1. D R . M O H A M E D M O S A A D H A S A N
M D , M P H , C P H Q , C P P S , G B S S
Claims Management

2. 􀁹 Compare and contrast claims management activities
with loss prevention activities
􀁹 Distinguish between a claim, a potentially compensable
event, a sentinel event, and an adverse outcome.
􀁹 Describe the four elements that must exist in order for
there to be professional liability
􀁹 Discuss the various exposures for different types of
Organizations.
􀁹 State the critical steps in a lawsuit

3. Definitions
 Sentinel Event - any unexpected occurrence
involving death or serious physical or psychological
injury, or the risk thereof.
 Adverse Outcome - a clinical outcome that, while
neither desirable nor necessarily anticipated, may still
have been a known possibility associated with the
treatment or procedure.

4. Definitions
 Potentially compensable event ( PCE ) : an
occurrence that may end up with claim/suit with
subsequent payment made by the organization to the
patient/family.
 Claim - Formal notification (generally in writing)
that monetary damages are being sought for an
alleged injury.
 Lawsuit - Formal legal action filed in court.

5. Definitions
 Corporate liability : it is the legal responsibility of
the healthcare organization to provide reasonable
care and safe environment to its patients/customers ,
to provide functioning equipment and supplies , and
to select all persons who practice within the
organization with care with commitment to
supervise them.

6. Definitions
 Insured Parties: organization and employees;
other organization has agreed to provide coverage.
 Duty to Defend: insurer will defend any claim or
suit alleging injury or damage and seeking damages
covered under the policy.
 Duty to Pay Damages: insurer will pay damages
covered within the policy period

7. Definitions
 Reserves: estimates of the amount ultimately
required to settle a claim or pay a judgment
(indemnity reserve) and to provide for a defense and
pay other allocated expenses related to managing a
claim (expense reserve)

8. Different kinds of Liabilities

9. Professional Liability
Physicians/independent Practitioners
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 Liabilities of Lack of documentation of treatment;
 Inadequate work-up (based on accepted
standards);
 Acts of others (e.g., nurses) if exercising control
 Failure to attend or follow up;
 Mistaken identity (along with the institution);
 Misdiagnosis, if based on inadequate examination
and testing;

10. Professional Liability
Physicians/independent Practitioners
10
 Wrong diagnosis followed by improper treatment
causing injury;
 Treatment outside field of competence;
 Abandonment (neglect or failure to follow up after the
acute stage of illness--unilateral termination of the
physician-patient relationship without notice to the
patient);
 Failure to obtain informed consent;

11. Professional Liability
Physicians/independent Practitioners
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 Failure to seek consultation or refer to a medical/
surgical specialist;
 Use of unprecedented procedures, unless approved
by a respectable minority of medical opinion;
 Failure to order diagnostic tests which are considered
to be a "matter of common knowledge";
 Failure to obtain results of diagnostic tests ordered;

12. Professional Liability
Physicians/independent Practitioners
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 Infections resulting from failure to utilize proper procedures
/precautions;
 Aggravation and/or activation of a preexisting condition if
injury results;
 Premature dismissal or discharge.

13. Professional Liability
Nurses
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 Administration of drugs inconsistent with nurse practice
acts, or institutional policies;
 Failure to follow physician/independent practitioner orders;
 Failure to report significant changes in a patient's condition;
 Failure to take correct verbal or telephone orders;

14. Professional Liability
Nurses
14
 Operating room sponge/instrument miscounts; -Patient
burns;
 Patient falls;
 Failure to report defective equipment;
 Failure to follow established nursing procedures;
 Negligent handling of patient valuables.

