&. 

"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 

Health Resources n Services A nist,ion 

FROM: George Grob 4

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 

RISK MANAGEMENT AT


HEALTH CENTERS


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 Investiga ions t

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. 
∆ EXECUTIVE SUMMARY 

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 

 O E I - 0 1 - 0 3 - 0 0 0 5 0 RISK MANAGEMENT AT HEALTH CENTERS i 
EXECUTIVE SUMMARY 

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 fulltime equivalent staff person for risk management, and 64 percent cited 

lack of training. 

 O E I - 0 1 - 0 3 - 0 0 0 5 0 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 I T I E S F O R I M 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 N O W L 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

center s 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.

Ensuring patient safety. Health centers treat a wide variety of

conditions, including diabetes, asthma, hypertension, and

OEI. 01. 03- 00050 RISK MANAGEMENT AT HEALTH CENTERS
INTRODUCTION 

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 

 O E I - 0 1 - 0 3 - 0 0 0 5 0 RISK MANAGEMENT AT HEALTH CENTERS 2 
INTRODUCTION 

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. HRSA’s 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 President’s 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 President’s 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 

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INTRODUCTION 

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 

HRSA’s 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, HRSA’s 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 any activity 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 center’s risk management program. The grant 

application also requires health centers to describe their quality 

assurance and risk management practices. The deeming application 

 O E I - 0 1 - 0 3 - 0 0 0 5 0 RISK MANAGEMENT AT HEALTH CENTERS 4 
INTROD UCTION

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. 

O E I - 0 1 - 0 3 - 0 0 0 5 0 RISK MANAGEMENT AT HEALTH CENTERS 5 
INTRODUCTION 

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 President’s Council on Integrity and 

Efficiency. 

 O E I - 0 1 - 0 3 - 0 0 0 5 0 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 center’s 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 center’s 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. 

 O E I - 0 1 - 0 3 - 0 0 0 5 0 RISK MANAGEMENT AT HEALTH CENTERS 7 
PRIMER ON RISK MANAGEMENT 

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 center’s 

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 center’s operations and 

processes related to risk management. 

 O E I - 0 1 - 0 3 - 0 0 0 5 0 RISK MANAGEMENT AT HEALTH CENTERS 8 
s u R V E Y S U L T S

While health center respondents indicated that

all 16 risk management practices were

important, they selected credentialing, quality

improvement, comprehensive medical records,

and clear communication with patients as the

most important

We asked respondents to select the

three risk management practices

they considered to be the most

important for reducing medical

malpractice claims and ensuring

patient safety. The range of

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
SURVEY RESULTS 

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 

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SURVEY RESULTS 

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 isn’t 

documented, it didn’t occur.” Second, respondents pointed out that 

medical records play an important role in preventing errors, because 

they serve as a complete record of the patient’s 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 

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SURVEY RESULTS 

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 

Risk Management Practice 

Percentage of Respondents 

Who Selected the Practice as 

One of the Three Most 

Difficult to Conduct 

Percentage of Respondents 

Who Indicated They Were 

Doing an Excellent or Good 

Job at Conducting the 

Practice 

Regular Staff Training on Risk Management* 

Patient Tracking System 

Ongoing Peer Review of Patient Cases 

Onsite Assessment of Risks and Risk Management Practices 

Active Quality Improvement Programs* 

Up-to-Date Polices/Procedures on Risk Management* 

Comprehensive Patient Medical Records* 

Appropriate Use of Clinical Protocols* 

Credentialing of Health Care Professionals* 

Internal Incident Reporting Systems 

Clear Communication With Patients 

Privileging of Health Care Professionals* 

Clear Communication With Providers* 

Formal Patient Grievance Mechanism* 

Regular Patient Satisfaction Survey* 

Documentation of Informed Consent 

48 

42 

32 

30 

26 

21 

17 

14 

11 

10 

8 

7 

4 

3 

3 

1 

54 

66 

70 

58 

87 

70 

90 

82 

95 

84 

93 

86 

90 

88 

82 

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. 

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SURVEY RESULTS

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 

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SURVEY RESULTS

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 

inadequate financial resources, staffing, and 

training are key challenges to conducting risk 

management 

Respondents experienced 

several challenges that 

prevented them from doing all 

that they would like in terms of 

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 center’s 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 

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SURVEY RESULTS 

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. HRSA’s policy is unclear 

on how much of these savings should be used for risk management; 

HRSA’s 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. 

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SURVEY RESULTS

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 

HRSA’s 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.) 

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SURVEY RESULTS 

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 

HRSA Resources 

Percentage of 

Respondents Who 

Indicated They Were 

Completely or Somewhat 

Satisfied 

Percentage of 

Respondents Who 

Indicated No 

Experience With the 

Resource 

HRSA's policy inform ation notice on credentialing and privileging (Policy 

Inform ation Notice 2002-22) 

Federal Tort Claim s Act helpline (1-866-FTCA HELP) 

HRSA's program expectation (Policy Inform ation Notice 1998-23) 

Accreditation by the Joint Com m ission on Accreditation of Healthcare 

organizations supported by HRSA 

HRSA's online resources (i.e., W eb site) 

National Association of Com m unity Health Centers' m alpractice risk 

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 

Clinical Quality (form erly the Center for Risk Managem ent)* 

Federal Tort Claim s Act claim s-related site visits initiated by HRSA's 

Division of Clinical Quality (form erly the Center for Risk Managem ent)* 

HRSA's distribution of the publication, "Risk Managem ent," printed by 

the Departm ent of Legal Medicine, Arm ed Forces Institute of Pathology 

Referral to appropriate risk m anagem ent resources by HRSA project 

officer 

Incident reporting system (i.e., Doctor Quality)* 

79 

78 

74 

74 

63 

59 

58 

50 

48 

46 

39 

6 

28 

7 

49 

23 

36 

46 

71 

45 

49 

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. 

