&. 
"OVICES' 
DEPARTMENT OF HEALTH  HUMAN SERVICES  Office of Inspector General 
:.t'''UG  Washington , D. C. 20201 
FEB I 7 
2005 
TO:  Dennis P. Wiliams, Ph. 
Deputy Administrator 
,ion 
Health Resources n Services A  nist
George Grob 4
FROM: 
Assistant I  ' r ene 
for EValuation and I pections 
SUBJECT:  OIG Final Report: Ris Management at Health Centers (OEI-01-03-00050) 
Attached is a final inspection report providing perspectives of community health center offcials 
regarding risk management practices and the challenges health centers experience in conducting 
them. 
Broadly defined, risk management includes any activity, process, or policy to reduce liability 
exposure. From both a patient safety and a financial perspective, it is vital that health centers 
conduct risk management activities aimed at preventing harm to patients and reducing medical 
malpractice claims. In fiscal year 2003, a total of 240 medical malpractice claims (seeking $1.4 
bilion in damages) were brought against health centers that are covered under the Federal Tort 
Claims Act. The Health Resources and Services Administration (HRSA) paid $22.7 milion for 
65 claims against these health centers. 
To learn more about risk management at health centers, we identified 16 risk management 
practices and sureyed health center grantees to learn about their experiences with them and to 
obtain their assessment and advice about them. Respondents selected credentialing, quality 
improvement, comprehensive medical records, and clear communication with patients as the 
most important risk management activities. They identified training, patient tracking, and peer 
review as the most difficult to do and indicated that inadequate financial resources, staffng, and 
training are the key challenges to conducting risk management. 
We are providing this information solely for your use in addressing these challenges. HRSA' 
positive response to the report reflects its commitment to improving risk management for health 
centers. If you have any questions about this report, please do not hesitate to call me or one of 
your staff may contact Elise Stein, Director, Public Health and Human Services Branch, at 
(202) 619-2686 or through e-mail (Elise.Stein  oig.hhs.gov). To facilitate identification, please 
refer to report number OEI-01-03-00050 in all correspondence. 
Attachment  Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

R M
ISK  ANAGEMENT AT

H C
EALTH  ENTERS

Inspector General 
February 2005 
OEI-01-03-00050  Office of Inspector General 

http://oig.hhs.gov 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, 
as amended, is to protect the integrity of the Department of Health and Human Services 
(HHS) programs, as well as the health and welfare of beneficiaries served by those 
programs. This statutory mission is carried out through a nationwide network of audits, 
investigations, and inspections conducted by the following operating components: 
Office of Audit Services 
The OIG's Office of Audit Services (OAS) provides all auditing services for HHS, either by 
conducting audits with its own audit resources or by overseeing audit work done by others. 
Audits examine the performance of HHS programs and/or its grantees and contractors 
in carrying out their respective responsibilities and are intended to provide independent 
assessments of HHS programs and operations in order to reduce waste, abuse, and 
mismanagement and to promote economy and efficiency throughout the department. 
Office of Evaluation and Inspections 
The OIG's Office of Evaluation and Inspections (OEI) conducts short-term management 
and program evaluations (called inspections) that focus on issues of concern to the 
department, the Congress, and the public. The findings and recommendations contained 
in the inspections reports generate rapid, accurate, and up-to-date information on the 
efficiency, vulnerability, and effectiveness of departmental programs.  The OEI also 
oversees State Medicaid fraud control units, which investigate and prosecute fraud and 
patient abuse in the Medicaid program. 
Office of Investigations
The OIG's Office of Investigations (OI) conducts criminal, civil, and administrative 
investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries 
and of unjust enrichment by providers. The investigative efforts of OI lead to criminal 
convictions, administrative sanctions, or civil monetary penalties. 
Office of Counsel to the Inspector General 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to 
OIG, rendering advice and opinions on HHS programs and operations and providing all 
legal support in OIG's internal operations. The OCIG imposes program exclusions and 
civil monetary penalties on health care providers and litigates those actions within the 
department. The OCIG also represents OIG in the global settlement of cases arising 
under the Civil False Claims Act, develops and monitors corporate integrity agreements, 
develops compliance program guidances, renders advisory opinions on OIG sanctions to 
the health care community, and issues fraud alerts and other industry guidance.    E X E C U T I V E   S U M M A R Y
OBJECTIVE 
To obtain health center grantees perspectives regarding the relative 
importance of certain risk management practices and to identify any 
challenges or promising approaches regarding those practices. 
BACKGROUND 
The Health Resources and Services Administration (HRSA) awards 
grants to health centers to improve the health status of underserved 
populations. In fiscal year (FY) 2003, HRSA received $1.5 billion to 
fund 890 health center grants.  These health centers served 12.4 million 
patients. In FY 2002, the President began a 5-year initiative to expand 
the health center program.  This initiative is expected to add 1,200 new 
health center delivery sites and to increase the number of patients 
served in these sites to 16 million.  
Broadly defined, risk management includes any activity, process, or 
policy to reduce liability exposure. From both a patient safety and a 
financial perspective, it is vital that health centers conduct risk 
management activities aimed at preventing harm to patients and 
reducing medical malpractice claims.  Health centers treat a wide 
variety of conditions, including diabetes, asthma, hypertension, and 
cardiovascular diseases, which makes it imperative for health centers to 
ensure that their patients receive the highest level of care.  Many health 
centers also provide obstetric care, a high-risk area.   
From a financial perspective, HRSA has a particular interest in deemed 
health centers. Deemed health centers, which make up the majority of 
health centers, are those covered under the Federal Tort Claims Act for 
the purposes of medical malpractice. Therefore, they do not have to 
purchase private malpractice insurance.  This results in savings for the 
health centers. HRSA is financially responsible for any payments or 
settlements arising from claims against these centers.  In FY 2003, 240 
medical malpractice claims were brought against deemed health 
centers, seeking $1.4 billion in damages. 
Through document reviews and interviews, we identified 16 risk 
management practices that health centers are likely to conduct.  These 
16 practices included maintaining comprehensive medical records, 
credentialing, and conducting peer review. We surveyed a random 
sample of 248 health center grantees to learn about their experiences 
and to obtain their assessment and advice.  We received a 71 percent 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  i  E X E C U T I V E   S U M M A R Y  
response rate.  To ensure that our results covered a broad spectrum of 
health centers, we stratified the sample by the number of patients 
served at health centers.  However, the data in this report are not 
weighted and, therefore, we cannot make any statistical projections to 
the entire population of health centers.  All data are self-reported and 
are not verified.  The survey was anonymous with the intent to reduce 
bias in our survey results.   
SURVEY RESULTS 
Health center respondents selected credentialing, quality improvement, 
comprehensive medical records, and clear communication with patients 
as the most important risk management activities. We asked health 
centers to select the three most important risk management practices 
for reducing medical malpractice claims and ensuring patient safety. 
The risk management practice cited most often was credentialing     
(51 percent of respondents cited it as one of the three).  The second 
practice cited most often was quality improvement (42 percent), the 
third was comprehensive medical records (41 percent), and the fourth 
was clear communication with patients (38 percent).  
On a separate survey question, respondents indicated that all 16 risk 
management practices were important.  Respondents varied little in 
their assessment of how important each practice was.  Between 92 and 
100 percent of respondents indicated that each practice was either very 
or somewhat important. 
Respondents selected training, patient tracking, and peer review as the 
three most difficult risk management practices to conduct.  We asked 
health centers to select the three most difficult risk management 
practices to conduct.  Forty-eight percent responded that regular staff 
training was one of the three most difficult risk management activities 
to implement. Forty-two percent selected patient tracking mechanisms, 
and 32 percent selected peer review. 
Inadequate financial resources, staffing, and training were seen as key 
challenges to conducting risk management. Eighty-four percent of 
respondents cited lack of financial resources for risk management as a 
major or moderate challenge, 83 percent cited lack of a dedicated full-
time equivalent staff person for risk management, and 64 percent cited 
lack of training. 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  ii  E N C Y
RESPONDENT COMMENTS
Twenty-five percent of respondents offered their suggestions about
promising or innovative approaches for risk management and
39 percent of respondents offered recommendations to HRSA. In the
report we include highlights from these responses, as they may be
useful to HRSA.
OPPORTUNITIES FOR IMPROVEMENT
The fundamental challenge that respondents experienced in
conducting risk management was the lack of financial resources. This
has implications for training, staffng, and other risk management
activities. HRSA may want to ensure that all health centers are
adequately investing in risk management. In particular, HRSA may
want to determine the amount of savings deemed health centers
realize from being deemed and ensure that they are reinvesting some
portion of their savings into risk management.
In addition, HRSA may want to consider developing a comprehensive
ongoing training agenda on risk management for health centers. HRSA
may also want to explore creative, inexpensive ways to assist health
centers, such as disseminating best practices or a newsletter, developing
tool kits that contain sample policies and procedures, and encouraging
health centers to participate in regional networks for sharing
information and resources about risk management.
AGENCY COMMENTS
HRSA responded positively to the report and its comments reflect its
commitment to improving risk management for health centers. It has
established a new goal that by 2010, 100 percent of health centers wil
participate in risk management training. HRSA plans to achieve this
goal by holding risk management workshops and by developing a
comprehensive training agenda. For HRSA's complete response, see
Appendix C attached to the main body of the report.
OEI.01-03.00050 RISK MANAGEMENT AT HEALTH CENTERS 111 
 T A  B L E   O F   C O N T E N T S  
E X E C U T I V E S U M M A R Y ....................................................i 

