Risk Management

Call early, call often: Benefits of proactive incident reporting


PAUL WEBER, JD, VP, OMIC Risk Management/Legal, and MICHELLE PINEDA, MBA, OMIC Risk Management Specialist

OMIC handles hundreds of claims and lawsuits every year. However, many insureds are unaware of the additional benefits and services beyond claims handling that OMIC provides to policyholders and their staff. Over the past five years, OMIC has spent more than $1.8 million to help insureds proactively manage a myriad of sensitive, complex liability issues that were not malpractice claims. This Digest reviews some of these events and the value of calling OMIC early and often when they occur.

Reports to claims department

In 2014, OMIC’s claims department received over 600 reports from insureds. Of these, 201 were claims graph claims
(written demands for money) and lawsuits, and the rest were incident and miscellaneous reports (see graph). Most of the 415 incident and miscellaneous reports were what OMIC considers “potential claims,” events that may result in an actual claim or lawsuit. Such events include oral demands for money or services, medical records requests, adverse outcomes resulting from patient treatment, and other signs the patient may be dissatisfied with treatment. An early call to OMIC’s claims staff starts the process of coverage for a potential claim. Staff will provide guidance on steps to take to minimize the impact of the incident. Some incident and miscellaneous reports don’t fall clearly into the potential claim category. As illustrated in the case study that follows, these matters may arise in an unusual manner and require significant claims and legal assistance before they are resolved.

OMIC insureds are encouraged to contact the claims department whenever they are requested to give their deposition in a malpractice claim so OMIC can determine whether counsel should be assigned. Generally, they are simply being deposed as a “fact witness,” someone who was a treating physician or consultant in the plaintiff’s care. In these cases, OMIC may assign counsel to make sure the insured’s testimony is limited to “facts” and does not include conjecture.

In May 2013, an insured contacted the OMIC claims department thinking he was going to be deposed simply as a fact witness (consulting doctor) in a lawsuit against another physician and a hospital. The plaintiff had undergone gastric bypass surgery. In the weeks following the surgery, the plaintiff was seen at the emergency department several times for nausea and vomiting. During one of these visits, the patient complained of blurry vision, confusion, low energy, and cognitive problems and was admitted to the hospital for further examination. The patient’s gastric bypass surgeon and an internal medicine physician were supervising her care, and the OMIC insured was called to consult on the vision problems. The ophthalmologist felt the patient’s blurry vision could be caused by a thiamine (B1) deficiency. As another physician had already ordered B1 and B6 testing, the ophthalmologist felt his consult report properly communicated his concern to the team of doctors caring for this patient. Unfortunately, none of the treating physicians reviewed the B1 test results, and about five days after the ophthalmology consult, the patient went into a catatonic state and was transferred to a psychiatric hospital. It was only then that the B vitamin test results were interpreted and the patient was noted to be suffering from an extremely low vitamin B1 level. She was diagnosed with Wernicke-Korsakoff syndrome and given thiamine to treat the condition. The lawsuit against the surgeon and internist alleged delayed/missed diagnosis and failure to treat, which caused neurological injuries and permanent irreversible brain damage.

OMIC’s claims staff reviewed the notice of deposition and contacted local defense counsel, who determined that the plaintiff attorney might name the insured in the lawsuit. State law allowed the plaintiff six months after the notice of deposition to add defendants. The OMIC defense attorney carefully prepared the insured for his deposition, with the assumption that the insured might be named as a defendant. Accordingly, the attorney attended the depositions of other parties and witnesses to prepare to defend the insured if needed. During the deposition, the plaintiff attorney asked probing questions of the insured’s care, suggesting there should have been better follow-up. The plaintiff attorney also tried to get the insured to criticize the care of the defendants. Fortunately, the insured was well prepared, confidently explaining his own care without giving damaging testimony against the other providers. The OMIC insured was never named as a defendant. His call for deposition assistance limited his role in the lawsuit, ultimately protecting him and keeping OMIC’s costs to $10,000.

Reports to risk management

The risk management hotline is one of the most utilized and valued services that OMIC provides to its insureds. graph RMIn 2014, 1,960 insureds and their staff called the hotline (see graph). Over half of the calls had to do with general risk management issues, such as documentation and record keeping, informed consent, HIPAA privacy, and proper advertising. Calls about “difficult patients” were less frequent (116 reports) but were often challenging and time consuming because many aspects of care needed to be discussed, including the patient’s clinical and mental status, comorbidities, and payment issues. OMIC risk management staff work with the insured to craft an approach that resolves difficult patient situations so they do not escalate into claims.

Like the claims department, the OMIC risk management department also receives incident reports about adverse outcomes that may eventually become claims. In 2014, the risk management department received over 580 incident reports, approximately one-third of all calls to the hotline. Reports of incidents to the OMIC claims and risk management departments differ in important respects. First, all matters reported to the OMIC risk management department are kept strictly confidential; they are not shared with the underwriting or claims departments without the insured’s explicit permission. As a result, coverage is not triggered when an incident is first discussed with the risk management department, but insureds are encouraged to contact the claims department if the incident seems likely to result in a claim. At times, the best approach to managing an incident is to have risk management and claims work collaboratively with the insured, as the following case study demonstrates.