15. Question
 A Physician asks a nurse to cancel EKG for a patient.
The nurse forgot to record this cancellation & then
the patient died. the physician should:
1. do nothing since the cancellation is the cause of
death
2. ask the nurse to write cancellation in the medical
record
3. add an addendum to the record that the EKG had
been cancelled
4. the physician add the cancelled order to the record

16. The Concept of Negligence
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 Negligence means lack of proper care.
 "Proper care" is based on a defined standard established
by law to protect others against harm;
 In medical malpractice "proper care" is judged by peers;

17. The Concept of Negligence
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 Negligent conduct (based on set standards and under like
circumstances and training) is
 Doing what a reasonable person would not do (Act of commission);
 Failure to do what a reasonable person would do (Act of omission).
 Gross negligence: failure to act if there is known or
suspected risk resulting in adverse impact or death;
 Contributory negligence: a plaintiffs proven contribution
to his/her own harm.
 Res Ipsa Loquitur= clear evidence.

18. Burden of Proof for Negligence
(all elements must be proven)
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 Duty: The healthcare institution having custody of a patient
must:
 Breach of duty, based on policies or procedures
(advertised standards of care) or "reasonable" standards of
care set by law, regulations, or peers; Measurable harm
(injury);
 Causation: The breach of duty caused the injury.

19. Claims Process
 Identification
 Investigation
 Documentation
 Reporting
 Reserving
 File Management

20. Claims Identification and Investigation
 Report of an event (formal and informal).
 Internal investigation.
 Guidelines for investigating an event.
– Discover and document the facts
– Secure evidence
– Determine the applicable standard of care
– Assess the applicable legal principles
– Communicate with appropriate persons

21. Reserving of Claims
 Set aside money to pay indemnity costs and legal
fees.
 Critical for the financial soundness of the insurance
company or the self-insurance fund.
 Reserve set when exposure can be sufficiently
assessed.

22. Litigation Management
Selecting a Defense Firm
– Experience
– Multiple attorneys capable of handling the case
– No clients preferred over others
– Billing rates
– Geographical proximity
– Current caseload
– Experience with subject matter
– Experience with plaintiff counsel

23. Litigation Management
Communicating with Defense Counsel
– Acknowledgment of assignment
– Designation of trial attorney
– Investigation
– Medical reviews
– Settlements
– Reporting requirements

24. Litigation Management
Controlling Legal Fees
– Hourly rates.
– Professional services.
– Miscellaneous expenses.
– Bill auditing.

25. Litigation Management
Evaluating Defense Firm Performance
– Procedural compliance.
– Track record.
– Billing.
– Understanding of underlying medical issues.

26. Claims Settlement Process
 Negotiate with the claimant if not represented by
legal counsel.
 Negotiate with the claimant's attorney if represented
by legal counsel.

27. Question
A potentially compensable event may exist:
A. In the absence of an injury.
B. Only in the presence of a physical injury.
C. Only in the presence of a physical or
psychological injury.
D. Whenever a lawsuit is filed.

28. Corporate Compliance
Examples of Fraudulent Activities
– False claims and fraudulent billing.
– Bribes, kickbacks, excessive or unreasonable
discounts or rebates, and profit-sharing agreements.
– Medical neglect or abuse of a patient.

29. Corporate Compliance
Why have a Compliance Program
– Fulfill a legal duty to ensure false or inaccurate
claims are not being submitted.
– Demonstrate a commitment to honest and
responsible beliefs and practices.
– Provide a more accurate view of employee and
contractor behavior.

30. Corporate Compliance
Why have a Compliance Program
- Identify and prevent criminal and unethical conduct.
– Improve the quality of patient care.
– Implement a means for immediate and
appropriate corrective action.

31. Corporate Compliance
Minimum Compliance Program Elements
– Develop and distribute written standards of conduct and
P&Ps that demonstrate the organization’s commitment
to compliance.
– Designate a chief compliance officer and an appropriate
oversight committee.
– Develop and implement regular and effective employee
educational programs.

32. Minimum Compliance Program Elements
– Implement and maintain an appropriate confidential
complaint process.
– Develop a system to respond to allegations.
– Use audits to monitor compliance.
– Investigate and resolve identified problems.

33. To sum up
we have discussed
􀁹 Distinguish between a claim, a potentially compensable
event, a sentinel event, and an adverse outcome.
􀁹 Describe the four elements that must exist in order for
there to be professional liability
􀁹 Discuss the various exposures for different types of
Organizations.
􀁹 State the critical steps in a lawsuit