I N T R O D U C T I O N ............................................................. 1 

P R I M E R  O N  R I S K  M A N A G E M E N T .................................... 7 

SURVEY RESULTS ......................................................... 9 

Most important risk management practices .......................... 9 

Most difficult risk management practices to conduct ...............12 

Challenges to risk management ......................................14 

RESPONDENT COMMENTS .............................................19 

Promising approaches .................................................19 

Respondents recommendations to HRSA ............................22 

O P P O R T U N IT IE S F O R  IM P R O V E M E N T ............................24 

A G E N C Y C O M M E N T S .....................................................26 

A P P E N D I X E S ................................................................30 

Appendix A:  Methodology.............................................30 

Appendix B:  Additional analysis by size of respondents ...........36 

A C K NO  WL  E D G M E N T S  ....................................................38 

E N D N O T E S ...................................................................39
 OBJECTIVE
To obtain health center grantees' perspectives regarding the relative
importance of certain risk management practices and to identify any
challenges or promising approaches regarding those practices.
BACKGROUND
The Health Resources and Services Administration 
(HRSA), within the
Department of Health and Human Services, awards grants to a variety
of health centers, including community health centers, migrant health
centers, and public housing primary care centers) Each of these health
centers addresses the needs of a specific population and is designed to
increase access to primary health care services and to improve the
health status of underserved populations.
In fiscal year (FY) 2003, HRSA received $1.5 billion to support
890 health center grants. These funds supported general operating
expenses and patient services. The health centers encompassed about
600 health care delivery sites and served 12.4 millon people. They
employed about 7 800 physicians and dentists and 70 000 other health
care practitioners and administrative staff. Also in FY 2003, health
centers received an estimated $2.1 billion from Medicaid and an
estimated $327 milion from Medicare.
The Importance of Risk Management
Broadly defined, risk management includes any activity, process, or
policy to reduce liability exposure. This involves all aspects of a health
centers infrastructure and services, including financial matters, facility
maintenance, fire safety, compliance with applicable laws and
regulations, and clinical care. However, for the purposes of this report
we limit the meaning of risk management to activities aimed at
reducing medical malpractice claims and ensuring patient safety
(protecting patients from harm).
Health centers conduct a wide array of activities to reduce medical
malpractice claims, such as credentialing and privileging health care
practitioners, using clinical protocols, and maintaining medical records.
These activities are critical for several reasons, which we elaborate on
in this section.
Health centers treat a wide variety of
Ensuring patient safety. 
conditions, including diabetes, asthma, hypertension, and
OEI.01.03-00050 RISK MANAGEMENT AT HEALTH CENTERS I N T R O D U C T I O N  
cardiovascular diseases, which makes it imperative for health centers to 
ensure that patients receive the appropriate level of care.  Many health 
centers also provide obstetric care, a high-risk area, which further 
underscores the importance of risk management.   
Medical malpractice claims demonstrate the significance of potential 
problems that can occur in health centers.  Medical malpractice claims 
filed in 2003 cover a broad range of conditions and severity. Examples 
of some more serious claims included the following allegations:  failure 
to diagnose asthma, improper prescription of diabetes medication, 
failure to treat elevated blood pressure, and failure to diagnose and 
treat congestive heart failure and myocardial infarction.  In addition, 
there were claims related to obstetric care, which included the following 
allegations:  failure to remove gauze during delivery; negligent prenatal 
care, labor, and delivery; and failure to diagnose and treat an ectopic 
pregnancy. Although these claims have not yet been finally resolved or 
determined to have merit, they illustrate the nature of some of the more 
serious potential problems. 
Costs associated with medical malpractice claims.  To cover financial 
losses due to medical malpractice claims, health centers can either 
obtain coverage at no cost to the health center under the Federal Tort 
Claims Act or purchase medical malpractice insurance from a private 
company. 2 
Health centers that elect to be covered under the Federal Tort Claims 
Act are referred to as deemed health centers.3  Eligible health centers 
include migrant health centers, community health centers, health care 
for the homeless grantees, school-based health centers, and health 
services for public housing residents grantees. In FY 2003, 680 health 
centers were deemed (about 80 percent).  The primary reason health 
centers choose this option is the savings they realize by not having to 
purchase private medical malpractice insurance.4 
HRSA is financially responsible for any payments or losses arising from 
medical malpractice claims against deemed health centers. Since 
deeming began in 1992, 345 health centers have incurred claims against 
them.  Of these, 40 percent had 1 claim, 18 percent had 2 claims, and 
the remainder had 3 or more claims.  
In FY 2003, 240 medical malpractice claims were brought against 
deemed health centers, seeking $1.4 billion in damages. There is a 
considerable difference in the amount claimants seek and the actual 
amount HRSA pays out.  Historically, the median amount demanded by 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  2  I N T R O D U C T I O N  
claimants was $1.5 million, whereas the median amount paid out by 
HRSA was $125,000.  In FY 2003, HRSA paid $22.7 million for 
65 claims against these health centers.  (These paid claims were not 
necessarily filed in FY 2003.) 
HRSA covers claim payments out of its Health Center Tort Claims 
Fund. HRSA has raised concerns about the financial viability of this 
fund as the health center program expands.  HRSAs FY 2003 budget 
justification stated: 
. . . FTCA [Federal Tort Claims Act] payments for settled 
claims are expected to increase as a result of increases in the 
number of covered health centers, health center physicians, 
and patients, as well as, the overall upward trend in 
judgments and settlements being experienced in the medical 
malpractice marketplace.  In addition, a number of insurance 
companies are dropping malpractice coverage because of 
substantial losses in providing malpractice insurance. 
In FY 2004, HRSA received $45 million in appropriations for this fund.5 
The Presidents budget for FY 2005 requests $45 million. 
In the cases in which a health center opts to purchase private 
insurance, the insurer is financially responsible for any payments or 
losses arising from medical malpractice claims against the center.  To 
reduce liability, the private insurer typically provides the health center 
with a risk management assessment, training, and technical assistance. 
Nondeemed health centers may choose to purchase private insurance 
because they can afford the premiums and want to benefit from the risk 
management services provided by the private insurer. 
Expansion of the program. In FY 2003, health centers served 
12.4 million patients.  This number is expected to increase as the 
program expands, thereby exposing HRSA to greater liability. In 
FY 2002, the President began a 5-year initiative to expand the health 
center program. This initiative is expected to add 1,200 new health 
center delivery sites and to increase the number of patients served in all 
sites to 16 million.  The Presidents FY 2005 budget requests the third 
year of funding for this initiative, seeking $1.8 billion for the health 
center program.  With these funds it is expected that by the end of FY 
2005 the total number of health center delivery sites will be 3,800. 
Past program vulnerabilities.  A 1997 U.S. Government Accountability 
Office report raised concerns about the risk management services that 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  3  I N T R O D U C T I O N  
HRSA intended to provide health centers at that time.6 Specifically, it 
found that HRSA was providing limited risk management services to 
deemed health centers. At the time this report was issued, the Federal 
Tort Claims Act option for health centers had only been in place for a 
few years. Health centers and HRSA both had little experience with 
deeming.  Since that time HRSA has taken steps to provide health 
centers with additional risk management services.  Still, it is timely to 
reexamine these issues given that 7 years have passed. 
Health Center Requirements for Risk Management 
HRSAs regulations and policies require all health centers to conduct 
certain risk management activities.  These activities include 
implementing a quality assurance program, performing credentialing 
and privileging for certain health care providers, and developing risk 
management policies and procedures, among others.  (See the primer on 
page 7 for a list of risk management activities HRSA requires.) 
In addition to these requirements, deemed health centers must adhere 
to two additional requirements.  First, the statute requires deemed 
health centers to cooperate with the Department of Justice in providing 
information related to medical malpractice claims.7 
Second, HRSAs policy requires a portion of the savings deemed health 
centers realize to be reinvested in risk management.  The policy 
specifically states that HRSA . . . expects as health centers begin to 
realize savings in malpractice insurance costs due to coverage under the 
Federal Tort Claims Act, centers will reinvest some of the savings to 
target malpractice risk reduction.8  However, the same policy may 
cause some confusion about this requirement, because it also states that 
the savings can be used for anyactivity within the scope of the grant. 
Specifically, it states: 
For example, these funds may be used to increase the number 
of users, increase the range of services provided . . . or to 
implement administrative improvements (including clinical 
compensation, clinical quality improvement/risk management 
activities). 
HRSA monitors risk management at all health centers in two key ways: 
grant applications and onsite reviews.  The grant application and, when 
applicable, the deeming application provide information about relevant 
aspects of a health centers risk management program.  The grant 
application also requires health centers to describe their quality 
assurance and risk management practices.  The deeming application 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  4  II NN TT RR OO DD
 UU CC TT II OO NN
requires health centers to certify that they have certain risk 
management practices in place, such as credentialing and privileging. 
In terms of onsite reviews, HRSA previously relied on its Primary Care 
Effectiveness Reviews, which were onsite performance reviews that 
health centers received about once every 5 years. These reviews 
included specific questions examining centers risk management 
practices. However, HRSA no longer performs these reviews. 
HRSA has developed a new performance assessment protocol for all its 
grantees, including health centers. This new protocol is currently being 
implemented and will likely include performance measures related to 
risk management. 
Health centers that are accredited by the Joint Commission on 
Accreditation of Healthcare Organizations (referred to throughout the 
report as the Joint Commission) must adhere to its standards for 
ambulatory health care programs, which include numerous 
requirements relevant to risk management.9 For example, these 
standards require credentialing and privileging of providers and 
internal monitoring of adverse events, among others. In 1997, HRSA 
began an initiative to encourage health centers to seek accreditation. 
As of 2003, 290 health centers (about 33 percent) had received 
accreditation from the Joint Commission. 
METHODOLOGY 
This inspection is based on a document review, stakeholder interviews, 
and a survey of health center grantees. All the data presented in this 
report are self-reported and are not verified. To reduce bias in the 
responses, we administered the survey anonymously. For a detailed 
description of our methodology, see Appendix A. 
To improve our understanding of risk management we reviewed 
documents and interviewed various stakeholders (e.g., the National 
Association of Community Health Centers, primary care associations, 
and selected health centers). Based on these sources, we identified 16 
risk management practices that health centers are likely to conduct 
(some of which are required). See the primer on page 7 for a complete 
list and description of these 16 practices, including which are required. 
We used these 16 risk management practices as the basis for our survey 
questions. 
OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  5  I N T R O D U C T I O N  
We surveyed a random sample of 248 health center grantees out of  
835 grantees in FY 2002. To ensure that our results covered a broad 
spectrum of health centers, we stratified the sample by the number of 
patients served.  The sample included deemed and nondeemed and 
accredited and nonaccredited health centers. We received 175 replies to 