Last year, an insured called the risk management department to report a cluster of endophthalmitis cases in his retina practice. He believed the cluster arose from contaminated Avastin he had purchased from a compounding pharmacy in his state. On a Monday, Tuesday, and Wednesday, the insured had injected 46 patients with the same lot of 70 syringes repackaged by the compounding pharmacy three weeks earlier. By Thursday of that week, four patients injected on Monday returned to his office with endophthalmitis. All four were immediately taken to surgery, tapped, and injected with antibiotics.

The insured contacted the compounding pharmacy that same day and reported his strong suspicion that the Avastin was contaminated. He also spoke to OMIC’s risk management department and was advised to sequester the remaining vials of Avastin and to contact the state health department, the Centers for Disease Control, and the Food and Drug Administration.

Not knowing how many other patients might have been affected or the exact cause of the endophthalmitis, the insured contacted all patients treated for age-related macular degeneration that week, including those who received Lucentis or Eyelea instead of Avastin. The insured had to cancel all his regularly scheduled patients over the next few days and worked over the weekend and into the middle of the following week in order to examine all the patients he had injected. As a precautionary measure, he prophylactically administered Vancomycin to all patients who had had intravitreal Avastin injections. Fortunately, no other patients developed endophthalmitis.

With the permission of the insured, OMIC’s claims department got involved and assigned a defense attorney. The defense attorney learned that an ophthalmologist from another state had reported a case of endophthalmitis from Avastin, bringing the total number of cases to five. The Avastin had come from the same compounding pharmacy and had been repackaged on the same day as the lot of syringes used by the OMIC insured. The pathology results from all five cases showed the same variant of streptococci.

To ensure that other ophthalmologists were notified, the insured and OMIC staff contacted the American Academy of Ophthalmology and the American Society of Retina Surgeons. The FDA, which had already been informed, issued a MedWatch Alert announcing a “voluntary recall” by the compounding pharmacy. In the recall, the FDA stated that syringes had been distributed to ophthalmic practices in Georgia, Louisiana, South Carolina, and Indiana. MedWatch advised ophthalmologists to immediately stop using lots of the recalled Avastin and to report any reactions or quality problems.

The story was picked up by the media. ABC online news compared these cases to the fungal infections following injection of contaminated medications from New England Compounding Center and similar prior endophthalmitis clusters that led to blindness after injection of compounded Avastin. ABC quoted the owner of the compounding pharmacy as stating: “We don’t know if the problem is with the vial from Genentech, our in-house procedures, or the physician’s office.”

The OMIC insured was contacted by a New York Times reporter for an interview. OMIC staff and defense counsel advised him not to talk with the media as this might compromise patient privacy and hamper the investigations being conducted by the FDA and state health department. The health department inspected the insured’s office the week following the outbreak and reviewed medical records for all patients who had received intravitreal injections during the at-risk period. The review was aimed at identifying risk factors for infection and evaluating office infection prevention practices. Inspectors found no deficiencies in injection technique or medication storage and handling at the insured’s office; however, they did identify multiple deficiencies at the compounding pharmacy in its repackaging process and determined that it had not complied with United States Pharmacopeial Chapter 797 (USP 797) standards for compounding or with recommended best practices for compounding Avastin.

With the assistance of retina specialists at a local university, the insured continued to care for the patients affected by endophthalmitis. The patients made no mention to the insured of filing a claim or lawsuit. Nonetheless, within a few weeks of the incident, the insured received a request for medical records from a well known plaintiff attorney representing three of the four patients who had developed endophthalmitis. Several months later, the plaintiff attorney called the insured’s office and requested an interview. The insured immediately contacted OMIC and the defense attorney who had already been assisting him. The defense attorney advised the plaintiff attorney that he was representing the insured and that all further contact with the insured should be through his office. The plaintiff attorney assured the defense attorney that the only target of the claim was the compounding pharmacy. Despite these assurances, defense counsel was concerned that any information revealed during such an interview could later be used against the insured in a lawsuit. As a general rule, OMIC and defense attorneys advise against informal interviews with plaintiff attorneys. In this case, OMIC claims staff and the attorney decided to allow the interview as long as the defense attorney was present to monitor the line of questioning and terminate the interview if it appeared necessary. Moreover, counsel felt the insured had handled the cluster of endophthalmitis cases in an exemplary manner, exercising good judgment in his quick identification and treatment of patients and notification of regulatory agencies. The interview with the plaintiff attorney was uneventful.

By promptly calling OMIC after identifying the cluster of endophthalmitis cases, the insured was able to avail himself of assistance from both the risk management and claims departments. With their help, he handled the clinical crisis and notified governmental agencies and the ophthalmic community quickly and effectively. The attorney assigned by OMIC helped the insured deal with the compounding pharmacy’s representatives and the patients’ attorney. While most incidents reported to OMIC are not as complex as this matter, this situation highlights the ability of OMIC staff to quickly muster the resources to help manage a fast-breaking incident.


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