - Burn 925-929 - Other Injuries 940-949 Catheter-Associated Urinary Tract Infection (UTI) 991-994 996.64 (CC) Also excludes the following from acting as a CC/MCC: 112.2 (CC) 590.10 (CC) 590.11 (MCC) 590.2 (MCC) 590.3 (CC) 590.80 (CC) 590.81 (CC) 595.0 (CC) 597.0 (CC) 599.0 (CC) Vascular Catheter-Associated Infection 999.31 (CC) 999.32 (CC) 999.33 (CC) Litigating the “Never Event” Case ■ Fox ■ 31 FY 2013 Final HAC List HAC CC/MCC (ICD-9-CM Codes) Manifestations of Poor Glycemic Control Surgical Site Infection, Mediastinitis, Following Coronary Artery Bypass Graft (CABG) 250.10-250.13 (MCC) 250.20-250.23 (MCC) 251.0 (CC) 249.10-249.11 (MCC) 249.20-249.21 (MCC) 519.2 (MCC) And one of the following procedure codes: 36.10–36.19 Surgical Site Infection Following Certain Orthopedic Procedures Surgical Site Infection Following Bariatric Surgery for Obesity 996.67 (CC) 998.59 (CC) And one of the following procedure codes: 81.01-81.08, 81.23, 81.24, 81.31-81.38, 81.83, 81.85 Principal Diagnosis – 278.01 539.01 (CC) 539.81 (CC) Surgical Site Infection Following Cardiac Implantable Electronic Device (CIED) 998.59 (CC) And one of the following procedure codes: 44.38, 44.39, or 44.95 996.61 (CC) 998.59 (CC) And one of the following procedure codes: 00.50,00.51,00.52,00.53,00.54, 37.80,37.81,37.82, 37.83,37.85, 37.86, 37.87, 37.94, 37.96,37.98, 37.74, 37.75, 37.76, 37.77, 37.79, 37.89 32 ■ Medical Liability and Health Care Law ■ March 2013 Deep Vein Thrombosis and Pulmonary Embolism 415.11 (MCC) Following Certain Orthopedic Procedures 415.13 (MCC) 415.19 (MCC) 453.40-453.42 (CC) And one of the following procedure codes: 00.85-00.87, 81.51-81.52, or 81.54 FY 2013 Final HAC List HAC Iatrogenic Pneumothorax with Venous Catheterization CC/MCC (ICD-9-CM Codes) 512.1 (CC) And the following procedure code 38.93 III. Provider Preventable Conditions Section 2702 of the Patient Protection and Affordable Care Act of 2010 requires the Secretary of Health and Human Services to issue Medicaid regulations (effective July 1, 2011) which prohibit federal payments to states under section 1903 of the Social Security Act for any amounts expended for providing medical assistance for health care-acquired conditions (HCACs). Specifically, the Statute directs the Secretary of Health and Human Services to: (1) identify the current state practices that prohibit payment for HCAC and incorporate those practices, as appropriate, into Medicaid policy regulations; (2) ensure that the Medicaid HCAC regulations do not impact beneficiary access to care; (3) define the term “health care-acquired condition” in accordance with Medicare’s inpatient hospital statutory language at 1886(d)(4)(D)(iv); and (4) apply Medicare’s provisions regarding the identifiable hospital acquired condition (HAC) and never events to Medicaid regulations, excluding any condition identified for non-payment under Medicare that may not be applicable to Medicaid. On June 30, 2011, CMS published a final rule implementing the requirements of Section 2702. The final rule requires that states implement non-payment policies for provider preventable conditions (PPCs), including HCACs and other provider-preventable conditions (OPPCs). The minimum set of conditions that states must identify for non-payment are: Category 1—Health Care-Acquired Conditions (for any inpatient hospital settings in Medicaid) — Foreign Object Retained After Surgery — Air Embolism — Blood Incompatibility — Stage III and IV Pressure Ulcers — Falls and Trauma, including fracture, dislocations, intracranial injuries, crushing injuries, burns, electric shock — catheter-associated urinary tract infection Litigating the “Never Event” Case ■ Fox ■ 33 — vascular cather-associated infection — manifestations of poor glycemic control (diabetic ketoacidosis, nonketotic hyperosmolar coma, hypoglycemic coma, secondary diabetes with ketoacidosis, secondary diabetes with hyperosmolarity) — surgical site infection following corognary artery bypass graft-mediastinitis, bariatric surgery, orthopedic procedures — deep vein thrombosis/pulmonary embolism following total knee replacement or hip replacement with pediatric and obstetric exceptions Category 2—Other Provider Preventable Conditions (for any health care setting) — wrong surgical or other invasive procedure performed on a patient — surgical or other invasive procedure performed on the wrong body part — surgical or other invasive procedure performed on the wrong patient — OPPCs identified in the state’s plan and according to the requirements of the final regulation The expansion of Medicare’s “never events” into Medicaid certainly continues the trend of patient safety and the reluctance to expend government funds on treatment that is reasonably preventable through proper care. This expansion through the Patient Protection and Affordable Care Act impacts more potential plaintiffs since Americans on Medicaid topped 50 million in June 2010; 48 million were served by Medicare in 2011. IV. Applicability of “Never Events” in a Nursing Home Context While Medicare’s “never events” are largely focused on hospitals—hence the term “hospital acquired conditions”—nothing precludes Medicare or Medicaid from denying payments to skilled nursing facilities based on a never event. However, instead of denying payment on the front end, CMS will typically request reimbursement after an investigation. Often, this investigation will involve the State’s Medicaid Fraud Control Unit, which is the criminal law enforcement unit of the Attorney General’s Office. The MFCU is tasked