our survey, for a response rate of 71 percent.  Eighty-eight percent of 
respondents to the survey were deemed.  Because not all respondents 
answered every question, the actual number of respondents varies by 
question.  Therefore, throughout the report we provide percentages 
based on the actual number of respondents for each question. 
Data limitations 
Because the survey was anonymous and we obtained only self-reported 
estimates about the number of patients served in FY 2002, we were 
unable to determine which stratum each respondent fell into. As a 
result, we could not weight the data, nor could we calculate confidence 
intervals. Therefore, we cannot make statistical projections to the 
entire population of health centers based on the survey data.  The data 
presented in the report are simple frequencies of the responses.  We did 
not independently verify any statements health center grantees made 
on the survey.  Finally, we are unable to conduct a nonrespondent 
analysis because the survey was anonymous. Therefore, we cannot 
estimate the level of bias among respondents.  These limitations apply 
to all data analysis and comparisons presented in the report. 
Standards 
We conducted this inspection in accordance with the Quality Standards 
for Inspections issued by the Presidents Council on Integrity and 
Efficiency. 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  6  
 P R I M E R   O N   R I S K    M A N A G E M E N T
We identified 16 risk management practices that health centers are 
likely to conduct to reduce medical malpractice claims and ensure 
patient safety.  We identified these practices based on interviews with 
health centers, Federal officials, and other key stakeholders; a review of 
relevant statutes, regulations, and policies; and a review of pertinent 
literature regarding risk management in health care settings.  Ten of 
these 16 risk management practices are explicitly required either by 
statute or by HRSA regulation or policy (as designated by an asterisk).  
The Joint Commission requires all 16 of these practices. 
Active quality improvement program*: Internal efforts to improve the 
quality of care.  These efforts may include reviewing clinical outcome 
data and conducting long-term projects aimed at improving clinical care, 
among others. 
Appropriate use of clinical protocols*: Established guidelines for 
providing clinical care that health care practitioners use.  These 
guidelines may be developed by professional organizations or by the 
health centers clinical staff.  
Clear communication with patients*:  Patients have a voice in 
determining their care and receiving information about their care in a 
way that they can comprehend.  This includes providing translation 
services when necessary. 
Clear communication with providers:  Health care providers receive clear 
communication from the health centers leadership about their roles and 
responsibilities and they communicate clearly with one another. 
Comprehensive patient medical records*:  These records document the 
care provided to the patient at the health center.  They can be either 
paper or electronic. 
Credentialing of health care professionals*:  The process of verifying that 
health care providers meet all required educational and licensing 
requirements.  The health center or a third party may conduct this 
activity. 
Documentation of informed consent:  Patients are adequately informed 
about risks and benefits of their treatment.  
Formal patient grievance mechanism*:  A system to collect, analyze, and 
address complaints received from patients and/or staff.    
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  7  P R I M E R   O N   R I S K   M A N A G E M E N T  
Internal incident reporting system:  A system to collect and analyze 
information on adverse events that occur within the health center 
resulting from inappropriate care.  
Ongoing peer review of patient cases:  The review of medical records or 
patient cases by health care professionals, either within the health 
center or as outside consultants, to ensure that appropriate care was 
provided. 
Onsite assessment of risks and risk management practices:  A process to 
assess the potential risks of the health center and the health centers 
activities to reduce its risks.  This assessment can be done by the health 
center or by outside consultants. 
Patient tracking system:  A formal system, either electronic or paper, to 
ensure that key patient information, such as test results, missed 
appointments, and care at different health care institutions, is not 
overlooked. 
Privileging of health care professionals*:  The process of verifying, on a 
routine basis, that practitioners have the appropriate clinical 
competencies and the ability to perform clinical procedures effectively. 
Regular patient satisfaction survey*:  A survey to assess patient 
satisfaction with the level of service and clinical care that they received. 
Regular staff training on risk management*:  Staff receive either onsite or 
offsite training on topics related to risk management. 
Up-to-date policies and procedures on risk management*:  Written 
documents that explicitly describe a health centers operations and 
processes related to risk management.  
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  8  s u R V E Y S U L T S
While health center respondents indicated that We asked respondents to select the
risk management practices were three risk management practices
all 16 
they considered to be the most
important, they selected credentialing, quality
important for reducing medical
improvement, comprehensive medical records,
malpractice claims and ensuring
and clear communication with patients as the
patient safety. The range of
most important
responses among the 16 practices
varied from 3 to 51 percent. (See
Table 1,)
Table 1. The Level of Importnce of Risk Management Practices According to Respondents
Percentage of Respondent Percentage of Respondent
Who Selec the Practice Who Indica the Practce
as One of the Three Most Was Very or Somewat
Risk Management Practice Importnt Importnt
Creentialing of Health Care Professionals
Active Quality Improvement Program
Comprehensive Patient Meical Recrds 100
Clear Communication With Patients
Patient Tracking System
Ongoing Peer Review of Patient Cases
Intemallncident Reporting System
Appropriate Use of Clinical Protocols
Regular Staff Training on Risk Management*
Privileging of Health Care Professionals
Onsite Assessment of Risks and Risk Management Practice
Doumentation of Informed Consent
Formal Patient Grievance Mechanism
Regular Patient Satisfaction Survey
Clear Communication With Providers
Up-To-Date Polices/Procures on Risk Management*
Indicates risk management practices explicity required by statute or HRSA regulation or policy.
Source: Ofce of Evaluation and Inspeions' analysis of survey responses, 200.
OEI-01-03-00050 RISK MANAGEMENT AT HEALTH CENTERS S U R V E Y
   R E S U L T S  
Credentialing.  Credentialing is the process of verifying that a health 
care practitioner meets all required educational and licensing 
requirements; it is a requirement for all health centers.10  The health 
center or a third party may conduct this activity.  Respondents cited 
credentialing most often (51 percent) as one of the three most important 
risk management activities. 
The level of importance respondents attributed to credentialing may 
reflect the recent attention HRSA has given to this area. In 2001 and 
2002, HRSA issued policy information notices emphasizing the 
importance of credentialing and its expectations for health centers. 
HRSA expects health centers to review and verify their practitioners 
qualifications, including professional credentials, references, and claims 
history.11 
Respondents commented that credentialing is the foundation for risk 
management. It is essential that health centers have qualified staff to 
ensure safe and appropriate treatment of their patients.  One 
respondent summed it up by writing . . . the care you give can only be 
as good as the providers you hire. . . . Respondents also commented 
that credentialing is important from a liability perspective, as it 
documents that health centers carry out due diligence when hiring 
health care providers.  
Quality improvement programs.  Quality improvement programs, which 
are required by HRSA, include internal efforts to improve the quality of 
the clinical care, such as analyzing clinical outcome data.  Respondents 
cited quality improvement programs second most often (42 percent) as 
one of the three most important risk management activities. 
Respondents commented that quality improvement activities allowed 
them to identify areas needing improvement, thereby helping them to 
prevent future problems.  Respondents also commented that they 
conduct many of their risk management practices as part of their 
quality improvement program.  These programs serve as a way to 
integrate numerous risk management activities into one comprehensive 
program. Finally, respondents mentioned that quality improvement 
programs are important because they provide an objective means of 
measuring and monitoring their performance over time. 
Comprehensive patient medical records.  Medical records document the 
care provided to the patient at the health center, and HRSA requires 
them for all health centers.  The records can be either paper or 
electronic.  Respondents rated maintaining comprehensive patient 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  10  S U R V E Y
   R E S U L T S  
medical records third (41 percent) among the three most important risk 
management practices.  
Respondents cited several reasons they consider medical records to be 
important. First, when a malpractice claim is filed, medical records 
serve as a key piece of evidence in determining whether appropriate 
care was provided. Respondents indicated that malpractice claims can 
often be quickly dismissed if medical records demonstrate that 
appropriate care was provided.  One respondent wrote . . . if it isnt 
documented, it didnt occur.  Second, respondents pointed out that 
medical records play an important role in preventing errors, because 
they serve as a complete record of the patients care and assist the 
health care provider in making decisions about appropriate next steps.  
Medical records are especially important if multiple providers are 
working with a patient.  Finally, respondents commented that medical 
records can also be a rich source of information for quality improvement 
programs and peer review efforts. 
Clear communication with patients.  Clear communication with patients, 
which is also required by HRSA, involves making sure patients have a 
voice in determining their care and providing them with information 
about their care in a way they comprehend.  This includes providing 
translation services when necessary. Thirty-eight percent of 
respondents cited clear communication with patients as one of the three 
most important risk management practices.   
Respondents cited several reasons why clear communication with 
patients is critical.  One common theme among respondents was the 
opinion that, when patients understand their diagnosis and treatment, 
they are more likely to be compliant with their treatment regimen.  
Another common theme mentioned by several respondents was that 
patients who understand their treatment and are active participants 
are less likely to sue when something goes wrong.   
All 16 practices.  We asked respondents to give their opinion on the level 
of importance of each of the 16 risk management practices. 
Respondents varied little in their assessments. Between 92 and     
100 percent of respondents assessed each practice as either very or 
somewhat important. (See Table 1 on page 9.) 
Several respondents identified other important risk management 
practices in addition to the 16 we identified.  These included obtaining 
accreditation by the Joint Commission, monitoring medication usage, 
implementing appropriate procedures for infection control, assessing 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  11  S U R V E Y   R E S U L T S  
performance of clinical staff, and documenting telephone calls with 
patients. 
We asked respondents to select 
Respondents selected training, patient tracking, 
the three risk management 
and peer review as the three most difficult risk 
practices they considered to be the 
management practices to conduct  
most difficult to implement. (See 
Table 2.) 
 Table 2. Health Center Respondents' Self-Assessment of Their Performance for Risk Management 
Practices 
Percentage of Respondents 
Percentage of Respondents  Who Indicated They Were 
Who Selected the Practice as  Doing an Excellent or Good 
One of the Three Most  Job at Conducting the 
Risk Management Practice  Difficult to Conduct  Practice 
Regular Staff Training on Risk Management*  48  54 
Patient Tracking System  42  66 
Ongoing Peer Review of Patient Cases  32  70 
Onsite Assessment of Risks and Risk Management Practices  30  58 
Active Quality Improvement Programs*  26  87 
Up-to-Date Polices/Procedures on Risk Management*  21  70 
Comprehensive Patient Medical Records*  17  90 
Appropriate Use of Clinical Protocols*  14  82 
Credentialing of Health Care Professionals*  11  95 
Internal Incident Reporting Systems  10  84 
Clear Communication With Patients  8  93 
Privileging of Health Care Professionals*  7  86 
Clear Communication With Providers*  4  90 
Formal Patient Grievance Mechanism*  3  88 
Regular Patient Satisfaction Survey*  3  82 
Documentation of Informed Consent  1  89 
*Indicates risk management practices explicitly required by statute or HRSA regulation or policy.
Source: Office of Evaluation and Inspections' analysis of survey responses, 2004. 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  12  S U R V E Y   R E S U L T S

