Ch 3 Legal Concerns and Insurance Issues

Legal Concerns

• Critical to be mindful of the litigious nature of our society as it relates to healthcare.

• Healthcare providers are held accountable for their patient care.

  • And patients

• Potential exists that techniques and procedures used by healthcare providers may result in legal action due to issues of liability and negligence

Liability

• State of being legally responsible for the harm one causes to another person

Standard of Reasonable Care

• Negligence:

  • Failure to use ordinary or reasonable care. (that directly involves: a profession scope of practice, and that states practice act)

• Assumes that a person is of ordinary and reasonable prudence.

• Be thoughtful and careful relative to the situation at hand.

• Must operate within the appropriate limitations of

Torts

• Legal wrongs committed against a person:

Torts: Nonfeasance

• Fail to perform legal duty (that is, fail to refer).

Torts: Malfeasance

• Performs action that is not his/hers to legally perform (that is perform advanced treatment leading to complications)

  • Or known as an act of commission

Torts: Misfeasance

• Performs an action incorrectly that he/she has the legal right to do.

  •  Or known as act of omission

Proving Negligence

• Individual possessing higher level of training will possess higher level of competence.

• Once a healthcare provider assumes duty of caring for a patient that person has an obligation to provide appropriate care.

• Obligation to provide services versus Scope of employment.

• A healthcare provider at an institution has a duty to provide care to individuals at the institution.

  • May be protected through sovereign immunity??? (slim to none)

• Sovereign Immunity:

• Neither the government nor individuals employed by the government can be held liable for negligence.

• May vary state to state.

• Good Samaritan Law:

• Provides limited protection against legal liability to one that provides care should something go wrong

Statutes of Limitation

• Specific length of time an individual can sue for injury resulting from negligence.

• Varies by state but generally ranges from one to five years.

• Clock begins at the time the negligent act results in suit or from the time injury is discovered following negligent act.

• Minors generally have an extension

Assumption of Risk

• Individual is made aware of inherent risks involved in an activity or intervention and voluntarily decides to continue participating.

• Expressed in written waiver or implied from conduct of patient once an activity or intervention begins.

• Can be used as defense against an individual’s negligence suit.

• Does not excuse overseers from exhibiting reasonable care and prudence in regards to conduct of activities or foreseeing potential hazards.

• Many and varied interpretations (particularly with minors).

• Often a waiver will stand in court except in incidents of fraud, misrepresentation, or duress

Reducing the Risk of Litigation

• Work to establish good working relationships with patients, families,

• and coworkers.

• Establish policies regarding healthcare facilities.

• Develop emergency action plan.

• Become familiar with medical history of individuals under your care.

• Maintain adequate records.

• Detailed job description.

• Obtain written consent relative to providing health care.

• Maintain confidentiality.

• Exercise caution with regards to medication distribution and modality use

• Ensure safe equipment and facilities.

• Follow physician’s orders, particularly when dealing with participation in work settings.

• Purchase liability insurance.

• Know scope of practice.

• Use common sense

Product Liability

• Liability of any or all parties involved in manufactured product for damages caused by product.

• Equipment Warning Labels.

General Health Insurance

• Policy that covers illnesses, hospitalization, and emergency care

• How much they cover varies significantly

Accident Insurance

• Low-cost plan to cover accident on school grounds or in the workplace.

• Protects against financial loss from medical and hospital bills.

• Provides for additional protection for institutions above regular policy.

• Will cover costs associated with hospital care, surgery, and catastrophic injuries

Professional Liability Insurance

• Most employees have insurance to protect against damages that may arise from injuries occurring on their property.

• Liability insurance covers against claims of negligence on the part of individuals

• Because of rise in lawsuits, professionals must be fully protected, particularly in regards to negligence

• All healthcare providers should carry and understand limits of coverage

Third-Party Reimbursement

• Primary mechanism of payment for medical services in the U.S

• Policyholder insurance companies reimburses health care providers for services rendered.

• Number of different options:

  • Pre-arranged systems.

• Payment for preventive care:

  • Other systems developed to contain costs.

Health Maintenance Organization

• Provide preventive measures and dictate where individual can receive care

• Permission must be gained to see someone outside of the plan (except in emergencies)

• HMO will pay most of costs if care rendered within the HMO plan providers

Preferred Providers Organization

• Provide discount health care and also limit where treatment can be obtained.

• Must be aware of what facilities are approved for the program in order have cost completely covered

• May include additional types of coverage (physical therapy)

• PPO pay on a fee-for-service basis.

Fee for service (third party reimbursment)

• The more services you do, the more you get paid

Value based service

• Insurance company tends to reimburse based on evidence provided for service

• Has to be evidence the service being provided is necessary for coming up with diagnosis or fix and is effective

High deductible vs Copay

• High deductible: $1500 out of pocket (pay a lot up front) but you pay a lower premium, costs the employer less

  • You have to pay for every service so if they give a bunch of services you have to pay for all of them

  • because the company has a fee for service

• Copay: $20 (cheaper amount) for entire visit as a whole, not individual services

Medicaid and Medicare

they will always reimburse but they decide the rate

Exclusive Provider Organization

• Combination of HMO and PPO plans.

• Restrictive in number and type of providers (more like HMO).

• Most will not pay anything if you use out of network providers.***

Medicare

• Federal health insurance program for the aged and disabled

• Most people age qualify for benefits.

Medicaid

• Health insurance program for people with low incomes and limited resources

• Funded via the federal government and individual states.

• Individual states administer Medicaid.

  • Benefits will vary by state

Workers Compensation

• Laws and benefits for injured workers are mandated by states

• The employer pays premiums.

• Claims are settled by workers compensation insurance carriers

• Insurance carrier goal: return workers to work as soon as possible.

Indemnity Plan

• Most traditional form of billing for health care.

• Fee-for-service plan that allows insured party to seek care without restrictions

• Provider charges patient or third party payer

• Charges are set on fee schedule

Capitation

• Form of reimbursement where members make standard payment monthly regardless of services rendered

• Managed care  plans utilize this practice.

Insurance Billing

• Must file claims immediately and correctly******.

• To facilitate, collect insurance information at the start of the initial appointment or sooner.

• Standard forms are the norm, but accurate and thorough completion is critical.

Filing an Insurance Claim

• Billing codes.

• Diagnostic code.

  • Specifies injury/condition that is being treated.

• Procedural code.

• *they all have to line up

Filing an Insurance Claim

• Billing must be in accordance with current procedural terminology set by AMA.

• ‘Thorough record keeping is critical throughout the process

National Provider Identifier (NPI)

• Government issues identification number for individual health care providers and organizations.

• Covered health care providers, health plans, and health care clearinghouses must use NPI in all administrative and financial transactions according to HIPPA.

• As of 2007, all electronic transactions (claims, verifications, inquiries) require use of this 10-digit number.