This course is available on-demand here: or as part of our Recovery Residence Administrator Training Program

What is Risk
~    The combination of the probability of an event and it’s consequences
Benefits of Risk Management
~    Provides a framework for consistent, quality services
~    Improves decision making, planning and prioritization
~    Contributes to efficient use/allocation of resources
~    Protects and enhances assets including reputation
Types of Financial Repercussions
~    Suits against the agency for:
~    Medical bills
~    Lost wages / earning capacity
~    Pain and suffering
~    Emotional distress and loss of ability to enjoy life
~    Property damage
~    Wrongful death
~    Punitive damages if there was negligence
~    Loss of funding
~    Loss of license
~    Loss of reputation (client base)
Classifying Risk
~    Consequences
~    High: Financial impact is likely to exceed Z;  Significant impact on the organizations ability to operate.
~    Medium: Financial impact is between Y and Z and will have a moderate impact on operational abilities (layoffs?)
~    Low: Financial impact is less than Y and will have a low impact on ability to operate.
~    High: 25% chance it will happen in a 12-month period
~    Medium: 25% change it will happen in a 10 year period
~    Low: Less than 2% chance of occurrence or Not likely to occur in a 10 year period
Multiple Types of Risk
~    Strategic and Financial  (Keep $$ coming in)
~    Organizational Objectives
~    Cash Flow
~    Service Market
~    Legal and Regulatory Issues
~    Employee Risk (Maintain Efficient Workforce/Reduce Turnover)
~    Workers Compensation
~    Termination
~    Burnout
~    Injury or Victimization

Types of Risk cont…
~    Technology Risk (Regulatory and Legal Compliance)
~    HIPAA/HITECH compliance
~    Meaningful use
~    Data Breach
~    Disaster (Data failure)
~    Patient Safety Risk Management (Regulatory and Safety Compliance)
~    Physical Environment
~    Interpersonal
~    Client/Client
~    Client/Staff
~    Destabilization

Common Suits Against Therapists for Patient Safety Issues
~    Boundary violations
~    Inappropriate or excessive self-disclosure
~    Dual Relationships
~    Using techniques without proper training (or licensure)
~    Deliberately using incorrect diagnosis to get insurance coverage or other funding
~    Inadequate documentation (paybacks)
~    Wrongful death
~    Breach of confidentiality

Common Suits Against Agencies
~    Sexual Harassment
~    Environment of Care (Safety)
~    Improper billing practices
~    Billing for services not provided
~    Unbundling
~    Waiving copays and deductibles
~    Therapist malpractice
~    Wrongful termination / Civil rights
General Questions
~    Based on information provided from other resources, managers should conduct analyses to determine potential risks. The analysis should identify:
~    What could possibly happen?
~    How likely is something to happen (measuring risk)?
~    How severe will the outcome be if something did happen?
~    How can the likelihood something will happen be mitigated on the forefront?
~    What can be done to reduce the impact (and to what degree)?
~    What is the potential for exposure or what cannot be proactively avoided?

Example: Slip and fall inside; slip and fall on stairs leading into the office
Risk Analysis
~    A systematic approach to evaluating risks to business operations and patient safety
~    Start with one area, i.e. Environment of Care.
~    Identify all possible risks based on personal knowledge and historical research
~    Classify risks based on probability and consequences
~    Develop a plan to address/remediate risk
~¬†¬† ¬†Ensure a budget for ‚Äúrisk funding‚ÄĚ
~    Ensure all individuals are aware of their responsibility for risk reporting and management
~    Regularly audit for risk management compliance
~    When an event occurs, review whether risk management policy mediated risk.
Policies and Risks They Address
~    Agency has a written code of ethics
~    Staff/Client environment of care
~    Agency carries general liability insurance
~    Personal injury
~    Damage to property (Client’s or Act of God)
~    Comply with State and Federal guidelines and the guidelines of payors
~    Financial Risk (fines/closing/criminal charges/loss of funding)
~    Reputation
Policies and Risks
~    Clearly identify staff qualifications and their duties
~    Environment of care (reduce frustration, grievances and abuse reports)
~    Support guidelines for termination
~    Ensure environment is free of alcohol and drugs via policy, possibly including contraband search and random drug screens
~    Drug free workplace/Worker’s compensation
~    General liability
~    Client relapse/overdose
~    Needle sticks