Training. Training, which is required by HRSA, can be provided either 
onsite or offsite and can address a wide array of topics related to risk 
management.  Respondents cited regular staff training most often 
(48 percent) as one of the three most difficult risk management 
activities to conduct.   
Among the reasons respondents cited were the lack of staff, money, and 
training materials. Training is often deferred to a later date, since 
providing care is perceived to be more important and staff time is 
limited. 
Patient tracking.  Patient tracking, which is not required by HRSA, is a 
formal system, either electronic or paper-based, used to ensure that key 
patient information is not overlooked.  Key information includes test 
results, missed appointments, and care at different health care 
institutions. Respondents ranked patient tracking second (42 percent) 
among the three most difficult activities to conduct.   
Respondents commonly cited the lack of information technology as a 
reason this activity is difficult to conduct.  Respondents also commented 
that even if they had the appropriate information technology, it would 
require time, which respondents reported is often in short supply, to 
input data and monitor the system.  Finally, respondents commented 
that some patients are homeless and/or transient, making followup 
difficult under any circumstances. 
Peer review. Peer review, also not required by HRSA, involves the 
review of medical records or patient cases by health care professionals, 
who are either within the health center or outside consultants, to 
ensure that appropriate care was provided.  Respondents ranked peer 
review third (32 percent) among the three most difficult activities to 
conduct. 
Respondents commented again that time and resources were an issue 
that made peer review difficult.  Several respondents mentioned that 
the staff view patient care as a higher priority and may be unwilling to 
spend time conducting peer review. In addition, several respondents 
mentioned that with a small staff, practitioners are often uncomfortable 
reviewing one another. In fact, some respondents indicated that they 
have only two to three staff per site.   
All 16 practices.  While 90 percent of respondents thought that, 
overall, they were doing an excellent or good job at conducting risk 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  13  SS UU RR VV EE YY    RR EE SS UU LL TT SS
management, the portion of respondents who felt they were doing 
either an excellent or good job for each of the 16 practices ranged from 
a low of 54 percent to a high of 95 percent. (See Table 2 on page 12.) 
For additional survey data on these assessments by the size of the 
respondents, see Table 10 in Appendix B.12 
Health center respondents indicated that  Respondents experienced 
several challenges that 
inadequate financial resources, staffing, and 
prevented them from doing all 
training are key challenges to conducting risk 
that they would like in terms of 
management 
risk management. In fact, 
40 percent of respondents indicated that there are risk management 
practices that they would like to conduct, but are currently unable to. 
These respondents mentioned additional training, onsite reviews, 
peer review, and patient tracking as activities they would like to 
conduct.13 
To better understand these challenges, we provided respondents with 
a list of potential challenges and asked them to indicate to what 
extent each hindered their ability to conduct effective risk 
management. 
For additional survey data on these challenges by the size of 
respondents, see Table 11 in Appendix B. 
Financial resources. Eighty-four percent of respondents selected lack of 
financial resources as a major or moderate challenge. Financial 
resources have consequences for staffing, training, and information 
technology, all of which affect a health centers ability to conduct risk 
management. 
Financial resources are a concern even for deemed respondents. 
Deemed health centers are covered under the Federal Tort Claims Act 
for the purposes of medical malpractice claims; therefore, they do not 
have to purchase comprehensive private malpractice insurance. This 
results in savings for the health center. Eighty-eight percent of 
respondents to the survey were deemed. Of those deemed respondents, 
83 percent reported that the lack of financial resources was a major or 
moderate challenge. Eighty-six percent of nondeemed respondents 
reported that the lack of financial resources was a major or moderate 
challenge. 
Still, 73 percent of deemed respondents indicated that being deemed 
had to a great or moderate extent improved their ability to conduct risk 
OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  14  S U R V E Y   R E S U L T S  
management.  This may be in part due to the savings from not having to 
purchase private malpractice insurance.  Deemed respondents reported 
saving $228,000 per year on average, with individual respondents 
saving between $7,500 and $2 million. 
However, only 47 percent of deemed respondents reported that they 
were using these savings, in whole or in part, for risk management 
practices.  Of those using these savings for risk management, common 
activities included hiring additional staff, conducting more staff 
training, implementing a quality improvement program, seeking 
accreditation, and hiring outside consultants.  
Twenty-two percent of deemed respondents indicated that they were 
not using these savings for risk management and 31 percent were 
unsure how they were using these savings.  HRSAs policy is unclear 
on how much of these savings should be used for risk management; 
HRSAs Policy Information Notice 1999-08 states: 
[HRSA] expects as health centers begin to realize savings in 
malpractice insurance costs due to coverage under the FTCA 
[Federal Tort Claims Act], centers will reinvest some of the 
savings to target malpractice risk reduction. 
This same policy states that health centers may use these savings for 
activities within the scope of the grant: 
For example, these funds may be used to increase the number 
of users, increase the range of services provided . . . or to 
implement administrative improvements (including clinical 
compensation, clinical quality improvement/risk management 
activities). 
It is important to point out that it is difficult for health centers, 
especially those that have been deemed for several years, to know how 
much they are actually saving per year.  HRSA does not require health 
centers to track their savings.  In fact, it would be difficult for them to 
do so, because it would require health centers to have an understanding 
of their local insurance markets so they could estimate the current cost 
of malpractice insurance. Health centers do provide HRSA with their 
annual budgets; however, not all risk management activities are easily 
accounted for in terms of financial expenditures, such as clear 
communication with patients and maintaining up-to-date policies and 
procedures.  
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  15  SS UU RR VV EE YY    RR EE SS UU LL TT SS
Staffing. Eighty-three percent reported that a lack of dedicated full-time 
equivalent staff for risk management was a major or moderate 
challenge. Only 19 percent of respondents reported that they have a 
dedicated staff position, either full- or part-time, for risk management. 
Instead, most respondents reported that they rely on their executive 
directors, compliance officers, physicians, and nurses to play key roles 
in risk management for the health center. However, these individuals 
are also busy managing other responsibilities and may have difficulty 
finding the time or obtaining the necessary expertise for risk 
management activities. This is especially the case for clinical staff: 
82 percent of respondents indicated that the lack of clinical staff time 
was a major or moderate challenge to conducting risk management. 
Training. Sixty-four percent of respondents indicated that training was 
a major or moderate challenge. Lack of training can affect the level of 
expertise among staff for risk management and, in fact, 64 percent 
responded that the lack of expertise among staff was a major or 
moderate challenge. 
Notwithstanding these challenges, 69 percent of respondents indicated 
that their staff received training on risk management in FY 2003. 
Fifty-three percent responded that their staff received training no less 
than once every few months, and 33 percent said their staff received 
training once a year. 
Respondents indicated that they received training from a variety of 
sources. Fifty-eight percent received training from their own staff, 
25 percent from State primary care associations, 30 percent from the 
National Association of Community Health Centers, and 27 percent 
from private insurance companies. 
HRSA also provides training to health centers. However, only 
13 percent of respondents reported that they received training from 
HRSA (including both regional and/or central office), even though HRSA 
provides several resources. (See Table 3 on page 17 for a complete list of 
HRSAs resources.) Respondents varied in how satisfied they were with 
the risk management resources HRSA provides. They appeared to be 
the most satisfied with HRSA policy information notices, the Federal 
Tort Claims Act helpline, and accreditation from the Joint Commission. 
(See Table 3 on page 17.) 
OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  16  S U R V E Y   R E S U L T S  
Notably, respondents reported that they had no experience with many 
HRSA resources. However, some of these resources were available only 
on a limited basis.  Nevertheless, nearly 45 percent reported that they 
had no experience with the publication Risk Management, published 
 Table 3. Health Center Respondents' Satisfaction with Risk Management Assistance from HRSA 
Percentage of  Percentage of 
Respondents Who  Respondents Who 
Indicated They Were  Indicated No 
Completely or Somewhat  Experience With the 
HRSA Resources  Satisfied  Resource 
HRSA's policy inform ation notice on credentialing and privileging (Policy 
79  6 
Inform ation Notice 2002-22) 
Federal Tort Claim s Act helpline (1-866-FTCA HELP)  78  28 
HRSA's program expectation (Policy Inform ation Notice 1998-23)  74  7 
Accreditation by the Joint Com m ission on Accreditation of Healthcare 
74  49 
organizations supported by HRSA 
HRSA's online resources (i.e., W eb site)  63  23 
National Association of Com m unity Health Centers' m alpractice risk 
59  36 
m anagem ent consultation line (1-888-800-3772), funded by HRSA 
Risk m anagem ent recom m endations provided by a review of  Federal 
Tort Claim s Act m edical m alpractice claim s by HRSA's Division of  58  46 
Clinical Quality (form erly the Center for Risk Managem ent)* 
Federal Tort Claim s Act claim s-related site visits initiated by HRSA's 
50  71 
Division of Clinical Quality (form erly the Center for Risk Managem ent)* 
HRSA's distribution of the publication, "Risk Managem ent," printed by 
48  45 
the Departm ent of Legal Medicine, Arm ed Forces Institute of Pathology 
Referral to appropriate risk m anagem ent resources by HRSA project 
46  49 
officer 
Incident reporting system (i.e., Doctor Quality)*  39  51
Note: The percentage of respondents who indicated that they were com pletely or som ewhat satisfied is out of those 
respondents who indicated they had experience with the resource. The percentage of respondents who indicated they 
had no experience with the resource is out of the total num ber of survey respondents. 
*Indicates that this service is available only on a limited basis. 
Source: Office of Evaluation and Inspections' analysis of survey responses, 2004. 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  17  S U R V E Y   R E S U L T S  
by the Armed Forces Institute of Pathology and distributed to all health 