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SURVEY RESULTS 

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. 

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∆ RESPONDENT COMMENTS 

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 sites—both 

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. 

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R ESPONDENT COMMENTS 

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 use—requires mostly 

checking specific categories—categories are based on metaanalysis 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, 

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RESPONDENT COMMENTS ESPONDENT COMMENTS

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. 

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R ESPOND E NT COMMENTS 

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-bystep 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. 

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R ESPONDENT COMMENTS 

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 center’s risks (physical and 

nonphysical risks, nonclinical and clinical). 

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∆ OPPORTUNITIES FOR IMPROVEMENT 


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 HRSA’s 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. 

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OPPORTUNITIES FOR IMPROVEMENT 

AGENCY COMMENTS 

HRSA responded positively to the report and its comments reflect its 

commitment to improving risk management for health centers. For 

HRSA’s 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) HRSA’s 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. 

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∆ AGENCY COMMENTS 

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AGENCY COMMENTS

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AGENCY COMMENTS

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AGENCY COMMENTS

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∆ APPENDIX ~ 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 HRSA’s Policy Information Notices (1998-23, 1999-08, 2002-22, 

2002-24, 2002-32) 

o Joint Commission’s Comprehensive Accreditation Manual for 

Ambulatory Care 

o HRSA’s Federal Tort Claims Act Clinician’s Handbook 

o HRSA’s Deeming and Re-Deeming Application Forms 

o HRSA’s 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 

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APP ENDIX~A

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. 

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APPENDIX~A APPENDIX~A 

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.) 

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APPENDIX~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. 

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APPENDIX~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 

$500,000-$1 million 

$1-$2 million 

> $2 million 

19 

32 

19 

30 

25 

25 

21 

29 

21 

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* 

Number of Delivery Sites Percentage of Respondents Percentage of Sample 

Percentage of 

Population 

1 

2-5 

> 5 

22 

44 

35 

19 

43 

38 

21 

47 

32 

*Numbers do not add up to 100% due to rounding.

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

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APPENDIX~A 

Table 8. Percentage of Deemed Health Center Respondents 

Federal Tort Claims Act Status 

Percentage of 

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 

Nonaccredited 

51 

49 

34 

66 

34 

66 

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

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∆ APPENDIX ~ B 

Additional Analysis by Size of Respondents 

Table 10. The Level of Importance of Risk Management Practices by the Size of Health Center 

Respondents* 

Risk Management Practice 

Percentage of Small and 

Medium Respondents Who 

Indicated They Were Doing 

an Excellent or Good Job at 

Implementing This Practice 

Percentage of Large 

Respondents Who Indicated 

They Were Doing an Excellent 

or Good Job at Implementing 

This Practice 

Regular Staff Training on Risk Management 

Privileging of Health Care Professionals 

Regular Patient Satisfaction Survey 

Up-To-Date Polices/Procedures on Risk Management 

Active Quality Improvement Programs 

Comprehensive Patient Medical Records 

Onsite Assessment of Risks and Risk Management Practices 

Internal Incident Reporting Systems 

Credentialing of Health Care Professionals 

Clear Communication With Patients 

Documentation of Informed Consent 

Clear Communication With Providers 

Formal Patient Grievance Mechanism 

Appropriate Use of Clinical Protocols 

Ongoing Peer Review of Patient Cases 

Patient Tracking System 

50 

82 

78 

66 

85 

86 

56 

81 

94 

91 

88 

90 

88 

83 

73 

69 

66 

96 

92 

78 

96 

96 

66 

90 

100 

96 

90 

90 

88 

78 

68 

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. 

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APPENDIX~B 

Table 11. Challenges to Conducting Risk Management by the Size of Health Center Respondents* 

Challenges to Risk Management 

Percentage of Small 

and Medium 

Respondents Who 

Indicated it Was a 

Challenge to a 

Major or Moderate 

Extent 

Percentage of 

Large Respondents 

Who Indicated it 

Was a Challenge to 

a Major or 

Moderate Extent 

Percentage of All 

Respondents Who 

Indicated it Was a 

Challenge to a 

Major or Moderate 

Extent 

Lack of financial resources 

Lack of dedicated full-time equivalent staff 

Lack of clinical staff time 

Lack of expertise among staff regarding risk management 

Lack of staff training on risk management 

Lack of technical assistance 

Lack of clear requirements from HRSA 

Lack of commitment by the health center's governing board 

86 

85 

86 

66 

68 

54 

49 

13 

80 

74 

74 

60 

54 

40 

44 

2 

84 

83 

82 

64 

64 

49 

47 

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. 

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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

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∆ 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 Bureau’s 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). 

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11 “Credentialing and Privileging of Health Care Practitioners,” Policy 

Information Notice 2001-16, HRSA, July 17, 2001; and “Clarification 

of Bureau’s 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. 

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