with investigating and prosecuting Medicaid providers who commit fraud and/or resident abuse, neglect and exploitation in long-term care facilities. These allegations of fraud and/or resident abuse, neglect, and exploitation often involve one of NQF’s serious reportable events, or may involve a HAC or HCAC under CMS. If allegations are substantiated, MFCU often pursues civil monetary repayment of all or a portion of any Medicaid program funds under the theory that the Medicaid provider did not provide adequate services to recipients. Another way that CMS monitors never events or serious reportable events in the long term care setting is through the survey process. Medicare and Medicaid-certified skilled nursing facilities are required to undergo annual surveys in order to determine if the facilities are complying with Federal Requirements. The survey process was initially developed to improve quality of care; however, similar to the serious adverse events or never events, a reimbursement or penalty scheme also grew out of the desire to improve resident safety and care. If a facility receives a tag involving quality of care, then the facility may be assessed a monetary penalty based on the severity of the tag. The monetary penalty, can also be retroactive to the date of the alleged noncompliance and may stay in effect until the facility is found to be in compliance with the federal regulations. In addition, facilities may be penalized by being prevented from admitting Medicaid or Medicare patients for a period of time. Fines and denial of admissions are analogous to CMS’ treatment of never events in the hospital setting in that the regulatory agency is attempting to tie quality of care issues to reimbursement to allegedly ensure patient safety and a certain quality standard for healthcare. 34 ■ Medical Liability and Health Care Law ■ March 2013 V. Never Events in Litigation Not only do CMS’ never events, including Medicare’s HACs and Medicaid’s HCACs effect reimbursement to hospitals, but they also provide additional challenges to the hospitals defending patient care issues in the civil arena. Never events are serious, dangerous matters, and can complicate litigation. A 2008 Hospital Professional Liability and Physician Liability Benchmark Analysis released by risk management services provider Aon Corp. and the American Society for Healthcare Risk Management noted that four categories of HACs--hospital-acquired infections, hospital-acquired injuries, unintentional retention of foreign objects during surgery, and pressure ulcers--comprise 12.2 percent of total annual medical professional liability costs. The aforementioned study also noted that claims associated with these four categories of conditions account for one out of every six claims filed in the United States. While Plaintiffs’ counsel may present these never events as evidence of below the standard of care, it is important to remember that never events are billing and reimbursement rules, and do not define the standard of care. A. The standard of care issue Never events do not and cannot define the standard of care provided to patients or residents. The concern that such a claim would be made was evident from the initial introduction of the “never events” policy. Initial discussion among providers and insurers highlighted the concern that the use of the term “never events” and the heightened public awareness surrounding the highlighted HACs would create a strict liability standard for hospitals. Plaintiffs’ attorneys often argue that the HACs create a new standard of care, as defined by CMS. This would, therefore, hold hospitals strictly liable if the patient could show that he or she suffered a never event. The hospital would automatically be held responsible for the harm, even if the care provided met the applicable standard of care. However, this was not the intent of the implementation of HACs, HCACs, or never events. CMS cannot augment the standard of care to hold providers absolutely liable if a never event or HAC occurs. If such an allegation is made, defense counsel must immediately challenge this allegation. CMS’ never events are simply reimbursement rules that have no impact on the standard of care for healthcare providers. CMS’ pronouncement of never events simply defines certain types of care for which CMS will or will not reimburse providers. Defense counsel should educate opposing counsel and the court that the standard of care is defined by the standard of practice of others in the profession, or what a reasonable provider would do in the same or similar circumstances. By implementing never events, CMS has not created a new standard of care. Plaintiffs’ attorneys may also argue that the occurrence of a never event is negligence per se. Negligence per se is the doctrine whereby an act is considered negligence because it violates a certain statute or regulation, usually a public safety statute. The exact definition of negligence per se varies by state. In Indiana, an unexcused or unjustified violation of a duty dictated by statute is considered negligence per se. Before determining that the violation of a statute constitutes negligence, however, the court must scrutinize the statute and consider the purpose of the enactment, the persons whom it was intended to protect and the injuries that it was intended to prevent. Plaintiffs may argue that when a never event occurs, the provider has violated its duty as dictated by CMS’ federal rules. However, defense counsel needs to note that the purpose for the federal