Corporate Compliance: Federal Initiatives to Drive Quality of Care: What Patient Safety Officers Need to Know
May/June 2011
Corporate Compliance
Federal Initiatives to Drive Quality of Care: What Patient Safety Officers Need to Know
Under the recently enacted Patient Protection and Affordable Care Act (PPACA), every healthcare provider participating in Medicare or Medicaid must now have a corporate compliance program in place. Medicare is seeking transparency, quality, and accountability from healthcare providers. To that end, Medicare is financially incentivizing providers who can demonstrate quality outcomes, and will also require that providers can accurately collect and transmit data regarding their quality outcomes as an integral part of their corporate compliance program. Failure to achieve quality outcomes, or the improper or false reporting and collection of quality data, will lead to federal prosecution at worst; at the very least, it may be grounds for recoupment of money paid to the provider. Safety and quality officers should be aware of this aspect of enforcement and how it impacts their role.
Background of Reportable Events
Serious reportable events, “wrong” surgical events, present-on-admission indicators, and hospital-acquired conditions all involve reporting requirements for quality issues. This began in 2002, when the National Quality Forum (NQF) published “Serious Reportable Events in Healthcare: A Consensus Report,” which listed 27 adverse events deemed “serious, largely preventable, and of concern to both the public and healthcare providers.” Over the years this list has been revised and currently contains 28 of the most serious adverse events that can happen in a hospital (e.g., death of a patient after a fall, death of a mother with a low risk pregnancy). Various initiatives standardize the reporting of these “never events,” which involve clinical quality failure and can result in the withholding or recoupment of payment by health insurers. Reportable events can vary by state and may use the NQF list, a subset, or a hybrid version.
The Centers for Medicare and Medicaid Services (CMS) initiated a program to reduce payments to hospitals for inpatients that experience a hospital-acquired condition (HAC). CMS’s list of HACs includes a number of the serious reportable events from the NQF list (e.g., retention of foreign body in a patient post-op).
In addition to HACs, since October 1, 2007, hospitals must report Present on Admission (POA) indicators for all diagnoses reported on Medicare inpatient acute care claims for discharges. A POA is a condition that is present at the time the order for inpatient admission occurs, and the indicator is a way to differentiate conditions present at admission from those developed during the patient’s stay. Reported POA indicators help to identify HACs, which are specific, reasonably preventable conditions identified by Medicare that may be acquired during a hospital stay (e.g., catheter-associated urinary tract infection, air embolism). As of October 1, 2008, Medicare reduces payment for these conditions when they are not POA and the condition increases reimbursement.
CMS has also determined that it will make no payment whatsoever if certain never events occur. On January 15, 2009, CMS issued a National Coverage Determination (“NCD”) concerning three surgical events that should never occur and, accordingly, for which CMS will not pay. Specifically, CMS will not pay for a surgery/procedure when the practitioner erroneously performs the wrong procedure on the patient, the correct procedure but on the wrong body part, or the correct procedure on the wrong patient.
If one of these wrong procedures is performed, Medicare will also not cover the hospitalization stay and other services related to these non-covered procedures. CMS requires that the hospital report the erroneous surgery related to the NCD1. Medicaid and many private insurers quickly followed Medicare’s lead an d will no longer reimburse for these three never events.
Patient Protection and Affordable Care Act
PPACA increased the funding for the Health Care Fraud and Abuse Control program (HCFAC), which provides primary funding for the Office of Inspector General (OIG). HCFAC funds various OIG activities, including establishment of Medicare Fraud Strike Force teams; support of Civil False Claims Act investigations and enforcement; support of administrative enforcement activities; and audits of payments to hospitals. From 1997 to 2008, HCFAC program activities have returned more than $13.1 billion to the federal government through audit and investigative recoveries.
The PPACA will therefore arm the OIG with the additional and requisite tools to better monitor and enforce quality of care issues. The OIG continues to remind providers, especially hospitals and skilled nursing facilities, of the OIG’s ability to exclude them from participation in federal healthcare programs if a facility provides substandard care and asserts that providers should adopt quality of care protocols and implement procedures for assessing compliance with them. Thus, compliance plans mandated under the PPACA must include these elements.
Although there are no federal laws with explicit punitive provisions to punish poor quality care, federal prosecutors have successfully used the federal False Claims Act (“Act”) to do so. The False Claims Act (31 U.S.C. §§ 3729-3733) is a Civil War era statute aimed at preventing and prosecuting fraud by government contractors. It is a civil statute, which permits the government to seek triple the amount of the alleged false claims and up to $10,000 per alleged fraudulent claim. The Act was revised in 1986 by Congress to encourage private citizens with first-hand knowledge of fraudulent activity to act as whistleblowers and bring suit against a provider. If the federal government intervenes in the action and assumes the prosecution against the provider, the whistleblower can be rewarded up to 25% of the monies either reached in settlement or awarded by the court.
In addition to penalties imposed under the Act, if convicted, the provider is also subject to the exclusionary powers of the OIG and could be precluded from participation in Medicare and Medicaid. To avoid this dire result, most providers choose to enter into settlement agreements whereby fines are paid, but no wrongdoing is admitted—liability under the Act, therefore, is avoided and so is the possibility of exclusion.
The fraud theory used by prosecutors in connection with the Act and quality-of-care failures is as follows. In return for payment from Medicare or Medicaid, providers agree to adhere to all the requirements imposed by those programs; when the quality of care becomes sufficiently substandard that it amounts to no care at all, the claim submitted to Medicare or Medicaid becomes a claim for services not rendered and therefore a false claim under the Act. Examples of substandard nursing home care centered on inadequate nutrition and hydration, wound and decubitus care, staffing patterns, and inadequate facilities.
Notably, prosecutors have repeatedly stated that a single isolated instance of poor quality care will not give rise to prosecution under the Act; instead, prosecutors look for patterns or practices which substantiate failure of care.
Further, the False Claims Act will certainly be implicated if Medicare determines that the data submitted related to never events, HACS, POAs, or quality of care measures are inaccurate for falsified.
These increasing links between payment and quality further increase safety and quality officers’ (as well as other clinical and administrative leaders’) responsibilities for ensuring quality outcomes and avoidance of never events. To improve outcomes and reduce healthcare costs, Medicare and Medicaid are clearly linking payments to clinical outcomes. Medicare and other insurers will continue to develop payment methods that serve to reward quality performance, refuse payment for preventable errors, and prosecute providers for falsifying or inaccurately reporting quality data.
Renee Martin and Katherine Autieri are with the healthcare law firm of Tsoules, Sweeney, Martin & Orr, LLC located in Exton, Pennsylvania. Martin is a member of the Editorial Advisory Board for Patient Safety & Quality Healthcare and may be contacted at RMartin@tshealthlaw.com.