Disclosure and early reimbursement can deter medical liability lawsuits
On April 15, 2010, the New England Journal of Medicine published “Malpractice Reform: Opportunities for Leadership by Health Care Institutions and Liability Insurers.” The article referenced “disclosure and reimbursement programs” and “disclosure and early offer programs.” COPIC Insurance Company’s 3Rs Program is perhaps the best known active disclosure and reimbursement program.
COPIC was founded by members of the Colorado Medical Society in the early 1980s, during an escalating malpractice crisis. In the late 1990s, K. Mason Howard, MD, COPIC’s first chairman, proposed a program of supplemental benefits for patients who had an unanticipated outcome. Called the “3Rs Program”—for Recognize, Respond, and Resolve—the program launched in October 2000.
Fortunately, groundwork that had been laid years previously for other purposes facilitated the success of the program in Colorado. Critical to any early intervention is early reporting; physicians had to report unanticipated outcomes in a very timely way. COPIC had, from its inception, stressed the importance of early incident reporting as integral to its “reporting form” variant of claims-made insurance. Reporting form coverage means that coverage attaches only when that event is reported to COPIC.
Also, physicians had a high level of trust with the company. Strong relationships existed with the state’s licensing board, insurance department, and legislature. An “I’m Sorry Statute” with broad definitions of protected conversations passed the Colorado legislature with a near unanimous vote in 2003.
Several assumptions and criteria drive the 3Rs program, including the following:
- Participation by insured physicians is entirely voluntary.
- Patients are never asked to sign a written waiver of their right to seek an attorney, make a formal demand, or initiate formal litigation, but if they choose that route, 3Rs benefits cease.
- The program is administered by COPIC’s risk management department and is not to be confused with insurance claims; the payments are considered a “first-party supplemental benefit” and not a third-party insurance payment.
- The program is based on an adverse outcome arising from the course of medical care without a determination of negligence. The physicians involved in the care determine primarily which cases to report. COPIC’s experience, coupled with the physician’s firsthand knowledge of the event, determine whether the case is appropriate for the program.
- Payments are made for “out-of-pocket” medical expenses not covered by insurance (maximum $25,000) and “loss of time” at a per diem of $100 (maximum $5,000), for a total of $30,000 available to the patient.
- Cases involving the death of a patient are not eligible for the program.
- Patients who file complaints with the Colorado Board of Medical Examiners are excluded from participation.
Because payments are not made in response to formal written demands and no patient is asked for a waiver or release, the payments are not reportable to the National Practitioner Data Bank.
The impact of communication
Program experience and analysis reveal the significance of effective physician communication and the role this plays in the patient’s perception of events and ability to accept the circumstances of the outcome. A qualitative study from the University of Colorado Health Sciences Center validated this view.
A series of interviews were facilitated with these patients, and in some cases family members, aimed at identifying patient needs and perceptions following an unanticipated medical outcome. Participants shared the experience of physical, emotional, and financial worries, trauma, and frustrations related to their outcomes.
When the communication with the physician was good, open, and honest, the outcome was viewed as an honest mistake. Patients referred to their outcomes under these circumstances as both forgivable and understandable. Conversely, when the communication was perceived as poor or nonexistent, the same outcome was viewed as an error or negligence.
As a result, training in disclosure is of significant importance to the program.
Easing financial and emotional burdens
The significance of patients’ financial burden following unexpected outcomes also became evident during these interviews. Overwhelmingly, patients commented on the devastating impact of the financial burden and how this carried over into what they were undergoing physically and emotionally.
Addressing the financial aspect proactively to minimize the burden associated with the unexpected costs related to the injury is an important part of the program. Successful program administration facilitates the necessary communication and supports the insured physician and the patient throughout this process.
Following an unexpected outcome, patients go through a process similar to the grieving process: denial, anger, bargaining, depression, and acceptance. All too often, these patients get “stuck” in anger; an entire industry of personal injury law has been spawned in response to that anger. Yet, even when patients receive monies from the tort system, the anger persists and the arrested grief process leaves the patient less than whole.
Under the 3Rs program, the physician is encouraged to remain involved as the patient progresses to complete recovery, even if the doctor is no longer providing direct care. This ongoing involvement is essential in facilitating the patient through this process and crucial to effecting a positive resolution.
Statistical analysis of the 3Rs program from inception (October 2000) through December 31, 2009, reveals the following information:
- Overall, about 60 percent of the total insured base participates.
- About 80 percent of procedural specialists participate, compared to 41 percent of nonproceduralists, in part because procedural adverse outcomes are more amenable to the 3Rs approach than are the delayed diagnosis or failure to diagnose claims common to primary care and emergency medicine specialties.
- A total of 1,829 patients have received reimbursement, with an average payment of $4,977 per paid case.
- Of these patients, 60 (3.4 percent) subsequently filed a claim or suit with COPIC.
- These claims or suits have resulted in indemnity payments via the tort system in 11 cases (0.6 percent).
Specific to orthopaedic surgery, the following are the five most common complications that have been reported and successfully worked through the 3Rs program:
- Postprocedure surgical infections
- Failed procedure necessitating further intervention
- Nerve injury, temporary and/or permanent
- Hardware complication
- Delayed fracture recognition resulting in additional procedures
COPIC, in a unique environment, launched an early intervention program in 2000 built around disclosure, transparency, acknowledgment of patient needs, and provision of benefits following an unanticipated medical outcome. This program has been successful in most cases.
The growing body of literature exploring alternatives to tort frequently cites the 3Rs program experience. The 3Rs program has proven to be an effective approach to addressing these events when compared to the traditional tort system (Table 1).
Alan Lembitz, MD, is vice president, patient safety and risk management, for COPIC. He can be reached at (800) 421-1834, ext. 6133, or firstname.lastname@example.org
Additional References—ORM 3Rs program
- Mello MM, Gallagher TH: Malpractice reform: Opportunities for leadership by health care institutions and liability insurers. New Engl J Med 2010;362:1353-1356.
- Strunk AL, Queenan JT: Beyond negligence: Administrative compensation for adverse medical outcomes. Obstet Gynecol 2010;115;896-903.
- Duclos CW, Eichler M, Taylor L, et al: Patient perspectives of patient-provider communication after adverse events. Int J Qual Health Care 2005;17:479-486; Epub 2005, Jul 21.
- Gallagher TH, Studdert D, Levinson W: Disclosing harmful medical errors to patients. New Engl J Med 2007;356:2713-2719.