centers by HRSA.  Thirty-six percent of respondents indicated no 
experience with the risk management telephone consultation line, 
which is also available to all health centers.  (See Table 3 on the 
previous page.) 
Even with these resources, 87 percent of respondents indicated that 
they would like to receive more training.  Topics for additional training 
included documentation, incident reporting, and patient records.  
Respondents also called for general or overall help in developing a risk 
management program. Several respondents were looking for a better 
understanding of the basics of a risk management program and how to 
implement such a program in their health center. 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  18    R E S P O N D E N T   C O M M E N T S
Twenty-five percent of 
Health center respondents identified promising 
respondents offered their 
approaches to conducting risk management 
suggestions about promising 
approaches.  Below are some 
highlights. 
Onsite Assessments 
o 	 Proactively doing self-assessments of some departments and 
processes. 
o 	 We do our own periodic environment of care walk throughs 
using the same tool as our State licensing auditors and the 
Joint Commission use. This keeps us on our toes. 
o 	 We started emergency room site visits by the key management 
during night duty hours.  Assessment of medical practices, 
billing procedures, medical supply, security of the building and 
equipment, patient satisfaction, and adherence with the 
organizational polices and procedures is performed during each 
visit. 
o 	 Daily emergency medical audit report. 
o 	 Monthly risk assessment walk throughs are conducted by our 
safety committee and are designed to integrate needs for many 
risk-surveillance areas:  infection control, emergency 
medication use, quality control log compliance, facility and the 
Office of Occupational Safety and Health Administration 
hazards, and others.  These findings are tracked through a 
larger performance improvement committee responsible for 
initiating followup activities where improvements or risk 
reduction is needed.  
o 	 We have implemented monthly safety audits at all sitesboth 
clinical and nonclinical.  Different staff members conduct the 
audit each month and report back to quality review 
management department. 
o 	 We requested from the general liability insurance company a 
loss control assessment.  It was performed during 2003.  
Recommendations were properly addressed. A followup visit 
and risk management conference was scheduled for March 
2004. 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  19  R	 E S P O N D E N T   C O M M E N T S  
Quality Improvement Programs  
o 	 Part of a Health Center Network, Council of Community 
clinics, that facilitates/coordinates/supports coordinated 
quality improvement programs. 
o 	 The rate of medication errors has [been] reduced due to having 
an additional pharmacist on board. The double checking of 
dispensing drugs has greatly reduced high volume area and 
enhanced quality control of dispensing the wrong medication to 
our patients. 
o 	 We are a large prenatal provider and we do 100 percent chart 
review on all prenatal charts at 28 weeks to ensure a GTT 
[glucose tolerance test] has been run and results documented.  
Lack of GTT and diagnosing gestational diabetes can lead to 
complications, which we want to avoid by making sure we do 
this test. 
o 	 Yearly review by life cycle and risk groups of preventive care 
guidelines and health maintenance issues promotes 
identification of problem areas and medical plan to address the 
problem. 
Incident Reporting 
o 	 We have an active medical safety committee where we review 
all adverse drug events and potential adverse drug events. 
These are computerized in an incident reporting system. 
o 	 Incident reports are summarized on a multi-year basis for 
trends and improvements. 
o 	 New incident report form is easy to userequires mostly 
checking specific categoriescategories are based on meta-
analysis of incident reports filed over last several years. 
Patient Satisfaction 
o 	 Our satisfaction survey includes children K-5 grades.  Along 
with the satisfaction survey, we also survey parents, teachers, 
administrator, staff at the school and we use a standard health 
behavior survey in children 4-5 (grades) to evaluate 
effectiveness of health prevention activities. 
o 	 Patients who transfer medical records are mailed a survey to 
determine the reason for leaving our practice.  The survey 
results are rewarded [reviewed] by the board of directors, 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  20  RR	 EE SS PP OO NN DD EE NN TT    CC OO MM MM EE NN TT SS  
administrative staff, and provider and support staff. 
Corrective action is implemented when appropriate. 
o 	 Direct line for patients with complaints to the chief executive 
officer who actively responds to such complaints. Believe this 
has defused potential problems at the early stage. 
o 	 The center utilizes a public board forum where the public gets 
to meet the board of directors and directors of services at least 
2 times per year. This unique forum allows the community at 
large, and the patients to come and listen to the board speak 
about the changes and challenges in the provision of care. The 
patients and the community-at-large also get the opportunity 
to voice their opinions on the care received, services they need, 
and satisfaction in general. 
Training 
o 	 Risk management topic at every monthly administration staff 
meeting. 
o 	 Annual in-service training with staff, annual education day 
with all employees to go over Office of Occupational Safety and 
Health Administration safety and required in-services. 
o 	 Conducting weekly case conferences with clinicians from 
medicine, mental health, and social work to review patients 
with non-adherence issues and/or behavior problems that pose 
a potential liability risk to the organization and how to deal 
with those patients moving forward. 
Medical Records 
o 	 Electronic medical record with drug interaction warnings, 
reminder modules, and other decision support tools. 
o 	 We are currently developing and implementing an electronic 
medical record program. This will enhance and facilitate 
quality improvement and other monitoring capabilities as well 
as improve client assessment and care by use of required fields 
for key/critical assessment, accreditation, preventive care, and 
documentation requirements. 
Peer Review 
o 	 Use of former medical director (now retired) to conduct peer 
review. 
OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  21  R	 E S P O N D
 E	 N T   C O M M E N T S  
o 	 Have set up a system of peer review whereby providers 
exchange pertinent sections of medical record by mail (because 
of great distance between our 7 clinics).  The process ends with 
the audit tool returned to the credentialing department and 
recorded for each individual. 
Health center respondents offered  Thirty-nine percent of 
respondents offered 
recommendations to HRSA regarding risk 
recommendations to HRSA.  
management 
Below are some highlights. 
Training and Technical Assistance 
o 	 Seminars so that health center staff can network with HRSA 
staff. 
o 	 Try to utilize technology to offer training on risk management 
(video conferencing, satellite broadcasts). 
o 	 Get the information out on available resources. 
o 	 Most risk management information is hospital/inpatient based. 
Would be nice to have HRSA provide information related to 
health centers risk management issues on a regular basis. 
o 	 Work more closely with the National Association of 
Community Health Centers on this.  The National Association 
of Community Health Centers provides great training, in 
general. 
o 	 Develop training that dedicates time to develop/review risk 
management polices and procedures, or gives a clear step-by-
step approach. 
Policies and Guidance 
o 	 Make the Policy Information Notices more user friendly. 
o 	 Quick reference handouts for staff updates. 
o 	 Seek out best practices and disseminate. 
o 	 Sample policies. 
o 	 Incorporate a strong risk management program into the 
requirements for section 330 funding and performance review 
calculations. 
o 	 Specialized risk management for mental health, dental, and 
obstetrics/gynecology. 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  22  R	 E S P O N D E N T   C O M M E N T S  
Federal Tort Claims Act 
o 	 More feedback from HRSA after a FTCA [Federal Tort Claims 
Act] case is filed concerning progress, outcome, and 
suggestions for improvements. 
o 	 Should provide numbers of the most cases of malpractice suits 
filed and trends. 
o 	 Cover any remaining gaps in FTCA [Federal Tort Claims Act] 
coverage such as volunteers, consultants, and sexual 
harassment. 
Medical Records 
o  Invest in electronic medical records. 
Incident Reporting 
o 	 Develop a nonpunitive culture on local, State, and Federal 
level for a reporting system.  This would help to identify and 
quantify possible medical errors or sentinel events in a health 
center. 
Peer Review 
o 	 For rural/sparse areas establish a network that encourages 
peer review. 
On-Site Assessment 
o 	 Onsite assessment of the centers risks (physical and 
nonphysical risks, nonclinical and clinical). 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  23  
 O P P O R T U N I T I E S   F O R   I M P R O V E M E N T
Respondents indicated that they experience several challenges in 
conducting risk management.  Given the importance of risk 
management from both a patient safety and a financial perspective, it 
would be helpful for HRSA to explore these challenges in greater depth 
to ensure that all health centers are, in fact, able to implement and 
maintain effective and comprehensive risk management programs. 
The fundamental challenge according to respondents is the lack of 
financial resources. This has implications for training, staffing, and 
other risk management activities.  Even deemed respondents reported 
that financing was an issue.  Yet, almost a third of deemed 
respondents did not know if they had reinvested their savings in risk 
management and 22 percent indicated that they did not reinvest it in 
risk management. Although HRSAs policy is unclear as to its 
expectations for reinvesting in risk management, it is reasonable to 
expect deemed health centers to spend some portion of their savings 
on risk management.  Toward that end, HRSA may want to ensure 
that all health centers are investing adequately in risk management. 
For deemed health centers in particular, HRSA may want to 
determine the amount of savings these health centers realize from 
being deemed and ensure that they are reinvesting some portion of 
these savings into risk management. 
In addition, respondents indicated that the lack of training was a 
challenge that affected their ability to conduct risk management.  
Although HRSA has provided opportunities for training, it is clear that 
health centers want more. HRSA may want to develop a 
comprehensive, ongoing training agenda for health centers on risk 
management.   
Finally, HRSA may also want to explore creative, inexpensive ways to 
assist health centers. These could include disseminating best practices 
or a newsletter; developing tool kits that contain sample policies and 
procedures; developing Web-based training; and encouraging health 
centers to take advantage of existing HRSA-funded networks, such as 
the Healthy Disease Collaborative and the Integrated Service Delivery 
Initiative, as a vehicle to share resources and information on risk 
management. 
In accomplishing all these goals, we encourage HRSA to work with its 
partners, such as the State Primary Care Associations and other 
regional and national associations with an interest in health centers. 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  24  O P P O R T U N I T I E S   F O R   I M P R O V E M E N T  

