Division 9. Best Practices for Risk Management and Loss Control for For-Profit and Not-For-Profit Nursing Homes
28 TAC §§5.1740 - 5.1741
The Texas Department of Insurance proposes new Division 9, §§5.1740 - 5.1741 concerning best practices for risk management and loss control for for-profit and not-for-profit nursing homes. These new sections are necessary to implement legislation enacted by the 77th Legislature in Senate Bill (SB) 1839. SB 1839, among other things, adds Article 5.15-4 to the Insurance Code to require the Commissioner of Insurance to adopt best practices for risk management and loss control that may be used by for-profit and not-for-profit nursing homes. Article 5.15-4 further provides that a nursing home's adoption and implementation of these best practices may be considered by an insurance company or the Texas Medical Liability Insurance Underwriting Association (JUA) in determining rates for professional liability insurance applicable to a for-profit or not-for-profit nursing home. The best practices proposed by these rules and created pursuant to Article 5.15-4 do not establish standards of care for nursing homes applicable in a civil action against a nursing home. Rather, in accord with the legislative focus, these best practices concentrate on procedures to minimize insurance claims. Quality of care issues, although related to the proposed rules, are not the subject of these rules. Pursuant to SB 1839, quality of care issues are the responsibility of other health and human services agencies. In developing the best practices for risk management and loss control, Article 5.15-4 also requires the commissioner to consult with the Texas Health and Human Services Commission and a task force appointed by the commissioner that is composed of representatives of insurance companies that write professional liability insurance for nursing homes, the JUA, nursing homes, and consumers. By Commissioner's Order No. 01-0809 dated August 23, 2001, a task force was appointed consisting of the General Manager of the JUA and three representatives of each of the other categories of entities set forth in Artic le 5.15-4. Based on input from consultations and meetings with the Health and Human Services Commission and the task force and on review of various treatises and publications in the field of risk management and loss control, such as Mehr and Hedges, Risk Management, Concepts and Applications and MMI Companies, Inc. (St. Paul Insurance Companies), "Long Term Care," Clinical Risk Modification Program, the department proposes initial best practices for risk management and loss control that set forth guidelines to handle and respond to the following nursing home risk exposure areas: falls, resident abuse, pressure ulcers, nutrition and hydration, medication management, restraints [if used], infection control, burns and scalds, and elopement. The task force helped to identify the nine key risk exposure areas for attention by nursing home loss control programs and reached a consensus on the guidelines, which were also reviewed by representatives of the Health and Human Services Commission. Due to the individual characteristics of each nursing home and ongoing research and development in nursing home care, the task force consensus was that the best practices would outline a basic structure for risk management and loss control as a starting point for a nursing home. Accordingly, the proposed rules contain this basic structure which over time may be subject to further refinement. Proposed §5.1740 describes the purpose and scope of the sections. Proposed §5.1741 sets forth the enumerated best practices for risk management and loss control that may be used by for-profit and not-for-profit nursing homes and that may be considered by an insurance company or the JUA in determining a nursing home's rates for professional liability insurance.
Consideration of the proposal will occur in a public hearing under Docket Number 2501 scheduled for 9:30 a.m. on November 29, 2001, in Room 100 of the William P. Hobby, Jr. State Office Building, 333 Guadalupe Street in Austin, Texas.
Marilyn Hamilton, associate commissioner of the property and casualty program, has determined that for each year of the first five years that the proposed sections will be in effect, there will be no fiscal implications to state or local government as a result of enforcing or administering the new sections and that there will be no effect on local employment or the local economy.
