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The U.S. Congress Should Legislate that “Never Events” Are Inadmissible in Medical Malpractice Lawsuits

Perhaps surprisingly to some, the Sunshine State, site of the dangling chad debacles, is leading the country in some positive and proactive legislation.  Florida has set an example for necessary federal legislation.  Florida legislators recently passed forward-thinking legislation with a keen eye toward retaining fairness in the judicial system and containing the escalation of liability costs associated with health care and resulting expenses associated with defensive medicine.  House Bill 479 relating to medical malpractice became law on June 28, 2011.  This legislation includes a use preclusion on the admissibility of “any records, policies or testimony of an insurer’s reimbursement policies or reimbursement determination regarding the care provided to the plaintiff” in any medical negligence action.1  

This broad use preclusion is significant in light of changes to the reimbursement policies adopted by the Centers for Medicare and Medicaid Services (“CMS”) and seeks to address a potential unintended consequence of such legislation before it becomes an issue.  The 2005 Deficit Reduction Act (“DRA”) authorizes CMS to use its value-based purchasing tools to increase quality and efficiency of care.2  The DRA requires CMS to select hospital-acquired conditions (“HACs”) for which hospitals would not be paid higher Medicare reimbursement.3   Effective October 1, 2008, CMS stopped reimbursing health care providers for the provision of care and treatment where certain adverse events occurred, which CMS deemed “reasonably preventable by following evidence-based guidelines.”4  CMS adopted three additional “Never Events” effective January 15, 20095 and it is reasonable to assume that CMS will continue to expand this list of non-reimbursable events. 

Florida’s law defines “insurer” to include any private or public insurer, including the Centers for Medicare and Medicaid Services (“CMS”).6   A “reimbursement determination” is defined as “an insurer’s determination of the amount that the insurer will reimburse a health care provider for health care services.”7 “Reimbursement policies” are “an insurer’s policies and procedures governing its decisions regarding health insurance coverage and method of payment and the data upon which such policies and procedures are based, including, but not limited to, data from national research groups and other patient safety data.”8    

The inadmissibility of this information will ensure fairness in juror consideration of medical malpractice lawsuits stemming from the occurrence of HACs that have been deemed “Never Events” by the federal agency.  Without such a rule, plaintiffs would seek to introduce evidence of the HAC payment rules in order to establish presumptive liability under res ipsa loquitor, the legal doctrine which means “the thing speaks for itself” and shifts the burden to the defendant to prove it was not negligent.  Plaintiffs argue that an HAC could never occur absent negligence.  Many HACs are medically complex, however, and this determination requires expert testimony and a case by case review of the circumstances.  Generally, in medical negligence cases, the parties must present expert testimony to the jury regarding the care and treatment provided to the plaintiff so that the jury can determine whether the medical provider’s care was in line with the “standard of care” for that particular type of medical care and treatment.  This new initiative to incentivize efforts to further reduce the frequency of these HACs does not equate to a determination that the standard of care must have been breached.

Although some “Never Events,” such as a foreign object retained after surgery or surgery performed on the wrong body part or wrong patient, would obviously trigger the doctrine of res ipsa loquitor, others are substantially more complex and are not always preventable by following evidence-based guidelines.  For example, res ipsa loquitor should not be applied to a case involving a patient’s development of a pulmonary embolus because death by pulmonary embolus can occur even where the care provided was appropriate.  Medical research establishes that a small percentage of patients will develop deep vein thrombosis or pulmonary embolus despite receiving appropriate doses of heparin.  Informed consent is obtained from patients to advise them in advance of these possible complications not to warn them of expected negligence.  Similarly, decubitus ulcers are not always preventable in patients with certain co-morbidities and conditions.  For instance, a patient with a fractured neck may develop a pressure sore because moving the patient risks exacerbating the fracture and causing paralysis.  Likewise, a fall may not be preventable, despite the appropriate availability of an in-reach call button and bedrails, where an independent patient refuses to call for help before attempting to get out of bed on her own.        

