One of the most significant tasks managed by Health Service Administrators is managing the legal and regulatory issues that face healthcare, and health care providers. Leadership is called upon to ensure that these legal premises are followed, in order to protect patients, health care providers, and health agencies alike. Ann Smith, CEO UK Healthcare was tasked to explain some of the leading legal and regulatory issues which impact the delivery and management of healthcare. She indicated that the most prominent issues listed in no particular order, from a legal standpoint, facing health service administrators include the application of HIPPA, or health care privacy, The Drug reimbursement program 340B, and the Patient safety and quality improvement act, especially as it is related to the occurrence of malpractice. Finally, she notes that conflict of interest should also be considered as an area that needs more active control, and investment on the part of administration.
Ann Smith is a distinguished chief executive officer who has a background in medical technology having graduated with honors from the University of Kentucky. Having started as a lab technologist, Smith has managed to rise through the ranks to the highest position of being a CEO and has 35 years of experience to indicate that she has had an illustrious career that she is ready to prolong as long as she is able to soldier ahead. As such, her view of the greatest legal challenges that currently face the medical field is both practical and valuable.
The first area of concern, or legal and regulatory concern, for health care administrators is HIPPA, or the Health Insurance Portability and Accountability Act of 1996. This legal regulation, implemented by the United States, is designed to provide data privacy and increased security for protecting medical information, like electronic records, from abuse. More specifically HIPPA “provides the ability to transfer and continue health insurance coverage” when jobs are lost, “reduces health care fraud and abuse, mandates industry-wide standards for health care information on electronic billing and other processes, and requires the protection and confidential handing of protected health information” (California Department of Health Care Services, 2016). She states that it is easy to violate HIPPA in ways that seem innocuous. For example, when sharing information about something that the individual health care provider saw, but was not directly involved with, or even when trying to access personal medical information about one’s self or someone they are close too. More specifically, Smith states: “ - we have to step back as care providers and recognize that because we had that knowledge from working here” or even when “checking on my own results in the computer. That’s a HIPAA violation. So it’s very tough” (Smith, 2016). She reiterated ensuring privacy as required under HIPPA has become a challenge to the hospitals and healthcare institutions, because people violate it unintentionally, and because it is hard to maintain medical privacy in the very public healthcare setting.
As a second point of interest, Smith indicated that 340 Drug Pricing Program poses a major legal issue for health care providers. The 340D drug reimbursement program is a federal program designed to help keep prescription drug costs in control. It is actually comprised of two separate levels or made up of two unique issues. First, there is the governmental or legislative issue, which is directly tied to the job of health administration, and maintaining a firm understanding of the legal issue, and the regulation that dictate billing for prescription drugs. Additionally, the second element of 340 B which must be considered is the reimbursement program, which for participating hospitals, provides partial payment for prescriptions that are provided to the uninsured and underinsured at a discount rate. Hospitals can then use these funds to support necessary programs, or underserved areas of patient care.
With regard to the regulation, more generally, Smith notes that the Affordable Care Act has created a market in which a growing number of providers from big pharma do not want to participate in the 340D program. This is because they “want the money back,” that they lose as a part of the program agreement (Smith, 2016). In contrast, with regard to the reimbursement program, Smith defines it as “a program that went into effect in the ’90s where hospitals with a high level of disproportionate share patients -- meaning we have a lot of folks who are either under or uninsured get -- are able to buy and deliver drugs at a reduced cost, so that we get a little break on the fact that we’re not getting paid for the work that we do and then can take the money that we save and reinvest it in programs to care for those patients.” While there is strength in the ability to reallocate these funds, it still demonstrate concerns that there are significant areas of financial loss for those that provide care. As a result, HRSA and other overseeing bodies want greater regulation in the program, known as “Mega-guidance” which can begin “contracting the breadth of that program” and provide greater control over its use (Smith, 2016).
