Govt. Change May Increase Hospital Liability Suits, Says Aon

A coming change in Medicare and Medicaid regulations may boost malpractice claims over hospital-acquired infections, injuries, objects left in surgery and pressure ulcers, according to a brokerage.

Those items account for one out of every six claims, according to an announcement from Chicago-based Aon.

The brokerage said those figures were part of the 2008 Hospital Professional Liability and Physician Liability Benchmark Analysis in conjunction with the American Society for Healthcare Risk Management.

Aon said as of Oct. 1, the Centers for Medicare and Medicaid Services will cease reimbursement for ten specific hospital-acquired conditions--often referred to as "never events," several of which are included in the four categories mentioned above.

Greg Larcher, director and actuary of Aon Global Risk Consulting and author of the analysis, said in a statement, "The increased awareness surrounding these non-reimbursable conditions may cause a rise in the frequency of related hospital professional liability claims, not to mention other hospital-acquired conditions not currently addressed by CMS regulations.

The study marks the first time these conditions have been benchmarked and "provides a baseline moving forward for this essential piece of the liability picture," according to Mr. Larcher.

Roberta Carroll, senior vice president of Aon Healthcare, said, "As health care facilities identify areas in need of attention and implement strategies and solutions to improve their current practices, patient safety will improve and the institutions' risk profiles will reflect that successful progress."

Added to the analysis this year are benchmarks for the frequency of indemnity claim payments, or the amount paid to patients to settle a claim.

This standard, Aon said, is important for entities to track as indemnity claims directly drive overall liability costs.

The study includes an analysis of professional liability costs for the surgery, obstetrics and emergency departments. Various supplementary database segments appear in this year's analysis as well, including facility ownership, number of beds and teaching hospitals.

Mr. Larcher said, "For the fourth straight year, we are not seeing an increase in the overall number of liability claims. That said, the not-for-profit segment of the database reflected an increase in claims for the second year."

Aon said that more than 100 health care organizations representing more than 1,200 facilities, ranging from small community hospitals to large multistate publicly traded health care systems, provided loss and exposure data for the study.

The hospital professional liability benchmark database includes 77,705 claims representing $9.3 billion of incurred losses, and contains historical claims information for ten accident years (1998 to 2007).

The Hospital Professional and Physician Liability Benchmark Analysis is available for $350 by calling 1-800-242-2626 and requesting item #178704.

Risk managers who are interested in measuring their organization's liabilities against those of their peers in the industry can visit http://www.aon.com/2008HPLStudy and access Aon's interactive loss cost calculator.