Policies and Risks
~    Collect and report accurate process and outcome data (intakes, length of stay, successful completion, unsuccessful terminations, AMAs)
~    Reputation/Strategic Positioning Agency and the Field
~    Funding
~    Accounting system documents all monies owed, billing, payments
~    Policy to address nonpayment of fees
~    Cash flow
~    Ethical complaints/reputation
~    Prevent client abandonment

Policies and Risks
~    Client rights and emergency procedures (i.e. fire) posted in a conspicuous location
~    Reputation
~    Regulatory compliance
~    All staff certified in CPR and First Aid
~    Reputation
~    Regulatory compliance
~    Staffing Plan
~    Regulatory compliance (staff to client ratio)
~    Continuity of care
~    Clear description of admission criteria for each program including diagnosis, age, disqualifying issues (medical, criminal)
~    Safe environment of care for current clients
~    Defense against discrimination suits

Policies and Risks
~    Appropriate intake processes
~    Ensure a safe and supportive environment of care
~    Provides referrals as needed to ensure client stabilization
~    Client data is stored in compliance with HIPAA and HITECH regulations
~    Continuity of care
~    Regulatory compliance
~    Reputation
~    Orientation process for new clients
~    Communicates rights and responsibilities to ensure a safe environment

Policies and Risks
~    Handling missed appointments
~    Client destabilization/suicidality
~    Client dissatisfaction/reputation
~    Termination due to client drop out
~    Prevent complaint of abandonment
~    Prevent liability for suicide
~    Ensuring medication compliance
~    Ensure client stabilization
~¬†¬† ¬†An unclean environment can be considered breach of duty if a patient contracts an illness‚ÄĒmore applicable to group homes, residential and hospitals
~    Personal injury liability
~    Reputation of the agency and the Field

Policies and Risks
~    Agency should have a disaster response policy to maintain continuity of care in the event of a data failure or physical disaster (flood, sink hole, tornado)
~    How to access data at the remote location
~    Where clients are to go to receive treatment in the event of a physical disaster / displacement
~    Policy to address handling clients or potential clients in crisis if the therapist is out sick.
~    Policy to refer clients if the agency or a program therein should shut down
Did you know…
~    Health and safety inspections should include refrigerator temperature monitoring every week
~    A MSDS book should be on the premises and include data on all hazardous chemicals stored there.
~    Facilities are required by HIPAA to store data backups in a secure location in the event of local data failure
~    Many states have regulatory limits on client to staff ratios and guidelines for the number of sq. ft per client.
~    Level of Care Guidelines inform the agency what services must be provided to prevent possible paybacks and termination of provider contracts
~    To be effective, risk analysis surveys must be completed regularly and updated as the organization changes (i.e. addition of a new program)

More things to be aware of…
~    Employees should complete a training on emergency procedures (fire, flood, power outage, severe weather etc.) annually
~    It is a good idea to consider having a policy which clients sign regarding suspected drunk driving and/or attending treatment under the influence
~    Social networking and internet data (client or employee) has been used in legal cases and can significantly damage a company’s reputation…
~    Facebook
~    Instagram
~    Yelp
~    Google places
~    Health grades

~    Risk Management involves not only professional and ethical risk, but also managing the risks at your facility.
~    Risks can come in the form of:
~¬†¬† ¬†Causing harm (directly or indirectly‚ÄĒLaw suits, reputation)
~    Breaking the law (criminal and or civil fines and punishments; reputation)
~    Violating regulatory codes (Temp/permanent shut down)
~    Failure to plan/adapt to funding changes (Loss of cash flow)
~    Effective risk management occurs regularly (at least annually) and is updated with agency changes or addition of new programs
~    Effective risk management reduces monies required for non-mission oriented purposes, manages reputation and prevents financial catastrophe.