The third area of concern is the Patient Safety and Quality Improvement Act of 2005, or PSQIA, is established as a voluntary reporting system that is designed to enhance the data available to assess and resolve issues of patient safety and health care quality issues. Ann Smith (2016) dwelled heavily on this issues, as she felt this this, and its closely related issue of malpractice were one of the greatest legal issues for not only her office, but for the medical system at large. The Patient Safety and Quality Improvement Act is a voluntary federal program that is designed to establish teams to peer review incidents that compromise patient safety, with the goal of preventing future error. Smith defends the need for the program as follows “you have human beings taking care of human beings, and human beings make errors -- well-intentioned, excellent care providers, not negligent, make mistakes” (Smith, 2016). As such, these mistakes should be analyzed in a meaningful way in order to determine exactly why the error occurred. She describes the causes of these errors as “discoverable,” further describing the process as getting a group of professionals together to “sit down and retrace those steps and figure out what went wrong, and almost without exception, it’s something systematic like the drug labels look the same, or they look a lot alike, or the words look like each other, or somebody put this instrument in the bin that was supposed to have this one, and this one was grabbed by mistake. So until we sit down and look at step-by-step-by-step what happened” (Smith, 2016).
In doing so, medical providers are able to shift blame away from the medical care providers who make mistakes, and instead focus on how the delivery system for medical care can be improved in order to reduce the number of mistakes that occur. Unfortunately, this is not being implemented equally across all medical care centers. Smith (2016) notes that Kentucky is among three states who have exempted themselves from adherence to the PSQIA standard, maintaining that the regulation is at this point voluntary. This position is highly contentious, however, as the federal government seeks, through congress to increase compliance and application of the legislation and its guiding principles. Those supporting the application of PSQIA hold that it is useful not only in terms of protecting patient safety, but also in protecting the hospital, or care centers’, profitability. The greater number of errors there are, the more likely the institution is to pay out restitution or to face costly law suits as the result of medical malpractice. Smith (2016) gives the example of wrong site surgery where for example, a patient comes in for surgery on their left knee, but experiences surgery on their right. As a result, the hospital must inform the client that the error has been made, and engage in “disclosure,” or the process of admitting wrongful treatment in the medical setting. This process is, to some degree, like a legal mediation process, in that it demands that the hospital and the family engage in an open discussion about what has happened, what it means for the patient, and what should be done to correct or remedy the situation. Smith (2016) states that the hospital must “be honest and admit fault, say where we went wrong, and pay when appropriate.” However, the cost of admitting fault in this way is high, and so preventing the need to make such payments must be at the forefront of legal concerns for hospital administration.
Finally, Ann Smith notes that conflict of interest has become an area of growing concern for health care administrators as it relates to the relationships between healthcare providers and their patients. Conflict of interests occur when medical care providers can benefit financially from making specific medical decisions. Smith gives the example of a doctor who has a vested in interest in a medical technology company. She notes that doctors must pose the question “has my high calling been tainted by this vested interest? Have I invested in the devise company and they are paying me?” (Smith, 2016). In these cases the doctor’s self-interest can be placed before the best interest of their patient, and they can find themselves in a position where they are consciously, or unconsciously swayed by their vested interest in a brand or product. These private influences must be removed from the process of making medical decisions, as hospital administrators work to manage and remove conflict of interest from patient care.
Health service administrators are responsible for a number of processes within the medical care setting, not the least of which is ensuring that the facility remain legally compliant and adherent to the regulations established for their practice. Understanding the primary challenges that administrators face in this regard can be meaningful when determining managerial priorities. As such, expert Ann Smith notes that these priorities must include HIPPA, 340 D prescription reimbursement, the Patient Safety and Quality Improvement Act, and navigating conflict of interest. These legal issues are still evolving and stand at the center of both the quality of patient care delivered and the profitability of the businesses that provide them with care.
References:
California Department of Healthcare Services (2016) “What is HIPPA.” Laws and Publications. Retrieved from http://www.dhcs.ca.gov/formsandpubs/laws/hipaa/Pages/1.00WhatisHIPAA.aspx
Smith, A. (2016, Feb. 12) Personal Communication.
