HealthLawProf Blog

Editor: Katharine Van Tassel
Concordia University School of Law

Tuesday, July 3, 2012

Harmonizing the ACA with State Tort and Licensure Systems and Hospital Peer Review

The Supreme Court’s decision affirming the constitutionality of most of the Patient Protection and Affordable Care Act of 2010 (“ACA”) is likely to have a profound impact on health care quality, cost and access. This decision allows the country to move forward with ACA programs that encourage the movement from a customary-care model of medical practice to an evidence-based model. However, it appears that the three main state systems for health care quality improvement — the tort, licensure and hospital peer review systems — may stand in the way.

A large and rapidly growing group of empirical studies suggests that the current normative practice of custom-based medicine in the United States has a profoundly negative impact on the quality and cost of health care. The customary care, or eminence-based model of medical practice is based on physician preference and not on objective, scientific evidence.

These quality and cost problems with the customary-care model have triggered a new, national push to move the United States to a modern, evidence-based model of medical practice through major changes in government-provided health care, including the numerous, multi-billion dollar new programs created by the ACA, as well as changes in the VA Hospital System and Medicare.

The evidence-based model of medical practice is grounded in empirical data generated by clinical outcomes and effectiveness research which suggests the optimum treatment for a rapidly growing number of clinical conditions. This use of empirical data generated through scientific methodology to make medical decisions shows great promise for enhancing quality of care while decreasing the cost of care.

Importantly, in conjunction with the American Recovery and Reinvestment Act of 2009, the ACA will be providing hundreds of millions of dollars of funding for research to develop evidence-based clinical practice guidelines that will be used to define the “best  practices” that the Act promotes. For example, under § 10303 of the ACA, these best practice will be used to create more of the same types of patient outcome measures that are already being utilized in Medicare. The ACA creates a new oversight entity, the Patient-Centered Outcomes Research (PCOR) Institute, to direct the Comparative Effectiveness Program that will create data banks comparing the effectiveness of two or more treatments. These databanks will provide much needed decision-making tools for both health care providers and consumers in light of the multiple medications and treatments that are marketed to deal with the same health condition.

Adding another layer to this push for the nation-wide adoption of evidence-based medical practice is the creation by the ACA of the Center for Quality Improvement and Patient Safety (“CQIPS”). This Center will develop tools to facilitate the adoption of best practices by health care providers. CQIPS will award grants and provide technical assistance to help providers adopt best practices. With the addition of this Center, the ACA now has a system for the development of best practices (AHRQ), a system for publicizing these best practices (PCOR) and a system for integrating these best practices (CQIPS) into the everyday practices of hospitals and physicians.

Central to the ACA are the Health Benefit Exchanges and, in keeping with ACA’s theme of improving quality and cost of care, these exchanges also work instrumentally to move the ball forward in these areas. To qualify to sell insurance to consumers through these exchanges, insurers must evaluate providers by the same quality benchmarks that are being used by CMS. As with the CMS reimbursements under Medicare, the higher the rating, the greater the private insurance reimbursement will be for health care services. Continuing the parallel, just like Medicare, the insurance companies must also publish the quality of care and patient satisfaction data that they gather.

Together, the quality improvement provisions under the ACA and CMS create a powerful regulatory engine that should work to move the United States from a system that follows the customary care model of medical care to a modern, evidence-based system of medical care.

State Quality Improvement Systems

Reflecting an understanding of the benefits of evidence-based treatment choices, a significant number of state tort systems are moving away from using customary care as the exclusive proxy for quality of care in medical malpractice actions. These tort systems are allowing the introduction of risk-benefit analysis grounded in empirical science as evidence of what is reasonable care. A recent study by Professor Michael Frakes at the Cornell University School of Law suggests that these tort systems are operating instrumentally to encourage health care professionals to transition away from custom-based to evidence-based medical practice. By virtue of applying their own state law, the state licensure systems of these states are likely to follow suit.

However, there are a significant number of state tort and licensure systems that have not adopted evidence based standards of care. If there is a conflict between customary and evidence-based care choices, physicians are likely to follow custom-based standards to avoid medical malpractice liability, in spite of the incentives contained in the ACA to change. The ACA has some provisions that may start to address the need for these states to adopt the use of evidence-based standards of care, but more is needed. One avenue is to educate state legislators and judges regarding this problem.

Unfortunately, the ACA completely ignores the third major system for improving quality of healthcare, the hospital peer review system. Private hospital peer review is a self-policing system where physicians informally evaluate each other and sanction those physicians who are allegedly failing to provide quality patient care. The majority of standards relied upon in hospital peer review are customary-care standards. A finding that a physician has violated one of these standards can mean that the physician could lose hospital staff privileges and, more importantly, be reported to the National Practitioner Data Bank. This report could mean the end of a physician’s career. Thus, it appears that hospital peer review also encourages the perpetuation of custom-based practices undermining the national efforts to improve the quality and cost of healthcare through the practice of evidence-based treatment choices.

The ACA should be revised to modify hospital peer review so that it can work in tandem with the new federal laws, as well as with state tort and licensure law, to encourage physicians to adopt the evidence-based model of medical practice in order to improve health care quality, cost and access. [Cross posted on Health Affairs]


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