Health insurance exchange plan offerings may not be an option for hospitals that fail to contract with qualifying patient safety organizations by the federal deadline. But hospitals are still waiting for CMS to clarify the complex regulation.
A brief and little-known provision in the health reform law says any hospital with more than 50 beds will be shut out of the 2015 health insurance exchange plan offerings if it doesn't have a contract with one of 77 federally approved patient safety organizations. Few have these contracts now.
While the Patient Protection and Affordable Care Act provision takes effect with exchange plans as of January 1, 2015, for planning purposes, hospitals will have to meet requirements long before health plans release their offerings three months earlier, on October 1, 2014.
The problem for hospitals is that information they need from The Centers for Medicare & Medicaid Services—information that is material to the complex PSO regulation—has not been released, and hospitals do not know when they can expect it.
"My fear is that hospitals will be caught by surprise to know that they have to contract with such an organization, other than those with whom they might already have a contract, and not have sufficient time to do that," says Nancy Foster, vice president for quality and patient safety policy for the American Hospital Association.
"While October 1, 2014, is when the new plan offerings will arrive, in order to create a contract and report to whatever authority that you have to contract, and have that recognized so you can be part of a (heath plan's) offering, that will take several months," she said.
As defined by the Patient Safety Act of 2005, qualifying patient safety organizations or PSOs are able to confidentially aggregate reports from providers about medical errors, patient harm, near misses, and other adverse events from multiple healthcare settings without fear of legal discovery, to encourage honest discussions of how these events could be prevented. The effort is also meant to help quantify the frequency of incidents that in any one hospital may be extremely rare.
The federal patient safety mandates are an effort to find a solution to a problem identified in the Institute of Medicine's 1999 report, To Err Is Human, which said hospitals' efforts to improve quality and safety were hampered because they didn't share when things went wrong, or came close.
But Foster laments that the industry lacks clarity on the extent to which they will be required to work with such a PSO. Those PSOs qualifying are so designated by the federal Agency for Healthcare Research and Quality, which has approved only 77 such organizations so far.
That might be enough. But Foster says, "if you look at the PSOs that they've designated, many of them are very restrictive in terms of what they cover. For example, there's one blood banking organization, but they're only interested in errors related to blood use."
Other PSOs appear to focus only on pediatric care, or only on breast cancer care, or anesthesia safety issues, or vascular surgery.
CMS has yet to clarify the situation for hospitals and health plans and it's unclear when and if the agency will issue regulations on how the provision of the PPACA will be enforced. A spokeswoman for CMS's Office of Communications said the agency could not say when such a regulation might be issued.
That's "problematic," Foster says, because "this is a complex issue. Lots and lots of details need to be worked through in order to make that small phrase in the [PP]ACA come to life. We have yet to see anything on it. We haven't seen any preliminary indication of what CMS is thinking at all. And this is a complex area."
Compounding the problem is that between half to one-third of hospitals with more than 50 licensed beds do not have any such agreement with a PSO today. Some that did have discontinued the arrangement.
Many have resisted such relationships because of fears about confidentiality.
The few who do have arrangements with PSOs may be aligned with organizations that aren't on the list. For example, Foster says, many if not most, hospitals work with the Pennsylvania Patient Safety Authority, but it is not on the AHRQ list because it fails to meet certain requirements.
"Some patient safety organizations are very, very effective at helping hospitals with strategies to improve safety. They collect data and analyze it well. But they're not eligible to be designated under the federal system."
Wendy Nickel, of the Society of Hospital Medicine PSO, which received AHRQ approval in 2011, says that while 350 hospitals participate in some or all of its improvement programs, only 50 have signed up for PSO services or programs.
"There hasn't been a great marketing job or promotion about what PSOs are, [or] what protections they provide," she says. "It's no one's fault; it's just that it's been very tough for PSOs to explain who they are and what kind of data protection they offer, describe the legislation and explain why this is important.
"We have some issues coming up in a very time-sensitive manner, and people are either still not aware, or they're starting to scramble around this. We're dealing with a major learning curve."
William Munier, MD, director of AHRQ's Center for Quality Improvement and Patient Safety, acknowledged the issues in an email. He wrote that "some states have state-designated PSOs and private organizations use the term as well." But they are not necessarily qualified under AHRQ's rules.
"That is why a provider that wants to take advantage of the nationwide, uniform Federal confidentiality and privilege protections of the Patient Safety Act, and to participate in the health exchanges, needs to contract with a federal PSO that is listed on the AHRQ PSO Web site," Munier wrote.
To qualify, he says, organizations must "have as their primary activity the conduct of activities to improve healthcare delivery, have qualified staff to aggregate and analyze the confidential data reported by providers, and they have the ability to maintain confidentiality and security of the data reported."
Munier says he has confidence that that those on the list of AHRQ-approved PSOs "have significant capacity" to expand to meet the needs of the large numbers of hospitals hoping to contract with health plans for health exchange offerings.
"The time-consuming element of contracting with a PSO will be a hospital's search for a PSO that represents the best 'fit' for its specific patient safety needs."
He explained that "in anticipation of the [PP]ACA requirement" AHRQ is working to identify additional information that will "assist hospitals narrow their search."
And, he added, "hospitals will not always need to start from square one. In some cases, hospitals can work with one of the more than a dozen PSOs that are either sponsored directly by their state or regional hospital association or jointly sponsored by professional organizations, including hospital associations.
"In other cases, a hospital may be able to look no further than its liability insurer as ore of these firms are sponsoring component PSOs to serve the needs of the facilities they insure."
Foster, however, questions why a hospital that already works with a state organization, such as the Pennsylvania Patient Safety Authority, would have to also work with another organization. "Wouldn't that be wasteful?" she asks.
Laurie Cohen, a partner in the health practice group for the law firm, Nixon Peabody LLP in New York City, says that in her conversations with providers, "plenty of health plans…are unaware of this requirement. This is not on the front burner for them.
"I'm waiting to see if health plans, at some point, will think that this provision will interrupt their network adequacy." It may be, she says, that an insurance company contracts with a hospital to provide services to Medicare Advantage, regular Medicare beneficiaries, and commercially-insured enrollees "but will have to disassociate with that hospital" in exchange plan offerings.
Officials with Americas Health Insurance Plans declined comment.
However, some approved patient-safety organizations are trying to get out the word. One of the oldest, the national ECRI Institute, sent out this e-mail recently in an effort to recruit hospitals:
"The Challenge: The Affordable Care Act has Patient Safety Organization(PSO) requirements. Starting January 1, 2015, a hospital with 50+ beds can only participate in a Health Insurance Marketplace (aka health insurance exchanges) if the hospital has a Patient Safety Evaluation System (PSES) in place.
"The Solution: The time is now for PSO participation—the deadline is looming. Although 2015 may seem a ways off, it is not. ECRI Institute PSO can help you establish your Patient Safety Evaluation System."
ECRI's Executive VP and General Counsel, Ronni P. Solomon, said the organization "is thoroughly prepared" with a scalable program to accommodate large numbers of organizations.
"In fact, the more the merrier, because that means more data to share and learn."