Providers can benefit from patient safety organization alignment

December 17, 2018

There is a patient safety organization for practices of every type and size, and nearly all healthcare providers have important interests that can be served that are well worth the costs.

In the 13 years since Patient Safety Organizations (PSOs) were first established, many large institutional providers from all segments of the healthcare field have taken advantage of the benefits they can provide. Relatively few individual practitioners and small practices have sought to participate, however, either because they believe PSOs are cost prohibitive, or assume they will be ineligible because of their size. But there is a PSO for practices of every type and size, and nearly all healthcare providers have important interests that can be served that are well worth the costs. All practitioners should at least possess an accurate, objective understanding of what PSOs are, in order to determine whether alignment will serve the best interests of their practice and patients.

In 2000, the Institute of Medicine (IOM) published its landmark report, To Err is Human, which estimated that between 44,000 and 98,000 hospital patients were dying annually from “preventable medical errors.”  The IOM concluded that these human losses - with a projected annual fiscal impact as large as $29 billion - were the result of a fundamental, systemic breakdown in patient safety infrastructure.

To address this crisis, Congress sought to create a learning environment where health care professionals could evaluate medical errors and near-misses free from the scrutiny of regulators and potential litigants. So in 2005, Congress passed legislation creating a voluntary, privileged and confidential reporting system designed to improve patient safety.  The centerpiece of that law was the establishment of PSOs. 

A PSO can be a private or public entity comprised, at least in part, of medical professionals whose mission and primary purpose is to improve patient safety and the quality of healthcare. PSOs are regulated by the United States Department of Health and Human Services (HHS) and subject to a multistage application and certification process.

There are two types of PSOs: independent PSOs, and component PSOs. An independent PSO is an unaffiliated organization that serves multiple entities and practitioners on a contractual basis, typically charging its members a retainer, based on the services that are requested. A component PSO is either a unit or division of a legal entity; or it is owned, controlled or managed by one or more legally separate parent organizations. Component PSOs are often lean, in-house organizations, consisting of only one executive director and an analyst. 

A provider’s needs and resources will dictate whether they should align with an independent PSO, or formulate its own component PSO organization. Unless a primary care physician’s practice is associated with a large provider group, most individual practitioners will find an independent PSO to be more cost effective. 

PSO cornerstone: Patient Safety Work Product 

By law, all types of PSOs are required to collect and analyze data relating to patient safety and disseminate information designed to improve patient safety, including recommendations, protocols and best practices.  PSOs exist to assist practitioners in minimizing patient risk by providing evidence-based feedback based upon the data they collect and analyze.

The confidential data and information collected by PSOs from the providers they serve is called Patient Safety Work Product (“PSWP”), a category of materials that includes any data, reports, research, analyses and other types of information that has the potential to improve patient safety. Typically, PSWP consists of incident reports of actual patient harm and records of near misses. Such information must have been created or collected by a healthcare provider to report to a PSO; and ultimately it must be reported to a PSO, in order to be considered privileged and confidential.  Similarly, the analyses and recommendations generated by the PSO and delivered to the providers are considered privileged and confidential PSWP.

Not all data and reports are eligible to become PSWP.  For example, medical records, billing and discharge records, and certain records that are created or maintained outside of a provider’s patient safety evaluation system are not eligible to become PSWP.  State mandated reports, such as Sentinel Event Reports, also cannot become PSWP because their underlying transparency requirements conflict with the privileged and confidential nature of PSWP.

Importantly, PSWP is not admissible as evidence in federal or state courts in civil, criminal or administrative hearings.  It is not discoverable as evidence in civil and administrative matters, or in virtually all criminal matters, with one minor exception.  Additionally, PSWP cannot be discovered or admitted into evidence in connection with any state, federal or local disciplinary proceedings, or proceedings of professional bodies created by state law.

A provider cannot be compelled to produce PSWP in the discovery process of a law suit, but those who possess PSWP can disclose it voluntarily as long as the manner of disclosure meets the confidentiality requirements. Even an improper disclosure of PSWP does not impair the privilege. The penalty for an illegal disclosure is monetary, and there is a safe harbor provision sheltering providers from administrative penalties arising out of improper disclosures in certain cases. Unlike the state systems, PSWP can never be compelled by state medical boards or health departments, regardless of jurisdiction. That means that providers who establish a compliant PSO system are free to assess their errors without fear that honest, forthright, self-critical analysis will become a legal or regulatory liability.

Key benefits are confidentiality and improved patient outcomes

State reporting statutes focus largely on imposing sanctions upon bad actors. Their statutory frameworks create an environment where physicians often choose not to talk or write openly about their observations on areas for improvement, for fear of creating potential legal and regulatory hazards to their practice. PSOs establish a "culture of safety" through a non-punitive private voluntary reporting system.

Most physicians are familiar with the concept of attorney/client privilege or attorney work product doctrine. PSOs create a similar type of professional privilege for physicians, designed to keeps some internal quality control documents out of the hands of juries and regulators that may make incorrect assumptions about patient safety by reviewing candid, self-critical analyses that address quality issues.

By aligning with a PSO, a provider’s internal deliberations and analysis conducted within its own patient safety evaluation system are also privileged and confidential PSWP.  As a result, a provider can evaluate its own data before sending it to a PSO, and can also consider a PSO’s recommendations in a completely privileged and confidential setting that avoids the scrutiny of regulators and potential litigants.

The other major benefit of alignment with a PSO for providers involves improvement of patient safety and clinical outcomes. By contracting with a PSO, providers gain immediate access to evidence-based recommendations on quality issues confronting their peers, as well as empirically-based recommendations on how their practices might be improved and made more efficient. 

Using PSO “Safe Tables” practitioners can convene conferences and conduct open and candid dialogues, either in person or by telephone, during which unaffiliated providers can share experiences and propose solutions to problems common to the industry.  While still obligated to adhere to state and federal mandated reporting requirements, a provider can submit privileged and confidential patient injury and near miss event reports to the PSO to obtain advice, guidance and recommendations which, in turn, can reduce the likelihood of recurrence.

Providers who have previously avoided learning about PSOs, either because of misinformation or lack of time, would be well served to take a closer look at the potential benefits they offer, which can include better patient outcomes, fewer errors and near-misses, lower risk of litigation, higher practice profitability and fewer inquiries from disciplinary bodies.

Paul E. Dwyer, JD, and Clint D. Watts, JD, are attorneys at the New Jersey-based law firm, McElroy, Deutsch, Mulvaney & Carpenter, LLP.