AGENCY COMMENTS 
HRSA responded positively to the report and its comments reflect its 
commitment to improving risk management for health centers.  For 
HRSAs complete response to the report, see the following section. 
HRSA has established a new goal that, by 2010, 100 percent of health 
centers will participate in risk management training.  HRSA indicated 
that it has several initiatives planned or underway to meet this goal. 
HRSA is planning a risk management workshop at the Annual National 
Association of Community Health Centers Policy and Issues Forum in 
March 2005. This workshop will feature discussions of risk 
management practices, existing risk management resources, and the 
costs associated with conducting risk management.  At this workshop, 
HRSA will provide health centers with estimates on the potential 
savings from participating in the FTCA deeming process. HRSA also 
intends to encourage health centers to reinvest those savings in risk 
management.  It is exploring additional opportunities to conduct similar 
workshops on risk management. 
HRSA is in the process of developing a comprehensive risk management 
training agenda for health centers. This training agenda will address: 
(1) HRSAs expectations for risk management, (2) mechanisms in which 
HRSA can assist health centers to obtain continuing medical and 
professional education, and (3) cost estimates of establishing continuing 
education. HRSA plans to have a comprehensive risk management 
agenda in place by June 2005. 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  25    A G E N C Y   C O M M E N T S
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  26  A G E N C Y   C O M M E N T S