rules regarding never events is not to create a standard of care but to address billing and reimbursement. The pronouncement of never events was never intended to extend the applicable standard of care for providers, but to set reimbursement guidelines to improve quality of care. The law in Indiana would suggest that the CMS rules do not fall within a negligence per se analysis. Another popular argument among Plaintiffs’ attorneys, especially in cases involving unintentional retention of an object during surgery, is that the occurrence of a never event or HAC is res ipsa loquitur, or “the thing speaks for itself.” In most jurisdictions, medical malpractice cases involve expert testimony regardLitigating the “Never Event” Case ■ Fox ■ 35 ing the applicable standard of care and whether the breach of that standard caused the damages complained of by the Plaintiff. Medical negligence is not generally a conclusion that may be reached by a jury without such an expert opinion among the evidence presented. However, the rules of res ipsa loquitur may satisfy this requirement, especially in cases involving sponges or other instruments left inside a patient after surgery. The fact that unintentional retention of an object after surgery occurred is enough to satisfy the breach component of negligence in Indiana. Res ipsa loquitur eliminates the need for plaintiffs to produce an expert witness to testify regarding breach and causation, because the act is so obviously negligent that a layperson can recognize it. However, never events are rarely, if ever, analyzed under res ipsa loquitur. Again, CMS cannot and did not augment any legal doctrines or standards of care. Defense counsel must be prepared to educate the court and the jury that HACs and never events are medically complex and may be caused by a variety of factors which are not proximately related to any alleged negligence. If res ipsa loquitur is a valid argument in your jurisdiction, then the provider’s conduct, causation, and damages become especially important to defeat the allegation of negligence. B. Admissibility of CMS’ rules regarding never events, HACs, and HCACs, NQF’s serious reportable events, or any reporting or studies of medical errors Again, defense counsel should argue first and foremost that any discussion regarding never events, hospital acquired conditions, health care acquired conditions, or serious reportable events are terms associated with billing and reimbursement rules, and are not relevant to defining the applicable standard of care. These rules, studies, and terminology do not seek to define the standard of care for a particular community, nor do they define a national standard of care. Further, they do not assist the trier of fact in making a determination as to duty, breach, causation, or damages. The term “never event”—and arguably, “serious reportable event”—is certainly prejudicial to the defendant healthcare provider, and should be deemed inadmissible pursuant to the Federal Rule of Evidence 403 balancing test. The term “never event” was coined in 2001 by Ken Kizer, MD, former CEO of the National Quality Forum, in reference to medical errors that should “never occur.” It is not a term grounded in medicine or the law, and was thrust upon CMS in an effort to tie reimbursement and billing to medical errors. More importantly, CMS does not use the term “never event”; CMS refers to unreimbursable events as HACs, or hospital acquired conditions. Under the PPACA, Medicaid refers to these events as HCACs, or health care acquired conditions. The term does not exist in federal statute, rules or regulations, and should not be used in court due to its propensity to mislead the jury. Plaintiffs’ attorneys must enter evidence of a plaintiff ’s damages at trial, specifically medical specials or bills. Defense counsel must be on guard for an attempt to also introduce evidence that CMS refused to reimburse the provider for the plaintiff ’s treatment because CMS decided that the treatment was for a HAC. Counsel will undoubtedly argue that CMS’ decision to not reimburse for the treatment was because the care was substandard or negligent and resulted in a HAC. Several objections must be made to the aforementioned conduct. First, although the bills may be relevant from a damages perspective, reimbursement from CMS is not relevant to a determination of liability. In many jurisdictions where the collateral source rule applies, it is also irrelevant and inadmissible to allow information regarding how a collateral source such as CMS handled payment of a patient’s medical bills. However, in some jurisdictions, including Indiana, evidence of discounted medical bills is admissible in order for a jury to determine the reasonable cost of medical expenses. If there is a dispute regarding the reasonable cost, then the opposing party is permitted to introduce contradictory evidence, including discounted medical bills. The adjustments or accepted charges for medical services will assist 36 ■ Medical Liability and Health Care Law ■ March 2013 the finder of fact in establishing reasonableness (i.e. the discounted bills are reasonable since that was what CMS paid). Although evidence of discounted medical bills is helpful to the Defendant from a damages perspective, it may be harmful if the Plaintiff wants to rebut the discounted medical bills with evidence that CMS did not reimburse the provider because of a hospital acquired condition. It is likely that a discourse involving CMS’ reimbursement policies would still be inadmissible in states