Ms. Hamilton also has determined that for each year of the first five years the proposed sections are in effect, the anticipated public benefit from administering these sections is enhancing the insurability of for-profit and not-for-profit nursing homes through access to available and affordable professional liability insurance. In this regard, there will be a benefit from the anticipated correlation between a nursing home's implementation of the best practices for risk management and loss control and rates for professional liability insurance. Because good risk management practices generally contribute to better loss experience and premium stability, this may enhance market availability and eventually lower rates. Based on consultation with the Health and Human Services Commission and the nursing home task force appointed by the commissioner, there may be an increase in costs to those nursing homes which decide to implement the best practices for risk management and loss control, to the extent that these best practices are more extensive than the nursing home's current practices; however, it is important to note that the statute provides that these requirements are optional for the nursing homes and, further, any potential increase in costs to nursing homes that elect to implement these practices is due to the legislation and not a result of the administration of the rule. In any event, costs to the nursing home and professional liability insurance industries on a long term basis may actually be less to the extent that improved risk management and loss control may result in lower rates for professional liability insurance. Further, it is neither legal nor feasible to exempt small or micro-businesses from all or part of these rules considering the purpose of the statute under which the rules are to be adopted, namely to enhance the insurability of for-profit and not-for-profit nursing homes through access to available and affordable professional liability insurance.< /p>
To be considered, written comments on the proposal must be submitted no later than 5 p.m. on November 19, 2001, to Lynda H. Nesenholtz, General Counsel and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104. An additional copy of the comments must be submitted simultaneously to Marilyn Hamilton, Associate Commissioner, Property & Casualty, Mail Code 104-PC, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104.
The new sections are proposed pursuant to the Insurance Code Article 5.15-4 and §36.001. Article 5.15-4, as enacted by the 77th Legislature under SB 1839, requires the Commissioner of Insurance to adopt best practices for risk management and loss control that may be used by for-profit and not-for-profit nursing homes and further prescribes the consideration and use of such practices. Section 36.001 authorizes the Commissioner of Insurance to adopt rules for the conduct and execution of the duties and functions of the Texas Department of Insurance as authorized by statute.
The following statute is affected by the proposed sections: Insurance Code Article 5.15-4
§5.1740. Purpose and Scope. These sections implement Insurance Code Article 5.15-4, concerning best practices for risk management and loss control that may be used by for-profit and not-for-profit nursing homes. A nursing home's adoption and implementation of these best practices may be considered by an insurance company or the Texas Medical Liability Insurance Underwriting Association in determining the nursing home's rates for professional liability insurance. The best practices for risk management and loss control adopted pursuant to these sections do not establish standards of care for nursing homes applicable in a civil action against a nursing home. The elements identified in the risk management and loss control program are designed to be feasible for implementation by the typical nursing home and to lead to a reduction in exposure to loss causing incidents. The anticipated benefits of implementing these risk management practices are reductions in the number of claims and mitigation of the severity of claims that do occur. The establishment of a risk management and loss control program in a particular risk exposure area or areas does not supplant or replace any other nursing home initiative established to address quality assurance and assessment (whether statutorily mandated or otherwise), but instead supplements and supports it.
§5.1741. Best Practices for Risk Management and Loss Control.
(a) The Commissioner of Insurance establishes the following best practices for risk management and loss control that may be used by for-profit and not-for-profit nursing homes. The following elements are essential to a loss control program.
(1) Personnel Responsible for Program Operation. The nursing home should create an organizational structure that delegates authority to specific personnel for the day-to-day operation of a loss control program and which functions to ensure the program is established and implemented correctly. The nursing home can show it has met this element by:
(A) Appointing a program lead or leads to be responsible for the administration of the program in one or more exposure areas as identified in subsection (b) of this section. The designated program lead(s) should report to the administrator or the administrator's designee, such as the risk manager. The program lead(s) should have the authority to recommend and take immediate action upon observing a potential hazard, and this authority should be recognized in the program lead's job description. A program lead(s) should have available assistants and responsible parties to assist during off-hour periods.
(B) Appointing a Risk Management/Loss Control Committee.
(C) Appointing training instructors for new employees and in-service training.
(2) Loss Prevention/Mitigation. The nursing home should make a proactive effort to identify hazards and prevent losses before they occur. This element can be demonstrated by:
(A) Establishing and implementing policies and procedures to mitigate losses.
(i) Conducting ongoing analysis of actual and potential hazards in each individual exposure area. Policies and procedures should be created that will prevent situations that could give rise to an adverse event, which is defined as an occurrence that has the potential to produce a claim, including a minor event or situation with accident causing potential.
