Hospitals Fined More than $1M For Failure to Report Adverse Events

Cheryl Clark, June 3, 2010

One-fourth of California's 450 acute care hospitals have been fined a total of more than $1 million so far—one hospital received five fines totaling more than $130,000—for failing to promptly report adverse events.

Since the state law requiring such fines took effect July 1, 2007, more than 100 acute care hospitals have been assessed at the rate of $100 for every day after five days that the adverse event went unreported and within 24 hours if the situation represents an emergent threat to the safety of a patient, visitor or personnel.

That's according to a database compiled as of Oct. 24, 2009, which officials for the California Department of Public Health acknowledge is out of date because it doesn't include any fines levied since.

Fines are listed on the state website for each hospital separately in a way that makes it hard to add up or compare in full. To do that, one must search enforcement actions for each hospital for each of the three years the fines have been in effect. State officials say they do not provide a complete and current spreadsheet and are not required by law to do so until 2015.

All the money from these fines goes into the state general fund, not into a special fund to improve care, and can be used for anything. As such, it is different than the special fund set up to capture another $5 million the state has assessed hospitals for causing medical mistakes involving immediate jeopardy, lapses in care so serious they caused or were likely to cause serious harm or death to hospitalized patients.

Nevertheless, Lisa McGiffert of Stop Hospital Infections Project for the Consumers Union, says the fact that California fines hospitals for not reporting is a valuable step in creating a transparent system that improves care.

"The most important thing is that they are fining these hospitals and the hospitals do have a financial consequence for failing to report," McGiffert says. "I don't know of anything like it in another state. We're drafting a model law like this (for the rest of the country) and we're definitely putting in a fining mechanism similar to that in California."

She adds that she and hospital officials know full well that most facilities don't provide proper or prompt notice about adverse events even when state laws require them to.

State officials and quality experts have said that by quantifying these mistakes, performing prompt root cause analyses to dissect when and how the errors occur, meaningful steps can be taken to prevent their recurrence. Also consumers, providers, and payers will know which hospitals are being responsive and honest.

Information that hospitals have not promptly or properly reported an adverse event as required by law often comes from hospital officials themselves, perhaps after they realize the event should have been reported or someone comes forward about the event. In other cases, the state hears about such cases in the form of a complaint from a patient, a family member, nurse or doctor or other hospital staff member, says Ralph Montano, CDPH spokesman.

But other incidents of delayed reports are discovered by state investigators during a hospital survey, or "on rare occasions, a surveyor could be looking into another matter and come across records of an adverse event that was not reported," he says.

Adverse events that state law requires be reported to public health officials include wrong surgery, blood or transplant organ incompatibility, transmission of an infectious agent to a patient, administration of an incorrect medication or dosage, in-hospital falls or burns, pressure ulcers, catheter-acquired infections, and surgical site infections.

Jan Emerson, spokeswoman for the California Hospital Association, declined to comment on the fines, as did officials for several hospitals that were asked whether they agreed with their amounts and the duration of time the state allows the bills to continue to add up.

Some were asked whether they agreed with the fact that the fines accumulate steadily on the basis of the passing of time rather than on the gravity of the error that went unreported. Few officials were willing to weigh in.

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