Focus on the Standard of Care
Most states have standard jury instructions or case law precedent establishing the applicable definition of standard of care. Typically, you are required to act, as would a reasonable and prudent member of your specialty, when faced with the same or similar circumstances. You are not required to guarantee patient safety and you are not legally liable for every injury or adverse outcome. Most states hold that hospital policies, Joint Commission standards, and the like are not evidence of the standard that applies in a malpractice case. CMS reimbursement policies should fall into the same category.
Evidence rules also generally prohibit evidence where probative value is outweighed by prejudicial effect. The legal argument is that CMS policy, and the phrase "never event," has absolutely no relationship to the applicable standard of care in a malpractice case. Evidence of CMS "never events" has no probative value whatsoever because it would not help the jury decide a contested issue.
Further, simply permitting the words "never event" to be uttered before the jury would be highly prejudicial. If the court agrees, the tough questions you might be asked in deposition will not be repeated at trial and your actions will be judged in accordance with your state law.
The proper defense to our hypothetical case is that you properly assessed Mr. Smith's physical and mental condition, including his mobility and his ability to comprehend and follow instructions. As he gave every indication of understanding and agreeing with your instruction that he signal for a nurse if he needed to get up from the bed, you met the standard of care.
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Cite this: Brian W. Whitelaw. Your Malpractice Risk When Your Hospitalized Patient Has a "Never Event" - Medscape - Feb 09, 2010.