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Rx for Litigation: New Inpatient Rule May Lead to More Malpractice Suits

Brought to you by the Real Law Editorial Team

Our circumstances are often defined by fateful decisions. Those decisions can be our own, those made by others (with or without our knowledge or consent), or both.

That’s particularly true with regard to our personal health. You climb a wonky ladder to adjust a second-story TV antenna, for example, and get injured—that’s probably your fault. But after that, the decisions an attending physician in the nearest hospital makes while examining X-rays of your broken bones could significantly affect your recovery.

But what if that physician’s fateful decisions on your behalf are shaped by policies that limit his or her choices?

That’s the dilemma that physicians, hospitals and patients are likely to face as a result of a rule recently proposed by the Centers for Medicare & Medicaid Services (CMS), the federal agency within the Department of Health and Human Services that administers various health-related programs across the country.

In Whose Care?

Those in the legal profession who pursue or defend medical malpractice suits will want to be aware of the proposed new rule, if they aren’t already. In it, the CMS is declaring that an inpatient admission spanning at least two midnights is valid and that shorter stays are not, unless a robust record exists showing that a longer stay was expected. In many ways, the rule redefines who makes decisions about a patient’s best interests.

Traditionally, the decision to admit someone has been left to the judgment of the treating physician, with oversight from the hospital and input from the patient. But with a “two days or no days” policy in effect, health-care providers would be put in the uncomfortable position of recommending care according to a blanket rule rather than patient-by-patient analysis.

Steadfast Against Opposition

Not surprisingly, the American Hospital Association (AHA) reacted immediately, expressing its concern that the rule “could be applied in a way that undermines medical judgment.”

Later, in the midst of a summer flurry of follow-up letters to Marilyn Tavenner, the CMS’s recently confirmed administrator, AHA Executive Vice President Rick Pollack protested more vigorously and argued at length why such a time-based presumption was unwarranted.

Barring the improbable scenario that the CMS cedes to the Association’s request to scrap the rule entirely, Pollock asked for substantial revisions. But those aren’t likely to be forthcoming, either. Under Tavenner, a self-described pragmatist who has won conservative fans with her commitment to running the CMS like a business, the agency appears to be steadfast in its plan to overhaul numerous policies, including the one regarding inpatient reimbursement.

Another factor at play is that the changes are deemed necessary to comply with the Patient Protection and Affordable Care Act and other recent legislation, some of which is focused on reining in health-care costs. That’s why, following a period to allow comments such as those offered by the AHA, the CMS is expected to deliver a final rule to take effect in October 2013.

That doesn’t leave much time to prepare for what amounts to a significant change in the way health-care providers interact with their patients. Meanwhile, there’s growing concern that the rule will increase the exposure to risk of litigation that physicians and hospitals already face while trying to exercise a proper standard of care.

One outcome of essentially barring access to a course of medicine—specifically, a single-day hospital admission—is that patients who are not admitted could receive what might be perceived as insufficient care and/or develop complications that might have been avoided. That adds a significant dimension to weighing options when the alternative—a stay of two or more days—exposes patients to increased risk of hospital-acquired infections, medication errors or new injuries, which aren’t supposed to happen but frequently do. Those complications often result in litigation.

Nor will there be much leeway for working around the policy. The CMS has indicated that it will be vigilant in watching for an “extra midnight” tacked on to what otherwise should have been a “one-midnight stay.” Without significant additional care or tests, the agency will not rubber-stamp inpatient compensation simply because a hospital stay crosses the two-midnight threshold.

All of that puts health-care providers firmly on notice that the proposed rule will definitely alter their decision-making abilities. Moreover, any liability that may result will be borne by physicians and hospitals rather than the CMS, and that is compounding the ire of those who are faced with following the new rule.

Mixed Messages

Another far-reaching concern is that the intrusion on medical judgment stemming from the inpatient rule is not an isolated event. In May 2013, the American Orthotic and Prosthetic Association (AOPA) sued in federal court, accusing the CMS of implementing rules that include denying Medicare claims for prosthetic devices without documentation from a prescribing doctor. Previously, prosthetists were treated by the CMS as medical professionals who could establish the medical necessity of a prosthesis based on a patient’s capabilities.

Leaving aside whether the AOPA has grounds for the suit, the rules impose yet another potential liability, inasmuch as many doctors have limited training in gauging appropriate prosthetics for patients. Also, the CMS is in effect proposing to limit medical judgment with the two-midnight inpatient rule, while showing that it will enforce reluctant medical judgment with regard to other types of claims, such as those for prosthetics. That adds to the current mood of frustration among those who are charged with making fateful medical decisions.

Indeed, that leaves many (not just in the medical community) mulling the practical effects of the recent and proposed changes. The legal profession will undoubtedly be drawn into this latest development in America’s ongoing attempt to reinvent how it administers and delivers health care. That’s because in real law, new ambiguities are almost as irresistible as good precedent when determining whether to launch a case.

The consequences of mixed messages, new standards and resulting uncertainties—along with an angry clash between medical practitioners and a regulating body—make it almost a certainty that more malpractice suits will follow.