EXECUTIVE SUMMARY
Problems can arise if a risk manager and in-house or outside counsel do not work well together. Clear communication is necessary.
- Educate counsel about the hospital or health system’s business goals and risk tolerance.
- Counsel may sit on the risk management committee, but not always.
- Risk managers should expect lawyers to respond promptly to important queries.
Risk managers often work closely with either in-house counsel or outside attorneys representing the hospital or health system in a range of legal matters, but those interactions can go awry without a good working relationship. Establishing boundaries and proper expectations can go a long way toward achieving the best results.
A good working relationship between risk managers and attorneys is more important than ever, says Kimberly Castellino Metzger, JD, partner with McCarter & English in Indianapolis. She works as outside counsel with many healthcare clients.
“We’re in turbulent times. Laws and regulations are changing quickly, especially in the healthcare field,” Metzger says. “The economy is not in good shape, so everyone is concerned about their bottom line and keeping things solvent. All of these things bring to the forefront, particularly in healthcare, how important risk management is.”
Optimizing risk management requires working well with inside or outside counsel, Metzger says. In-house counsel structure and relationship with risk management may differ from one institution to another. For instance, a large organization with many resources may parcel out the various needs to other departments so the in-house counsel is focused only on legal risks, but others are responsible for regulatory or business legal issues.
In a smaller healthcare organization, the in-house counsel may be responsible for all those needs. That will affect how the risk manager works with counsel.
“It’s not a one-size-fits-all approach to developing a good relationship with counsel because it depends on so many factors, as so many things in healthcare do,” Metzger says. “I have some healthcare clients I’ve worked with for decades and consider personal friends as well as clients. The trust and open communication begin with asking the right questions and understanding the organization’s goals so that you can avoid giving the quick ‘no’ and see why ‘maybe’ might be the best answer for them.”
Understand Privilege on Risk Committee
When a healthcare organization employs in-house counsel, there can be debate over whether the lawyer should serve on the risk management committee. Metzger favors counsel on the committee.
Some people mistakenly believe allowing counsel on the committee makes all committee proceedings privileged, but Metzger says that is not the case. If counsel sits on the committee, the other participants must understand his or her presence does not automatically create privilege for any comments. Similarly, the risk management committee should be instructed that copying counsel on emails does not automatically create privilege.
“I’ve been called into meetings before where they didn’t really need my input, but they wanted me to sit in that chair to create privilege. It doesn’t work that way,” Metzger says. “I’ve been copied on every email on a particular subject, thinking that including my email conveys some kind of protection or privilege. Sometimes it does, and sometimes it doesn’t.”
There is no privilege when counsel is providing general business advice, rather than legal advice, she says.
However, counsel on the committee can offer legal advice in real time, and some comments can be privileged.
“When you ask for legal advice, the lawyer can parcel out his or her business advice vs. his or her legal advice, and privilege the part of it that needs to be privileged,” Metzger says. “That can be an excellent protection for your risk management committee, and it also helps the attorney get educated about the organization’s approach to risk.”
Counsel Must Understand Goals
The biggest disconnect or conflict Metzger sees in these relationships involves whether the lawyer is aligned with business risk as risk management sees it. Lawyers look at legal risks primarily, even though they may touch on related concerns. Risk managers often must look at an issue with different concerns in mind.
Risk managers can help improve discussions by making sure counsel understands broad business goals and willingness to take risks. “A lot of times, I’d be looking at a situation and considering the laws, and I’d say the answer is no. But if you don’t know what the risk tolerance of the organization is and their business goals, simply saying, ‘No, you can’t do that’ might not be what the organization needs or wants to hear,” Metzger says. “There may be very good reasons for that. Especially in this environment of uncertainty, you may need to go forward by balancing that risk rather than eliminating it altogether, as lawyers so often want to do.”
Ask for Alternative Solutions
Risk managers also should not shy away from telling counsel they cannot afford the “perfect” solution to a problem or a strategy that would reduce risk as close to zero as possible. When risk managers have to reject a lawyer’s recommendations because they cannot afford the scope of the plan, they should not be shy about asking for an alternative, Metzger says.
Lawyers are performing their jobs by proposing an approach that reduces the risk as much as possible, but risk managers are doing their jobs by pointing out that it sometimes is not practical. For example, counsel might advise the risks of noncompliance with HIPAA necessitate a hospital spending a large sum on a comprehensive risk assessment plan. The risk manager can reply that such a plan is unaffordable and ask for an alternative.