  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  27  A G E N C Y   C O M M E N T S

  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  28  A G E N C Y   C O M M E N T S

  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  29    A P P E N D I X   ~   A
Methodology 
Document Review 
We obtained and reviewed relevant documents associated with risk 
management and health centers, such as laws, regulations, policies, 
guidance documents, and training materials. These documents included: 
o 	 Federally Supported Health Center Assistance Acts of 1992 and 
1995 
o 	 42 C.F.R. Subpart C-Grants for Operating Community Health 
Centers 
o 	 HRSAs Policy Information Notices (1998-23, 1999-08, 2002-22,    
2002-24, 2002-32) 
o 	 Joint Commissions Comprehensive Accreditation Manual for 
Ambulatory Care 
o 	 HRSAs Federal Tort Claims Act Clinicians Handbook 
o 	 HRSAs Deeming and Re-Deeming Application Forms 
o 	 HRSAs Primary Care Effectiveness Review Protocol (March 
2000) 
o 	 Resources provided to health centers during HRSA-sponsored 
training on risk management by the National Association of 
Health 
Stakeholder Interviews 
We interviewed experts within and outside of HRSA to learn about risk 
management and to identify potential key risk management practices to 
use on the survey. Persons interviewed included: 
o 	 HRSA officials 
o 	 Representatives from the National Association of Community 
Health Centers 
o 	 Representatives from several State Primary Care Associations 
o 	 Representatives from the Association of Healthcare Risk 
Managers 
o 	 Representatives from the Joint Commission 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  30  AA PP PP
 EE	 NN DD II XX ~~ AA  
o 	 Representatives from the Management Assistance 
Corporation, a HRSA contractor that provides clinical risk 
assessment for health centers 
o 	 Representatives from private malpractice insurance companies 
that offer malpractice insurance and risk management 
services for health care facilities, including Princeton Risk 
Protection, Inc. 
Survey of Health Centers 
We surveyed a stratified random sample of 248 health center grantees out 
of the 835 grantees that received funding from HRSA in FY 2002. We 
chose this sample size to ensure a precision of +/- 5 percent at the 
95-percent confidence level. However, later methodological limitations 
prevented us from generalizing to the entire population. (See section on 
data limitations on page 28.) 
We drew the sample from a list provided by HRSA. Prior to pulling the 
sample, we eliminated 17 health centers from the original 852 in the list 
provided by HRSA because we lacked information on the number of 
patients served. (See Table 4.) 
We drew a stratified random sample from the 832 remaining health 
centers. We divided the population into three strata based on the number 
of patients served in FY 2002. (See Table 4 for the strata.) We defined 
the strata based on the way the data were distributed. From each of the 
first two strata, we randomly selected 91 health centers from each of the 
totals. We included all 86 health centers from the third stratum. This 
resulted in a total sample of 268 health centers. We eliminated 20 health 
centers from the 268 because their names, in whole or in part, matched 
those of health care organizations that are part of ongoing investigations 
Table 4. Sample Design 
Revised  Centers That 
Strata by Number of Patients  Population of  Population of  Sample of  Received a  Number of Survey 
Served in FY 2002  Health Centers  Health Centers  Health Centers  Survey  Respondents*
 < 5,000 patients  226  226  91  89  55
 5,000 -30,000 patients  523  523  91  83  60
 > 30,000 patients  86  86  86  76  50 
Unknown  17  0  0  0  10 
51 100 Teachers  4 000  0  0  0 
Overall Total  852  835  268  248  175 
*The data in this column were self-reported by respondents and not based on actual numbers provided by HRSA. 
Source: Office of Evaluation and Inspections' analysis of survey responses, 2004. 
OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  31  AA PP PP EE NN DD II XX ~~ AA  
conducted by the Office of Investigations within the Office of Inspector 
General. This resulted in a final sample size of 248. 
The survey contained 43 questions regarding the importance of the 
16 specific risk management practices, a self-assessment of how centers 
were doing on each of these practices, and challenges to implementing 
these practices. We identified these 16 risk management practices and 
potential challenges from our document review, which included applicable 
HRSA policies and regulations and risk management standards and 
training materials from other private organizations and Federal agencies. 
We also identified these practices and challenges from interviews with 
key stakeholders. 
We pretested the survey with two health centers. We addressed the 
survey to the health centers executive directors as identified by HRSA. 
In the cover letter we asked the executive directors to complete the 
survey. 
To encourage a high response rate, we sent an introductory letter to each 
health center in our sample explaining the purpose of the survey. In the 
cover letter, we emphasized that the survey was anonymous. (The survey 
was anonymous with the intent to reduce bias in our survey results.) In 
our introductory letter we also included a brief description of the Office of 
Evaluation and Inspections and a two-page summary of the inspection. 
One week later we mailed the first survey. We sent a second survey 
1 month later. All health centers received the second survey because we 
were unable to determine which health centers had already responded 
due to the anonymity of the respondents. Finally, 1 month later, we 
followed up with telephone calls to all health centers for which we could 
readily obtain working telephone numbers. 
We received 175 responses to the survey, for a response rate of 71 percent. 
(See Table 4 on the previous page.) Because not all respondents answered 
every question, the actual number of respondents varies by question. 
Therefore, throughout the report we provide percentages based on the 
actual number of respondents for each question. 
We conducted subanalysis by the self-reported number of patients served 
(i.e., small and medium versus large) and by deemed status (i.e., deemed 
versus nondeemed) for selected questions. 
We provide self-reported, descriptive information on the respondents. 
(See Tables 5, 6, 7, 8, and 9 on the following pages.) 
OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  32  A P P E N D I X ~ A  
Data Limitations.  Because the survey was anonymous and we obtained 
only self-reported estimates about the number of patients served in  
FY 2002, we were unable to correctly determine which stratum each 
respondent fell into.  As a result, we could not weight the data, nor could 
we calculate confidence intervals. Therefore, we cannot make statistical 
projections to the entire population of health centers based on the survey 
data.  The data presented in the report are simple frequencies of the 
responses. We did not independently verify any statements health 
centers made on the survey.  Finally, we are unable to conduct a 
nonrespondent analysis because the survey was anonymous. Therefore, 
we cannot estimate the level of bias among respondents.  These 
limitations apply to all data analysis and comparisons presented in the 
report. 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  33  A P P E N D I X ~ A  

Table 5.  Percentage of Health Center Respondents by Type* 
Type of Health Center  Percentage of Respondents  Percentage of Sample  Percentage of Population 
Community Health Center  89  89  88 
Migrant Health Center  21  19  15 
Health Care for the Homeless  16  20  18 
School-Based Health Center  1  1  4 
Public Housing Residents  7  12  9 
*Numbers exceed 100% because a health center may be more than one type. 
Source:  Office of Evaluation and Inspections' analysis of survey responses, 2004. 
Table 6. Percentage of Health Center Respondents by Amount of HRSA Section 330 Funding 
Received in FY 2002* 
Amount of Funding in FY 2002  Percentage of Respondents  Percentage of Sample  Percentage of Population 
< $500,000  19  25  21 
$500,000-$1 million  32  25  30 
$1-$2 million  19  21  29 
> $2 million  30  29  21 
*Numbers do not add up to 100% due to rounding.