Res ipsa loquitor is a powerful concept.  If it were applied to a case of medical malpractice involving a pulmonary embolus, for example, the jury would be instructed that the healthcare providers had a duty to ensure that the plaintiff did not develop any pulmonary embolus.  The jury’s analysis of liability would then begin with the presumption that a pulmonary embolus does not occur absent negligence and the hospital or physician would have the burden of proving otherwise.  To allow such billing and reimbursement rules to be admitted as evidence of the “standard of care” would invade the province of the jury and impairs providers’ due process rights.  It is entirely reasonable for Congress to determine that policy-driven billing and reimbursement rules are irrelevant and highly prejudicial to the issues to be determined by the jury.  Although plaintiffs argue that patient safety was the driving force behind the HAC rules, these rules are not safety statutes.  The primary purpose behind the HAC payment rules is to reduce the federal deficit by lowering CMS’s costs.  To create a presumption of negligence in addition to denying payment for care creates a penalty and system cost beyond what providers can cover.

Adding to the risk that providers will face unjustly indefensible medical lawsuits, private healthcare insurers have followed CMS’s lead and adopted similar policies in their payment systems.  HealthPartners (MN) Cigna, Blue Cross/Blue Shield, Aetna, Well Point, UnitedHealth Group have followed suit and added “Never Event” language to their contracts.  The private payer approach is still inconsistent, ranging from not addressing HACs to denying all payment.  Florida’s use preclusion was deliberately drafted to include the reimbursement policies and determinations of any insurer.  

Without federal legislation precluding the admissibility of “Never Events,” the HAC payment rules may have additional unintended impact on hospital admissions and hospitals’ compliance with reporting regulations.  If hospitals determine that they are unlikely to be reimbursed for the care provided to certain patients, i.e. patients with co-morbidities that make them vulnerable to a particular healthcare-acquired condition, hospitals may choose to refuse admission to these patients.  Further, hospitals are required to track and report the occurrence of adverse events in order to improve patient safety by learning from these events and designing systems to prevent future occurrences.  Without this use preclusion, hospitals, which are already experiencing reductions in reimbursement due to the HAC payment rules, would be in the position of anticipating that a potential case may become nearly impossible to defend where evidence of the patient’s insurer’s reimbursement policies will be admitted.  This could have the practical effect of discouraging hospitals’ full compliance with reporting rules for fear of a vast increase in indefensible lawsuits that would essentially double their losses where such an event occurs.  In order to avoid these unanticipated results and ensure that HAC payment rules are not permitted to unjustly impact healthcare liability costs, Congress should follow Florida’s example and legislate that evidence of CMS’s billing and reimbursement policies is not admissible in medical negligence litigation.

1 Florida Statute § 766.102(3)(a).

2 CMS Final Rule 2009, Section 1886(d)(4)(D) of the 2005 Deficit Reduction Act.

3 CMS Manual System, Change Request 5679 (July 20, 2007).

4 The original eleven “Never Events” selected by CMS effective October 1, 2008 are foreign object left in patients after surgery; air embolism; blood transfusion incompatibility; Stage III or Stage IV pressure ulcers; falls, burns, electric shock, or other trauma resulting in serious injury; catheter-associated urinary tract infection; vascular catheter-associated infection; certain manifestations of poor control of blood sugar levels; surgical site infection following coronary artery bypass graft; surgical site infection following certain orthopedic and bariatric surgeries; and deep vein thrombosis or pulmonary embolism following total hip or total knee replacement.  See CMS Final Rule 2009, Federal Register / Vol. 73, No. 161 (August 19, 2008).

5 The three additional “Never Events” adopted by CMS effective January 15, 2009 are a surgical or invasive procedure when the practitioner erroneously performs: (1) a different procedure altogether, (2) the correct procedure but on the wrong body part, or (3) the correct procedure but on the wrong patient.

6 Florida Statute § 766.103(a)(1).

7 Florida Statute § 766.102(3)(a)(2).

8 Florida Statute § 766.103(a)(3).

About the author: Starlett Massey is an associate at McCumber Daniels focusing her practice on complex commercial litigation, long-term care defense and medical malpractice defense.  In addition, Ms. Massey develops educational programs for the firm’s clients and their industries regarding new developments in the law and strategies for minimizing liability.  For more information on this topic, please contact Ms. Massey at smassey@mccumberdaniels.com.

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