Prior to taking their regular August recess, Congress passed and the president signed the "Patient Safety and Quality Improvement Act" (the "Act"). The Act comes six years after the release of the Institute of Medicine's report "To Err Is Human," which found that preventable medical errors lead to the deaths of as many as 98,000 hospitalized patients every year and injure one million more. The goal of the Act is to improve health care quality and reduce the occurrence of adverse incidents through the analysis and subsequent dissemination of information regarding patient safety. The Act suggests that this would be achieved through specific patient safety recommendations, protocols and, perhaps, information regarding best practices.
The Act establishes a voluntary patient safety reporting system, through which hospitals, nursing homes, physicians and virtually every kind of health care provider may voluntarily report certain patient safety data to newly established patient safety organizations (PSOs). The U.S. Department of Health and Human Services (HHS) will be responsible for the certification process and for maintaining a list of certified PSOs. Entities seeking certification must meet specified criteria enumerated in the Act. A PSO may be provider owned and operated, but, in that instance, the PSO must be able to demonstrate that it can still fairly and accurately perform its patient safety activities. The Act does not dictate the relationship between a PSO and providers or provide a process if there's a difference of opinion between the two regarding patient safety data. However, every PSO must provide patient safety activities for more than one provider. In other words, a single hospital or nursing home would not be able to establish a PSO for the sole purpose of receiving and reviewing data generated by itself. However, a hospital system, association of providers, or nursing home chain would be able to develop its own PSO, since it would be working with multiple providers.
Providers willing to participate in the program would submit "patient safety work products" (or "work products") to PSOs for review and analysis. Patient safety work product includes any data, reports, records, memoranda, analyses (including root case analyses) or written statements regarding patient safety issues. However, it explicitly excludes a patient's medical record and billing and discharge information. By definition, the work product also does not include information developed separately or information that exists separately from a patient safety evaluation system. The Act does not clearly define whether peer reviews, credentialing or state-required adverse incident reports would be considered "work product. Thus, providers must independently decide whether to include such documents, knowing that doing so will result in a more realistic analysis and report that accurately portrays the significance of the activities.
Work products submitted to PSOs in the context of the Act are afforded significant privilege and confidentiality protections, which, in addition to the patient safety activities, may be of significant benefit to providers. For HIPAA purposes, PSOs are treated as "business associates" and their activities as "health care operations." Thus, in addition to protecting patient-identifiable information, PSOs are also afforded provider and data reporter protections. As such, work products are not subject to federal, state or local civil, criminal or administrative subpoenas or discovery. Additionally, work products may not be admitted as evidence or admitted in professional disciplinary proceedings by state licensing authorities. The exception to this rule is if a provider voluntarily disclosures it work product to an accrediting body. Work product reported to PSOs is not intended to circumvent regulatory requirements imposed on providers, but to promote patient safety and quality improvement through qualified analyses.
The Act is effective immediately! However, it will take some time for HHS to certify and list PSOs. There are no penalties against providers that chose not to participate, but providers may be enticed to voluntarily share work product, given the additional protections for sensitive data and the prospect of improved patient safety. Ultimately, the Act does envision the development of a national network of patient safety databases, which may result in data standards and dissemination of regional statistics, including trends and patterns of health care errors.TAX ADVICE DISCLAIMER: Any federal tax advice contained in this communication (including attachments) was not intended or written to be used, and it may not be used, by you for the purpose of (1) avoiding any penalty that may be imposed by the Internal Revenue Service or (2) promoting, marketing or recommending to another party any transaction or matter addressed herein. If you would like such advice, please contact us.