VA operates 158 medical centers and employs approximately 10,723 full- and part-time physicians and 37,294 registered nurses. During fiscal year 1994, these facilities treated approximately 906,925 inpatients and provided for 24,074,365 outpatient visits. VA acknowledges that patient care, particularly that which occurs in hospitals, contains some degree of inherent risk. In some instances it is difficult to differentiate between the risk of incurring malpractice claims from not treating diseases and the risk of incurring such claims from proceeding with treatment. Under the provisions of the Federal Tort Claims Act (title 28 U.S.C. 2671-2680), the federal government may be held responsible for monetary damages for personal injury or wrongful death caused by the negligent actions of its employees when they are operating within the scope of their employment. Thus, the government assumes liability for any such actions by VA practitioners if they were performed in the line of duty. VA’s Office of General Counsel has overall responsibility for managing the malpractice claims process. However, the routine investigation, analysis, and decision-making involved in processing each claim is conducted by one of VA’s 23 regional counsels located throughout the United States. Specifically, regional counsel staff examine the initial claim, interview the VA health care provider(s) involved, and obtain an independent medical opinion on the circumstances of the claim—usually from peer reviewers in a VAMC other than the center involved in the claim. On the basis of this information, the regional counsel can either deny or settle the case. If a claim is denied, the claimant may appeal it within VA or file suit in federal district court. Litigation is defended by the U.S. Attorney with the assistance of the regional counsel and the Office of General Counsel. No court action can be initiated until the claimant has presented his/her claim administratively and had it denied. When an investigation has been completed by regional counsel, a complete, concise, and accurate statement of the relevant facts must be prepared by the cognizant attorney. The statement of facts must be supported by appropriate exhibits and references. Because of their confidential and privileged nature, however, quality assurance records and documents may not be included as exhibits to the statement. If a suit is filed, the completed statement of facts is to be reviewed by attorneys in the Office of General Counsel and appropriate VA medical personnel. It is also to be reviewed by attorneys in the Department of Justice. Case files are maintained by regional counsels in a computerized database to which VA’s General Counsel has complete access. A claim may be settled by regional counsel for amounts up to $100,000. Settlements above that amount but not exceeding $200,000 may be settled by VA’s General Counsel. Sums above $200,000 are negotiated by the General Counsel subject to approval by the Department of Justice. In fiscal year 1994, 252 administrative claims were settled by VA’s regional counsels and General Counsel at a cost of $19.6 million; 127 lawsuits were settled by the Department of Justice and the U.S. Attorney at a cost of $30.6 million; and 12 cases resulted in court judgments against the federal government totaling $3.6 million. The number of malpractice claims filed annually against VA has increased from 678 in fiscal year 1990 to 978 in fiscal year 1994. Correspondingly, the monetary payments made on 943 administrative claims settled during this period have increased from approximately $10 million in fiscal year 1990 to $20 million in fiscal year 1994. In addition, the 1,089 lawsuits filed against VA have resulted in annual litigated settlements and awards to claimants ranging from $22 million in fiscal year 1990 to $34 million in fiscal year 1994. Total payments made on behalf of VA for fiscal years 1990 through 1994 amounted to over $205 million with an average paid claim of $120,714. VA classifies its malpractice claim data in two categories: administrative claims and lawsuits. Every claim received in VA is initially classified as administrative. However, if a claim subsequently results in a lawsuit and is filed in federal district court, the claim entry is amended to reflect the new status, that is, “suit filed” rather than “claim filed.” Table 1 shows the number of administrative cases filed and paid from fiscal year 1990 through fiscal year 1994. Lawsuits filed in federal district court may be settled before the court makes a final judgment. Table 2 shows the number and dollar value of lawsuits filed in federal district court, the number of claims settled before a court judgment was made, and the number and dollar value of claims that resulted from a court judgment. The number of malpractice claims filed and paid is not necessarily evidence that negligence has occurred. Claims experience does, however, provide the basis for examination of trends, identification of problem areas, and an attempt to provide a systemwide vigorous response through risk management programs. VA recognizes this and in June 1992 entered into an agreement with