Do healthcare managers have an ethical duty to admit mistakes?

Healthcare Financial Management, Oct, 1998 by Michael Nowicki

Many managers erroneously believe that Federal investigations target only fraud, or intentional misrepresentation of fact. Abuse, or the unintentional misrepresentation of fact, however, also has become the target of recent investigations. The Coalition Against Insurance Fraud estimates that 49 percent of all fraud and abuse includes billing for services not rendered, while another 7 percent includes medical record coding errors. Under the False Claims Act, the Federal government does not have to prove that claim was submitted with the intent to defraud but only that a claim was submitted in an environment that was likely to produce a false claim.

In 1991, the United States Sentencing Commission issued guidelines for Federal judges to use in sentencing those found guilty of fraud and abuse. The guidelines allow for lighter sentences for corporations that have corporate compliance programs in place designed not only to prevent and detect violations including billing and coding mistakes, but also to respond to detected violations in a consistent and timely manner, including full disclosure of the violation to the appropriate government officials. h

Unlike other consumers, patients seeking care seldom fully understand the care, or the bill, they receive. Instead, patients trust that physicians and healthcare organizations will act in their best interest. While good legal, ethical, and financial arguments can be made against disclosing mistakes, such conduct violates the trust patients give their physicians and healthcare organizations.

a. Whitman, A. B., Park, D. M., and Hardin, S. B., "How Do Patients Want Physicians to Handle Mistakes? A Survey of Internal Medicine Patients in an Academic Setting," Archives of Internal Medicine, December 1996, pp. 2565-2569.

b. Stafford v. Shultz, 42 Cal.2d 767, provides a full discussion of such requirements.

c. Kruegar v. St. Joseph's Hospital, 305 N.W.2d 18.

d. Nutty v. Jewish Hospital, 571 F. Supp. 1050; Wohlgemuth v. Meyer, 293 P.2d 816; Borderion v. Peck, 661 S.W.2d 907; Waters v. Del-Ky; Inc., 844 S.W.2d, 250.

e. Peters, J. D., and Peraino, J. C., "Malpractice in Hospitals: Ten Theories for Direct Liability," Law, Medicine, & Health Care, December 1984, pp. 254-259.

f. Lowes, R. L., "Made a Bonehead Mistake? Apologize," Medical Economics, May 12, 1997, pp. 94-104

g. Summers, J., 'A Duty to Report Patient Care Mistakes? Changing Roles for Healthcare Managers," Journal of healthcare materiel management, February 1993, pp. 64-66.

h. Nowicki, Michael, The Financial Management of Hospitals and Healthcare Organizations, Chicago: Health Administration Press, 1998.

ABOUT THE AUTHORS

Michael Nowicki, EdD, FHFMA, FACHE, is associate professor of health administration, Southwest Texas State University, San Marcos, Texas, and a member of HFMA's South Texas Chapter.

Maneesh Chaku is a data analyst, Seton Medical Management Resources, Austin, Texas.