(ii) Conducting ongoing assessment to identify residents that may be susceptible to events occurring in each exposure area.
(iii) Establishing facility maintenance and inspection procedures that allow for preventive maintenance and inspections to be conducted on a regularly scheduled basis, such as daily, weekly, or otherwise.
(B) Establishing and implementing policies and procedures for responding to an adverse event.
(i) Establishing policies and procedures that allow for the family and/or guardian to be informed as soon as possible in the event of injury.
(ii) Including documentation in the resident's or other appropriate record by noting interventions, injury, and prevention measures, and filing an adverse event report with the program lead(s).
(C) Establishing and implementing policies and procedures for conducting an investigation of an adverse event. The investigator will document the event and recommend prevention efforts for the resident and report the recommendation(s) to the Risk Management/Loss Control Committee and any other committee responsible for quality assurance and assessment.
(D) Establishing and implementing policies and procedures for training.
(i) Establishing a policy to orient new residents and families to the facility and to each exposure area prevention program.
(ii) Establishing a training program for new hires and conducting periodic in-service training to refresh and supply new information gathered through the risk management/loss control tracking and trending process.
(3) Documentation. The nursing home should ensure that proper documentation occurs which serves as evidence of a functioning program and also establishes a record of quality of care.
(A) The Risk Management/Loss Control Committee should record minutes of meetings and document any actions recommended or taken by the committee or a program lead(s).
(B) Inspection/safety reports should be sent to the respective program lead(s) and the facility manager.
(C) All individual and in-service training should be documented.
(D) Individual resident or other appropriate records, such as a resident care plan, should be documented.
(E) Adverse events should be recorded as well as a follow-up in risk management program records.
(4) Monitor Results. The nursing home should monitor the results of the risk management and loss control program to evaluate the effectiveness and overall performance of the program. Monitoring allows identification of problem areas that are not producing desired results and can be demonstrated by:
(A) Tracking adverse events and near adverse events.
(B) Documenting the adverse events and near adverse events through the event response and investigation reports.
(C) Employing tracking methods through charting frequency, location of events by facility area, and by category of event.
(D) Using the tracking process to identify trends in problem areas for correction.
(5) Modify and Improve the Risk Management/Loss Control Program Based on Results. The nursing home should modify and improve the program based on monitoring to achieve loss control objectives of the program. This element can be demonstrated by:
(A) Developing and implementing procedures for reporting risk management and loss control improvement suggestions to the Risk Management/Loss Control Committee and any other committee responsible for quality assurance and assessment.
(B) Developing and implementing policies and procedures for examining the event tracking and correction process for improvements in accuracy and utility.
(b) A nursing home's adoption and implementation of the best practices for risk management and loss control should focus on the following risk exposure areas, which are exposure areas that appear often in claim lists and claim prevention materials published by leading nursing home insurers, and any additional areas as may be determined to be risk exposures. The list is not inclusive and the descriptions are illustrative only, but a nursing home focusing initially in these areas may be more likely to succeed with its program.
(1) Falls - Slips and trips by a resident in or about a nursing home.
(2) Resident Abuse - Infliction of injury or mistreatment with resulting physical harm or mental anguish.
(3) Pressure Ulcers - A clinical risk, also referred to as bedsores or decubitus ulcers, that is a result of unrelieved pressure on a part of the body.
(4) Nutrition and Hydration - Providing adequate and nutritious food and liquid to nursing home residents, including attention to special dietary needs.
(5) Medication Management - Prevention of drug-related problems including but not limited to over- or under-prescribing; improper drug selection; and over-dosage.
(6) Restraints [if used] - Physical restraints such as manual methods or physical devices that restrict freedom of movement or access to a resident's body. Chemical restraints can be described as psychotropic or behavior modifying drugs used to prevent a resident from exhibiting behavioral symptoms.
(7) Infection Control - Preventing, containing, and treating infections within a nursing home facility.
(8) Burns and Scalds - Injury due to exposure to heat, sun, or chemicals.
(9) Elopement - To slip away or run away from a facility. For risk management purposes this includes wandering or movement away from the usual or normal place within the nursing home facility.