Malpractice Liability with Obamacare

If and only if the "accountable care organizations" (ACO) become a reality, the end product may end up looking far different from what was initially conceived by Obama Care proponents.  Regardless, the goal of healthcare reform will be and should be to encourage providers to become more integrated, reduce waste, prevent needless expenditures, and lead to better healthcare for all Americans. Whether it will reduce the amount we spend on healthcare is debatable and remains to be seen. 

On Aug. 8, CMS reported the findings of its five-year pre-ACO demo. Only four of the 10 participating physician groups received incentive payments. CMS Administrator Donald Berwick, MD, recognized the difficulty in launching ACOs, while remaining positive. “We have learned to invest in sustained improvement over time,” he said, “and [learned] that short-term comparisons between start-up costs and measureable results may fail to realize the long-term value of these efforts.”

Marshfield Clinic, in Wisconsin was one of the top earners in the demo earning $56.2 million in bonus payments – more than half of the total payments in the demonstration project.  Majority of physicians in Wisconsin are already in some sort of HMO type structure designed to reward for performance.  However in this published CMS demonstration the results were sobering. Out of the 10 highly motivated groups only 4 were able to save resources and deliver higher quality care while the balance either sustained the costs and quality or the costs increased without change in quality of care delivered with resulting penalties and reduced payments to the providers. While the Marshfield “phenomenon” like the “Kaiser” model is based on performance incentives, that particular trend had resulted in providers being forced to make decisions based on their pocket books, resulting in higher rates of denial of necessary care and procedures just like it happened in the 1980’s resulting in collapse of the capitated system when the consumers cried foul due to HMO (aka ACO) atrocities and injuries as a result of rationed health care in the name of saving health care dollars. The administration at that time imposed laws like EMTALA and anti-dumping laws.

Threaded throughout the proposed current ACO regulations is certain expectation which may have the unintended consequence of increasing malpractice liability for all physicians deciding to participate in the ACO’s.

Under the proposed ACO model, physicians will necessarily have far greater "duties to the patient." Providers named in a lawsuit may not only need to defend their actions in light of the prevailing standards of care, but also explain the details of an individualized care plan and whether their duties within the care plan were met.  The proposed regulations state, "the ACO and the participants shall demonstrate to the Secretary of CMS that it meets patient-centeredness criteria specified by the Secretary, such as the use of patient and caregiver assessments or the use of individualized care plans."

What's worse is that unless expressly stated otherwise, these individualized care plans may be discoverable by plaintiff attorneys. And assuming that they are relevant to the case, they may also be admissible in a trial.  Plaintiffs will gain a significant advantage if they can demonstrate that a physician did not follow the recommended care plan which will likely be in addition to the current standard of care as physicians become liable for the patient and caregiver assignments. The providers, according to the proposals, are required to make sure the “entire” team is compliant with the treatment plan. This shifts the burden of compliance to the provider rather than the patient who is needs to follow the recommended treatment plan.

How does the CMS propose the providers accomplish this burdensome task, without increasing their overheads,  to supervise the “spoon feeding, hand holding and TLC ” treatment of patients who refuse to follow a treatment plan, are non-compliant or prefer to follow “alternative or un-conventional holistic” therapy?

The CMS proposed regulations does require in “plain and clear language” that the ACO’s and its participants (emphasis added) address the needs of their patient population.  Moreover, "we are proposing that ACOs must have systems in place to identify high-risk individuals and processes to develop individualized care plans for targeted patient populations."  But the big question is who pays for this process and seemingly the burden will rest of the physicians.

Logically, if a physician participating in the ACO does not provide treatment or care consistent with the expressly stated objectives, liability exposure will increase.

With all of these new and burdensome duties and without a directive to shield all of this information from litigation, defending care in some instances may be difficult for an ACO and its participating physicians.

The healthcare reform needs to be tied to malpractice reform, until that happens we can expect ACO’s and participating providers to continue to practice defensive medicine and resulting wastage of resources.

I propose all patients participating in “ACO” model of care be required to participate in a mandatory malpractice mediation paid for by the CMS and all injuries and expenses of mediation be compensated through a “Federal Medical Injury Fund”.  Mediation panels should include representative from ACO’s local unions, the Bar association, Medical Societies and Legislators appointed by the Governor for a two to five year staggered term.

Harbir Makin, MD