Whose information and whose responsibility?

As healthcare organisations consider the Next Generation ACO Model, HRMR examines how provider liability and the use of quality data have developed with the introduction of ACOs—and what might unfold in the future.

The Next Generation ACO Model, which goes into effect from January 1, 2016, will allow accountable care organizations (ACOs) to share a greater portion of financial reward for savings, but will also require them to shoulder more of the risk for losses. As such it looks likely to amplify some of the pressures already seen in ACOs, particularly the need to cut down on unnecessary tests and procedures. But could this affect issues such as risk to patients and provider liability? 

Susan Huntington, an attorney with law firm Day Pitney, says it is likely to put defensive medicine in the spotlight.

“It puts pressure on ACOs not to repeat tests unless they are absolutely necessary,” she says. “However, the liability system in the US still presents a risk to providers and, while there will now be others within the ACO looking at those extra tests—making the defensive medicine more visible—I don’t think that it will immediately lead to a cut back on the defensive medicine.

“I do, however, think there will be some standardisation of the approach to treating common situations so that providers try the more conservative treatment such as physiotherapy first before jumping to high cost imaging or surgery.”

Michael Callahan, a partner in law firm Katten Muchin Rosenman, believes that malpractice exposure is not likely to increase under the next generation model, but he raises the question of whether leaving out certain tests as part of cost saving could be a defense in court.

“If the physician isn’t going to be paid for ordering more tests just because he wants to cover himself, I think that will force the physician and the provider to home in on what is really necessary. 

“But let’s say you decided not to do another test, another procedure, even though in the past you might have, and there is a bad outcome, is it going to be a defense to say that you would not have been paid for that additional test? Probably not at the end of the day—and that’s where there is debate.”

ACOs in the spotlight

Where litigation does arise, Huntington believes that the Next Generation ACO Model creates more potential for the ACO to be named as a defendant.

“The new ACO model is worded so that the ACO is accountable for the care of the patient, which in legal terms almost implies that there is a duty of the ACO to the patient which hadn’t been there before,” she says.

“For example, if someone fails to tell a patient to have a colonoscopy screening procedure, as recommended by the ACO’s clinical guidelines, and the patient develops cancer: she will sue the physician but she may also sue the ACO on the grounds that the ACO was accountable for her care.”

In the light of this, she says ACOs would be wise to ensure that they have the correct insurance: while most understand that they need managed care errors and omissions insurance, the more that they actually manage care and set clinical standards, the more they are going to be at risk for traditional medical malpractice litigation.

“In my experience most ACOs take the position that they don’t deliver care and therefore do not have medical malpractice coverage,” she says. “Historically most Medicare patients did not even know they were assigned to an ACO: they would go and see the doctor but not know what the doctor was going to get paid, or that they were in an ACO.

“However, under the next generation model patients are going to know they are in an ACO because they are going to be told that if they get the majority of their care from the physician who’s in the ACO that they can get a financial reward. 

“Eventually plaintiffs’ attorneys are going to understand about ACOs, which means there is going to be another defendant in the lawsuit if there is a missed diagnosis or someone feels that necessary care has been withheld.”

Under the new model, she says ACOs need to be prepared for the allegation that a patient didn’t get a necessary test or procedure because the physician was being financially rewarded for savings. 

With this in mind, they need to ensure they have a complaints process for when things do go wrong, as this can reduce the chances of an issue escalating into legal proceedings or an investigation being opened by Medicare.

“Patients are often intimidated about making a complaint to their physician, so there should be a process whereby either the patient can complain to someone within the administration of the ACO, such as the chief medical officer, as an alternative to the patient calling the Medicare hotline number,” she says.

When malpractice cases do arise, Huntington says, it will be important to hire counsel with an understanding of ACO regulations and how ACOs operate. Of particular use might be medical malpractice attorneys who defended physicians in the health maintenance organization (HMO) era in cases where it was alleged that the necessary care was not provided because there was a financial incentive to withhold it. 

“It is also helpful if the defense counsel understands what an ACO really does, because if you read the government’s description of the ACO it says that the ACO is accountable for coming up with the standards but that the physician is still responsible for determining the care. 

“You need to have someone who is sophisticated enough to understand what the ACO really does and what the physician’s responsibility is.”

Reporting with care

Another burning issue relating to legal proceedings against ACOs and their physicians is the increased emphasis on—and availability of—quality outcome information. 

Under the next generation ACO model, the list of quality metrics that have to be met in order to share in the savings is growing.

“There is clearly much more of an emphasis on maintaining this quality outcome information—and a lot then has to be incorporated into how you track and monitor performance because now it’s not just a potential liability issue; it’s a reimbursement issue,” says Callahan.

There is a growing tension between doctors’ and healthcare providers’ need to report quality data and the likelihood that it could be used against them in future litigation.

Against this backdrop, Huntington says it is prudent for ACOs to use nationally recognised standard clinical guidelines, because their guidelines will likely be discoverable in a lawsuit. 

“That’s something we struggle with all the time because physicians recognise that there are these national guidelines, but you will always find a vocal minority who feel that their personal standards are higher or better than the national guidelines,” she says.

A subject of special concern at present is that many hospitals and other licensed healthcare providers and ACOs are collecting adverse event, peer review and other patient care quality information and analyses and reporting them to a government certified patient safety organization (PSO). 

Under federal law, information relating to patient safety activities and reported to a PSO is not discoverable or admissible in state or federal proceedings. The scope of these protections, however, is being challenged in state courts, mostly in malpractice litigation where the plaintiffs are seeking access to the sensitive information to help prove their claims.

Callahan currently has a case on appeal before the US Supreme Court (Tibbs v Bunnell) in which the plaintiff’s attorney is pushing to have information sent to a PSO disclosed. The appeal is from a Kentucky Supreme Court decision which very narrowly construed the scope of protections under the federal law known as the Patient Safety and Quality Improvement Act and ordered the disclosure of a protected patient incident report. Hence the appeal has attracted the attention and support of the American Hospital Association, the American Medical Association, and many PSOs and hospitals from around the country.

“One of the emphases in the amicus brief that we prepared is that another primary benefit, and a requirement of PSOs is that when hospitals providers send this confidential information to PSOs, the PSOs can then do benchmarking and comparative analyses; they can prepare a safety report that helps their members learn from mistakes made by others, and change their policies. 

“If that information that is being collected and reported to PSOs is no longer confidential, people will stop sending this information to PSOs.”

He adds that this could undermine the potential for information provided by PSOs to shape quality metrics for ACOs in the future.

“In 2016, 60 percent of all Medicare/Medicaid payments are going to be based on quality metrics. This industry movement to reimburse providers based on the value versus volume of services has long been the focus of private payers as well. The resulting obligation to track quality performance by providers and ACOs in a protected environment therefore makes the role of PSOs extremely important.”

Whatever the outcome of the Tibbs v Bunnell case, the delicate dance between reporting information for the improvement of all US healthcare, and keeping it hidden from attorneys, looks set to remain a defining factor of the US healthcare system for years to come. 

The Next Generation ACO Model will raise the financial stakes, and with it the need to comply with quality metrics and achieve cost savings. It may also make ACOs more likely to be defendants in medical malpractice cases. Exactly how all this plays out for risk managers remains to be seen—but careful reporting will undoubtedly remain a key concern.n