Source:  Office of Evaluation and Inspections' analysis of survey responses, 2004.

Table 7. Percentage of Health Center Respondents by Number of Delivery Sites in FY 2002* 
Percentage of 
Number of Delivery Sites  Percentage of Respondents  Percentage of Sample  Population 
1  22 19  21    
2-5  44  43  47 
> 5  35  38  32 
*Numbers do not add up to 100% due to rounding.

Source:  Office of Evaluation and Inspections' analysis of survey responses, 2004.

  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  34  A P P E N D I X ~ A  

Table 8.  Percentage of Deemed Health Center Respondents 
Percentage of 
Federal Tort Claims Act Status  Respondents  Percentage of Sample  Percentage of Population 
Deemed  88  74  73 
Nondeemed  12  26  27 
Source: Office of Evaluation and Inspections' analysis of survey responses, 2004. 
Table 9.  Percentage of Health Center Respondents Accredited by the Joint Commission 
Joint Commission Status  Percentage of Respondents  Percentage of Sample  Percentage of Population 
Accredited  51  34  34 
Nonaccredited  49  66  66 
Source: Office of Evaluation and Inspections' analysis of survey responses, 2004. 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  35    A P P E N D I X   ~   B
Additional Analysis by Size of Respondents 
Table 10.  The Level of Importance of Risk Management Practices by the Size of Health Center 
Respondents* 
Percentage of Small and  Percentage of Large 
Medium Respondents Who  Respondents Who Indicated 
Indicated They Were Doing  They Were Doing an Excellent 
an Excellent or Good Job at  or Good Job at Implementing 
Risk Management Practice  Implementing This Practice  This Practice 
Regular Staff Training on Risk Management  50  66 
Privileging of Health Care Professionals  82  96 
Regular Patient Satisfaction Survey  78  92 
Up-To-Date Polices/Procedures on Risk Management  66  78 
Active Quality Improvement Programs  85  96 
Comprehensive Patient Medical Records  86  96 
Onsite Assessment of Risks and Risk Management Practices  56  66 
Internal Incident Reporting Systems  81  90 
Credentialing of Health Care Professionals  94  100 
Clear Communication With Patients  91  96 
Documentation of Informed Consent  88  90 
Clear Communication With Providers  90  90 
Formal Patient Grievance Mechanism  88  88 
Appropriate Use of Clinical Protocols  83  78 
Ongoing Peer Review of Patient Cases  73  68 
Patient Tracking System  69  61 
Source: Office of Evaluation and Inspections' analysis of survey responses, 2004. 
*We defined the size of a health center based on the number of patients served in FY 2002 as reported by respondents. 
Small centers reported serving fewer than 5,000 patients, medium centers reported serving between 5,000 and 30,000 
patients, and large centers reported serving more than 30,000 patients. 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  36  A P P E N D I X ~ B  

Table 11. Challenges to Conducting Risk Management by the Size of Health Center Respondents* 
Percentage of Small 
and Medium  Percentage of  Percentage of All 
Respondents Who  Large Respondents  Respondents Who 
Indicated it Was a  Who Indicated it  Indicated it Was a 
Challenge to a  Was a Challenge to  Challenge to a 
Major or Moderate  a Major or  Major or Moderate 
Challenges to Risk Management  Extent  Moderate Extent  Extent 
Lack of financial resources  86  80  84 
Lack of dedicated full-time equivalent staff  85  74  83 
Lack of clinical staff time  86  74  82 
Lack of expertise among staff regarding risk management  66  60  64 
Lack of staff training on risk management  68  54  64 
Lack of technical assistance  54  40  49 
Lack of clear requirements from HRSA  49  44  47 
Lack of commitment by the health center's governing board  13  2  10 
Source: Office of Evaluation and Inspections' analysis of survey responses, 2004. 
*We defined the size of a health center based on the number of patients served in FY 2002 as reported by respondents.  
Small centers reported serving fewer than 5,000 patients, medium centers reported serving between 5,000 and 30,000 
patients, and large centers reported serving more than 30,000 patients. 
  OEI-01-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  37  This report was prepared under the direction of Mark R. Yessian, Ph.
Regional Inspector General for Evaluation and Inspections in the Boston
regional offce, and Joyce M. Greenleaf, MBA, Assistant Regional
Inspector General. Other principal Office of Evaluation and Inspections
staff who contributed include:
Aimee Golbitz Team Leader
Norman Han Program Analyst
Sara Schulman Program Analyst
Michael Flood In tern
Alan Levine Program Specialist
Elise Stein Director, Public Health and Human Services Branch
Barbara Tedesco Mathematical Statistician
OEI-01-03-00050 RISK MANAGEMENT AT HEALTH CENTERS   E N D N O T E S   
1 Authorized under section 330 of the Public Health Service Act. 
2 U.S.C. Title 28, Part VI, Chapter 171. 
3 The Federally Supported Health Center Assistance Act of 1992 (P.L. 
102-501) provided initial coverage to eligible health centers under the 
Federal Tort Claims Act (FTCA) for a 3-year period.  This provision 
became permanent under the Federally Supported Health Center 
Assistance Act of 1995 (P.L. 104-73). 
4 Typically health centers still have to purchase additional medical 
malpractice insurance to cover certain employees not covered under 
the FTCA and claims from years not covered under the FTCA.  This 
insurance is referred to as gap or supplemental insurance and 
generally is less expensive than comprehensive medical malpractice 
insurance. 
5 Funds that are not spent remain in this fund for the following year.   
6 Medical Malpractice:  Federal Tort Claims Act Coverage Could Reduce 
Health Centers Costs, Government Accountability Office, April 1997 
(GAO/HEHS-97-57). 
7 Federally Supported Health Centers Assistance Act of 1992 and 1995 
(P.L. 102-501). 
8 Credentialing and Privileging of Health Care Practitioners, Policy 
Information Notice 2001-16, HRSA, July 17, 2001; and Clarification 
of Bureaus of Primary Health Care Credentialing and Privileging 
Policy Outlined in Policy Information Notices 2001-16, Policy 
Information Notice 2002-22, HRSA, July 10, 2002. 
9 Comprehensive Accreditation Manual for Ambulatory Care, Joint 
Commission on Accreditation of Healthcare Organizations, Draft 
2004-2005. 
10 Federally Supported Health Centers Assistance Act of 1992 and 1995 
(P.L. 102-501). 
OEI-00-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  39  11 Credentialing and Privileging of Health Care Practitioners, Policy 
Information Notice 2001-16, HRSA, July 17, 2001; and Clarification 
of Bureaus of Primary Health Care Credentialing and Privileging 
Policy Outlined in Policy Information Notices 2001-16, Policy 
Information Notice 2002-22, HRSA, July 10, 2002. 
12 We defined these categories based on the number of patients served in 
FY 2002. Small centers reported serving fewer than 5,000 patients, 
medium centers reported serving between 5,000 and 30,000 patients, 
and large centers reported serving more than 30,000 patients. 
13 HRSA policies require health centers to provide training; however, the 
policies do not specify how much training is required.  HRSA does not 
require onsite review, peer review, or patient tracking. 
OEI-00-03-00050  RISK MANAGEMENT AT HEALTH CENTERS  40