AFIP to analyze and assess trends in VA malpractice claims. The purpose of this effort was to improve the quality of medical care in the VA system by providing VA with information to (1) identify problem areas in delivery of care and (2) initiate appropriate corrective actions. The agreement with AFIP pertains to all medical malpractice claims in the VA system that were filed administratively on or after October 1, 1992. As of October 1995, AFIP had issued one report (April 1994) to VA. This report contains an analysis of the 801 medical malpractice claims filed against VA in fiscal year 1993 and is intended to provide VA management with some general characteristics of VA malpractice claims in order to help VA managers identify possible opportunities for improving VA health care delivery. AFIP’s report was provided by VA’s Office of Quality Management to all medical center quality managers for their review. Because this was the first report prepared by AFIP, no data trends could be noted. However, examples of the types of analysis that the report contained were as follows: The average time between the date of the incident and the date the case was closed (both administratively closed and closed by litigation) was 3.62 years. The three most frequent age groups filing medical malpractice claims were beneficiaries between the ages of 61 and 70 (29.5 percent); 41 and 50 (22.8 percent); and 51 and 60 (18.1 percent). In three-fourths of all malpractice cases filed, there was either major injury (53.9 percent) or death (28.2 percent). The most frequently recorded clinical specialty involved in malpractice claims was internal medicine (13.1 percent). Less frequently listed specialties were general surgery (8.7 percent), psychiatry (7.8 percent), orthopedic surgery (6.7 percent), and nursing (5.4 percent). The three most frequent locations where alleged incidents occurred were the operating suite (23.8 percent), the patient’s room (23.5 percent), and the outpatient area (17.2 percent). For the eight components of care reviewed by AFIP, the care was either “definitely acceptable,” or “probably acceptable” in 75 to 80 percent of the cases. According to the peer reviewer at the facility, in approximately 64 percent of the cases, most experienced competent practitioners would have handled the case similarly in all respects. In approximately 20 percent of the cases, most experienced competent practitioners might have handled the case differently in one or more respects, and in 9 percent of the cases, most experienced practitioners would have handled the cases differently in all respects. Staff physicians constituted 61.2 percent of the various providers involved in the alleged incidents, and physicians in training (residents or fellows) constituted 32.7 percent of the total. In approximately one-half of the claims filed, the duration of the injury caused by the alleged negligence was permanent. Quality assurance personnel in the six VAMCs we visited are not consistently using available malpractice claim information in either their quality assurance or risk management programs. For example, of the 53 claims paid in fiscal year 1994 that were associated with practitioners in these facilities, we found only 12 cases where there was evidence that defined follow-up action was taken on the risk management issues specified in the tort claim. Further, recent discussions with quality assurance personnel at these facilities revealed that the analysis of malpractice claims being made for VA by AFIP is not consistently being used by medical center personnel to improve quality of care. Only one of the six risk management and/or quality assurance personnel we interviewed indicated that she is using AFIP information in the center’s risk management program. This Risk Manager has established a system for reviewing and tracking all malpractice claims filed for the medical center. Specifically, information from AFIP’s report is compared with the medical center’s claims database to present a comprehensive picture of malpractice experience of the medical center. This information assists the center’s risk management and quality assurance personnel in analyzing and assessing trends in malpractice data. Of the remaining personnel we interviewed, two told us that they had not seen AFIP’s report, and three stated that they had read the report. However, those three individuals did not indicate that they used the data in their risk management program. A copy of the report was usually given by the VAMC’s chief of staff to the relevant service chiefs for follow-up. The service chiefs use the information in their clinical service meetings with the medical staff. The Risk Manager at one of the VAMCs we visited told us that VA is also replacing its Patient Incident Review guidelines with guidelines for an “Integrated Risk Management Program.” The revised guidelines call for VAMCs to focus on correcting problems using claims analysis information obtained from AFIP’s annual report. However, AFIP’s annual report contains VA systemwide claims data and analysis and does not have information specific to any VAMC. These data are available upon request.