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Update on “never events”

By David H. Sohn, JD, MD

Recent legal proceedings relieve fears of “strict liability” with never events

When the Centers for Medicare & Medicaid Services (CMS) initiated its project on “never events,” few imagined that it would lead to increased risk exposure for physicians. This project was meant both to raise awareness of preventable errors that should never happen, such as wrong-site surgery or retention of surgical instruments within a patient, and to save the government money by declaring that expenses associated with treating the never event will not be paid for by Medicare or Medicaid.

The intent was not to expand medical liability, which already costs the nation between $76 billion and $102 billion per year in defensive medicine. However, intended or not, the concern that the strict liability standard for reimbursement of never events will translate to a strict liability standard for medical liability with never events is real.

Because these new CMS guidelines use a strict liability posture to deny payments, the same posture may be used by plaintiff’s attorneys to argue, without any proof of negligence, that the treating physician was at fault per se. This significantly expand physicians’ liability risk. This article reviews the history of never events, discusses how the CMS decision could potentially expand physician risk exposure, and examines recent legal decisions that appear to limit the scope of that risk.

History of “never events”
The history of never events began with a study performed by the National Quality Forum (NQF), a national patient advocacy group. The NQF reported that 87 percent of hospitals did not follow recommendations to prevent hospital-acquired infections, and that Medicare covered (and reimbursed) 57 percent of these infections. This caught the attention of both Congress and President Obama. Congress directed CMS to reduce payments to hospitals to discourage infections, and the president’s Fiscal Year 2009 Budget included the following proposals:

  1. Hospitals would be prohibited from billing Medicare for “serious, preventable adverse events.”
  2. The Medicare program would be prohibited from paying for never events.
  3. Hospitals would be required to report any occurrence of a never event or risk reduced payment updates.

CMS was ordered to identify at least two never events for which Medicare would not pay by October 1, 2008. CMS initially identified eight non-reimbursable hospital acquired conditions, and later expanded the list to include seventeen conditions (Table 1).

Soon after, private companies, including HealthPartners, Cigna, Blue Cross, Aetna, and WellPoint, adopted similar policies. CMS has also issued letters to states, urging that state programs also not pay for never events.

Impact on medical liability
The problem is that never event reimbursement guidelines may be twisted to create a new standard of care and proof of medical liability. In a court of law, different standards of proof exist depending on the tort type. Traditional medical liability falls under a negligence standard, which requires proof of duty, breach of duty, causation and damages.

A much less demanding standard is applied under strict liability. To meet standards under strict liability, the plaintiff simply has to prove that damages occurred. For example, if a tiger escapes from a zoo and injures someone, the zoo faces strict liability for the tiger’s actions. No matter how reasonable the zoo’s prevention measures were, if the tiger hurts someone, the zoo is liable.

The strong language of never events could result in the application of a strict liability standard to what has traditionally been a tort judged under a negligence standard. For example, consider the case of a patient who falls on postoperative day three after a total hip replacement. Under CMS guidelines, falls in a hospital are never events, because CMS believes that they should be preventable with due diligence. The hospital could have performed a fall assessment, had a nurse call button within reach, treated the patient with physical therapy, and made a walker available for the patient. A nurse expert may testify that there was no negligence in this case, and that not all falls are preventable. None of this may matter, however, when a plaintiff’s attorney points out that, according to the federal government, falls should never occur in a hospital.

Recent proceedings
Fortunately, recent legal proceedings have aimed to help prevent this. The best way to avoid an expansion of liability is to apply CMS rulings just where they were intended: on reimbursement issues only. The goal of the CMS never event statements was to save the government money, not to change the standard of care. Plaintiff attorneys should thus be prevented from turning a reimbursement guideline into a standard of care issue.

For example, it is not true that all errors are preventable. According to the Institute of Medicine’s study “To Err is Human: Building a Safer Health System,” medical errors are inherent risks that are not avoidable through censure or punishment. Therefore, plaintiff attorneys should not be able to rebut a defense witness’s statement by introducing evidence from the CMS never events policy. Payment responsibility does not alter the standard of care.

Several case rulings support this interpretation. For example, a North Carolina court recently opined that a “violation of a hospital’s policy is not necessarily a violation of the applicable standard of care, because the hospital’s rules and policies may reflect a standard that is above or below what is generally considered by experts to be the relevant standard.” In a similar way, plaintiff attorneys should be instructed by the court not to confuse the jury and to refrain from arguing strict liability in closing arguments.

The Ohio Supreme Court also had an important tangential ruling. In Lang v. Holly Hill Motel Inc., a man fell and broke his hip while climbing the stairs of a motel. He died shortly after, and his wife brought a claim against the motel. The plaintiffs argued that because the steps of the stairs exceeded height limitations of building regulations, the motel should be strictly liable for any injuries.

The Ohio Supreme Court recognized that doing so would eliminate the traditional plaintiff’s burdens and elevate building code violations to strict liability. The court held that negligence actions are held to the same standard of care and proofs of burden despite the presence of building codes. Similarly, the presence of never event reimbursement guidelines can be extrapolated to not affect the standard of care and proofs of burden in medical liability cases.

Summary
CMS rulings aimed to limit payments for never events may have the unintended effect of expanding medical liability from negligence to strict liability standards. Fortunately, recent legal rulings have correctly limited such potential expansions and kept these rulings as intended, for reimbursement purposes only.

Editor’s Note: Articles labeled Orthopaedic Risk Manager are presented by the Medical Liability Committee under the direction of contributing editor S. Jay Jayasankar, MD.

Articles are provided for general information and are not legal advice; for legal advice, consult a qualified professional.

E-mail your comments to feedback-orm@aaos.org or contact this issue’s contributors directly.

David H. Sohn, MD, JD, is an AAOS Washington Health Policy Fellow and an assistant professor in the department of orthopaedic surgery, division of sports medicine, at the University of Toledo (Ohio) College of Medicine. He can be reached at david_h_sohn@yahoo.com

References:

1. US Dept of Health and Human Services Report 2002

2. MedMined, Inc., 1.6 Million Admission Analysis.” (Sept 2006)

3. Garrison LF and Labban AJ. ‘To Err is Human’—and Costly: Addressing the Potential Effects on Litigation of So-Called ‘Never Events.’ Amer Health Lawyers Assoc Health Lawyers Weekly, December 19, 2008, Vol VI, Issue 48

4. Section 1886(d)(4)(D) of the Social Security Act

5. Brown CD, Mitchell KN, Scott KP. Litigation Impact of Never Events. Health Lawyer News, February 2008

6. Kohn LT, Corrigan JM, Donaldson MS, (ed): To err is human: Building a safer health system. Committee on Quality of Health Care in America. Institute of Medicine, National Academy Press, Washington, D.C. Access online at http://www.nap.edu/openbook.php?isbn=0309068371

7. O’Mara v. Wake Forest Univ. Health Sciences, 646 S.E.2d 400, 406 (N.C. App. 2007)

8. Lang v. Holly Hill Motel, Inc., Slip Opinion No. 2009-Ohio-2495, citing Chambers v. St. Mary’s Sch. (1998), 82 Ohio St. 3d 563

9. Sprade BS, Luttecke FE. The Ohio Supreme Court Assuages Fears that ‘Never Events’ Could Constitute Negligence Per Se. Healthcare Liability and Litigation

AAOS Now
July 2011 Issue
http://www.aaos.org/news/aaosnow/jul11/managing6.asp