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

Cheryl Clark, for HealthLeaders Media , June 3, 2010

However, the CEO of Tri-City Medical Center, a 397-bed facility in San Diego County, did discuss its more than $130,000 in fines. CEO Larry Anderson explains that when he took over in January 2009, "it became apparent to me that there were matters that should have been reported that had not been. With an abundance of caution, I decided to self-report either that was reportable or questionably reportable." He says he notified the state about three of the incidents that had each occurred nearly a year earlier.

He says he thought that because Tri-City was self-reporting these mistakes, "the state would work with us, which they eventually did to some extent."

But the amounts added up. "When you have something you hadn't reported for a year, that adds up quickly," he says. For those three penalties, the fine came in at $43,800, $46,000 and $32,700. Another two mistakes that weren't promptly reported were discovered by state officials, and amounted to fines of $1,300 and $7,000.

Anderson says the hospital decided to appeal "because we felt the amounts did not fairly match what we did wrong," and because he felt the state should show some latitude since he was reporting incidents that happened during the watch of his predecessor.

"We felt there should have been some sort of an amnesty or process of consideration, since the clean-up effort was on my part," Anderson says.

Ultimately, the three fines totaling $122,500 were reduced to $76,000, Anderson says.

Other hospitals and hospital systems also have felt the sting of heavy fines. Salinas Valley Memorial Hospital was assessed the highest single fine, $52,800, because of a retained foreign object in a surgical patient. Hospital spokeswoman Adrienne Laurent, said the hospital is appealing the fine because not only was the incident eventually self-reported, there were "extenuating circumstances why we don't think this should have resulted in a fine." She declined to explain further.

Fourteen hospitals operated by Kaiser Permanente throughout the state received nearly 40 penalties, but nearly all were for relatively small amounts below $5,000, for delayed reporting amounting to fewer than 50 days. A Kaiser spokeswoman said yesterday she could not respond to questions about whether the fine are appropriate. But she issued this statement:

"Kaiser Permanente is dedicated and committed to delivering high-quality care to our members, our patients, and the communities we serve. Our commitment to quality and safe care is aligned with all regulatory requirements."

Not all hospital officials are balking over the fines, however. Anderson of Tri-City Medical Center, said that even though he thinks they were excessive in his case, "If I did not think reporting or complying with the regulatory requirements is important, I wouldn't have done it. It's a good way to measure, relatively and in a general sense, what's going on from hospital to hospital," he says.

"We paid the price for it. But if I arrived today as a new CEO, I would do the same thing."

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