that allow discounted medical bills because these jurisdictions still do not allow a discussion regarding the identity of the payor source. Because CMS cannot be revealed as the payor, Plaintiffs’ attorneys would not be allowed to present evidence surrounding the reasons behind certain reimbursement decisions. C. Keys to successful defense of never event cases Successful defense of never event cases begins with a thorough review of the Plaintiff ’s complaint. If the Plaintiff alleges negligence per se based on CMS’ never events or HACs, or Medicaid’s HCACs, defense counsel should move to dismiss the whole Complaint or, at a minimum, move to strike any allegations based on CMS’ reimbursement rules. Next, careful attention must be paid to Plaintiff ’s discovery requests. Defense counsel should be wary of any requests by Plaintiff to conduct discovery about Plaintiff ’s billing, especially regarding CMS’ decisions regarding reimbursement. Proper objections should be made to these inquiries, noting that such requests are irrelevant and not reasonably calculated to lead to the discovery of admissible evidence. Defense counsel should also draft appropriate interrogatories to Plaintiff, requesting the exact nature and extent of all damages or injuries to any alleged incidents, names and address of health care providers seen before, during, or after the date of the alleged incident, and to specify any treatment or care that should have been given that was not given to the Plaintiff. Emphasis should be placed on the complexity of any medical issue, and that a person’s medical history may have also played a role in the ultimate outcome. Discovery of the patient’s true underlying medical condition may assist in a better resolution for your client. Careful examination of the standard of care and a solid explanation as to causation are also key to the successful defense of never event cases. Upon admission to a hospital or skilled nursing facility, several assessments are performed. It is important to look at the risk factors of the individual patient at admission. Risk factors for falls, pressure sores, and infection are just some examples of admission assessment done by providers. For example, careful attention must be paid to a person’s history of pressure sores, especially recent pressure sores. Also, a thorough risk assessment must be done to evaluate the patient or resident’s risk for developing pressure sores. Some risk factors for pressure sores include mobility/immobility, incontinence, nutrition, psychotropic drug use, friction, age, and restraints. Turning and repositioning schedules must be implemented by the provider to help minimize the risk of development of pressure sores. Fall risk assessment may also be performed regarding the patient. Hospitals and skilled nursing facilities often assess patients for risk of falls to institute preventive measures. Careful examination of the patient’s chart will alert defense counsel to the patient’s risk of certain conditions. Counsel will be able to argue that even though these conditions were hospital-acquired, the patient presented with high risk for the occurrence of these conditions, and that even with good care, could not have been prevented. A skilled expert can examine the care given while at the hospital, and opine that the standard of care was met. This is particularly helpful regarding stage III and IV pressure sores. Physicians with expertise in wound care can opine and educate the jury regarding pressure ulcer identification, initial assessment, education and development of the treatment plan, nutritional assessment and support, management of tissue loads, ulcer care, assessment of ulcer healing, monitoring, and reassessment of treatment plan and evaluation of adherence. Litigating the “Never Event” Case ■ Fox ■ 37 In cases involving surgical retention, if Plaintiff proves the elements of res ipsa loquitur, then the burden shifts to the Defendant to disprove at least one of the elements. For example, hospitals can argue that a non-employee physician had control over a particular instrument, and not the hospital. Res ipsa loquitur would not apply to the hospital. Often, the burden shifts to the defendant to explain how the provider met the standard of care, which will also be dependent on strong expert testimony. In some jurisdictions, including Indiana, evidence that the physician relied on nurses to count sponges, and testimony that this complied with the standard of care is admissible and can be considered in the overall determination of whether a defendant provider fell below the applicable standard of care. See Chi Yun Ho, M.D. v. Frye, 880 N.E.2d 1192, 1201 (Ind.2008). Careful explanation plus an examination of the care given to the patient while at the hospital or skilled nursing facility will aide in defending these cases successfully. VI.Conclusion The term “never event” is simply a term meant to stir up images of substandard care. It is a term that is not used by the NQF, Medicare, or Medicaid. It was originally a term used to increase awareness of medical errors and increase patient safety and quality of care but has evolved into a buzz word for Plaintiffs. Meant to inflame juries, the term is highly prejudicial and unhelpful to the trier of fact. Knowing the true etiology of the term allows defense attorneys to successfully defeat claims involving never events, and allows both parties to focus on the patient and the care that was given. 38 ■ Medical Liability and Health Care Law ■ March 2013
© Copyright 2026 Paperzz