Medical Emergency Teams Can Recoup Their Costs by Reducing Adverse Events

In a recent article, Arent Fox counsel Susanna Hathaway Murphy discussed the Study’s conclusion that pediatric hospitals may recoup the cost of METs through the reduction of patient deteriorations. Ms. Murphy notes that several states — including California (Cal. Health & Safety Code § 1279.1), Texas (Tex. Health & Safety Code § 98.1045(a)(2)), and Washington (Wash. Rev. Code § 70.56.010(1) — require hospitals to report certain adverse events, based in large part or entirely on the list of Serious Reportable Events identified by the National Quality Forum. Although not part of the Study’s conclusion, Ms. Murphy points out that because METs reduce the number of patient deteriorations, they may also reduce the number of events that would have to be reported to state agencies. Therefore, the MET cost savings may go beyond medical treatment costs, and include the costs of complying with reporting requirements and any penalties that otherwise might have been assessed.

Ms. Murphy’s article first was published by the American Health Lawyers Association’s Regulation, Accreditation, and Payment Practice Group on September 10, 2014, and is reprinted in its entirety, below. For questions about this article, please contact Susanna Hathaway Murphy.

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Medical Emergency Teams Can Recoup Their Costs by Reducing Adverse Events

A recent study (Study) published in Pediatrics illustrates that the yearly cost of a medical emergency team (MET) (sometimes known as a rapid response team) can be recouped by preventing as few as 3.5 patient deteriorations during that time period. Because patient deteriorations are sometimes reportable as adverse events under state law, the cost-effectiveness of METs might be bolstered when attorney hours needed to comply with regulatory reporting requirements and resulting action are added to the equation.

Awareness of patient safety has prompted states to implement comprehensive systems for reporting adverse events that occur at hospitals and other facilities. In defining what constitutes a reportable adverse event, legislatures have heavily borrowed from the list of Serious Reportable Events identified by the National Quality Forum (NQF-SREs). Among others, the NQF-SREs include events involving surgical or invasive procedures, medical devices, patient protection, care management, and the environment of care. For example, statutes in both Texas and Washington specifically reference the NQF-SREs in their definitions of reportable adverse events. California, on the other hand, requires that hospitals and other facilities report adverse events that are similar to, but not in all cases the same as, the NQF-SREs. California also includes a broad “catchall” requirement, where adverse events that “cause” a death or serious disability of a patient, personnel, or visitor must be reported.

The decision to report an adverse event can be complex when reporting requirements are attached based on causality or patient outcome, i.e., when a patient suffers a serious injury or disability as a result of an event. With short time frames for reporting, it can be challenging to quickly unravel what occurred and make a judgment regarding cause and likely impact to the patient for reporting purposes. Adverse events can also result in penalties and regulatory scrutiny. Consequently, the best approach is to avoid adverse events from occurring in the first place.

Patients often exhibit warning signs before acute deteriorations. METs are intended to intervene during this period, with rapid assessment, stabilization, and transfer to a higher level of care, to minimize patient injuries and poor outcomes. Several studies have illustrated the clinical effectiveness of METs in reducing mortalities, cardiac arrests, and other patient deteriorations. Until now, however, no study evaluated the financial costs of implementing an MET in light of the potential benefits.

The Study sought to determine the annual number of patient deteriorations that, if avoided, would offset the costs of implementing an MET. Conducting a retrospective review, the authors examined data from The Children’s Hospital of Philadelphia between 2007 and 2012, to determine the cost of certain patient deterioration events that involved unplanned transfers to the Intensive Care Unit. The authors then analyzed different MET staffing models in comparison to the annual reduction in patient deterioration events needed to offset the costs of such METs.

The Study determined that the annual cost of an MET comprising a nurse, respiratory therapist, and ICU fellow, with concurrent patient care responsibilities independent of MET duties, was equivalent to the cost savings associated with a reduction of about 3.5 patient deterioration events per year. Therefore, although implementation of an MET could be expensive, the costs can be recouped with a reduction of only a few patient deterioration events in a given year. The cost savings could be potentially much higher for providers reimbursed with bundled payments.

By extension, it appears that, if implementation of an MET can reduce patient deteriorations that would also be considered reportable adverse events under state law, the MET could save the additional costs associated with investigating, analyzing reporting requirements, and filing mandatory adverse event reports. It could also help avoid potential penalties and regulatory scrutiny that can follow an adverse event. Thus, an MET may be even more cost-effective than the Study suggests.