In that situation, Metzger says a good approach can be to ask counsel what elements of the proposed plan are most important and will yield the most benefit. “What are the components that are absolutely necessary, and which ones can we forgo if we are willing to accept a certain level of risk?” she suggests.
“I see that a lot in my function as a HIPAA attorney. I’ve learned that the best way I can work with a client is to find out how much money they have to spend on this issue, who I can talk to about what has happened before, and their approach to risk tolerance,” Metzger continues. “It is so important to be able to talk to risk management about how we can align the best levels of legal risk and business to reach something we can all live with and protect patients.”
Risk managers and counsel also should communicate well about who is responsible for certain tasks within the healthcare organization as well as what is possible in terms of solutions. Particularly with HIPAA matters involving IP, the risk manager can help guide counsel to a better understanding of technical solutions that are feasible, or at least who to consult within the organization. Otherwise, counsel may make suggestions that are unworkable.
Initial Discussion May Be Worthwhile
The extent to which a risk manager and outside counsel should discuss risk tolerance, business goals, and other factors that can influence a working relationship will depend in part on the scope of the engagement, Metzger says. If counsel is engaged for a specific issue and the interaction will be brief, it may not be wise to pay the lawyer’s hourly rate to discuss these issues in depth.
In other cases in which the attorney will be involved in an ongoing concern with extended interaction, taking time up front to discuss the organization’s structure, goals, and risk tolerance may help prevent problems and wasted legal fees down the road. It also is important for the risk manager or anyone else from the healthcare organization who interacts with him or her to avoid seeking personal legal advice, Metzger says. She has encountered employees of a hospital or health system trying to tack on purely personal legal questions at the end of a meeting. People also have tried to ask her about work-related issues with personal legal ramifications, such as “What if I told you I did this thing? What would happen to me?”
“They are not my client; the organization is my client, so I have to shut those conversations down quickly,” Metzger says.
Multiple Attorneys Can Complicate Matters
Situations involving multiple attorneys, co-counsel, or joint defense agreements can lead to conflicts between one or more of the attorneys and the risk manager, says Khaled John Klele, JD, partner with Riker Danzig in Morristown, NJ. In those cases, part of the problem is the parties have no established relationship as a risk manager might seek with their regular counsel.
“I’ve seen joint defense status or strategy conferences where you can tell there is some tension. It usually surrounds someone overstepping their boundaries, or sometimes you have risk managers who may not like what you’re saying because it impacts the business relationship with the physician,” Klele explains. “Most risk managers understand that you can’t let it affect you personally.”
A key part of the relationship should be that risk managers can immediately access their attorneys, especially when matters involve urgent-emergent patient issues, says Sherri T. Alexander, JD, shareholder with Polsinelli in Dallas.
“Many issues arise regarding patients where the risk manager, in-house counsel, and the hospital need a prompt legal answer. If the attorneys are not easily reachable, or are not sufficiently knowledgeable about the applicable law, the legal advice the client seeks may not be received timely,” Alexander says. “At the same time, if the hospital believes, going into a weekend, it may need to retain an attorney to seek an order for the appointment of a guardian or a blood transfusion, it’s best to advise counsel as early as possible so they can arrange to have a judge available before the weekend begins.”
Alexander’s firm uses a team of attorneys over time to work with their client hospitals’ risk managers. The team approach allows them to be immediately accessible by cellphone, text, or email. The attorneys also must be sufficiently knowledgeable about the particular hospital to identify the specific policies and documents for the risk manager to provide. They must be knowledgeable about the law so they can explain the legal implications and options in plain terms.
The hospital risk manager and attorneys should be willing to collaborate to find a practical solution with minimal risks. “Communication is the key. If I’m concerned that a risk manager or other client is not satisfied with the service or advice given, I request a call or meeting with them to discuss,” Alexander says. “You may find your concern is unfounded; however, the client knows you cared enough to find out. If the client is unhappy, you have an opportunity to discuss and resolve the concern.”
SOURCES
- Sherri T. Alexander, JD, Shareholder, Polsinelli, Dallas. Phone: (214) 661-5549. Email: [email protected].
- Khaled John Klele, JD, Partner, Riker Danzig, Morristown, NJ. Phone: (973) 451-8451. Email: [email protected].
- Kimberly Castellino Metzger, JD, Partner, McCarter & English, Indianapolis. Email: [email protected].
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