Actuary - A person who uses statistics to compute loss probabilities to establish premiums for insurance companies and self-insurance trusts.

Advance directive - Lawful written instruction that describes an individual’s preferences for health care should he or she become unable to express them later. Examples: living wills, power of attorney for health care, advance health care directive.

Adverse drug reports (ADRs) - Known or unknown, undesirable side effect or reaction to a medication. Also, “an unintended act (either an omission or commission) or an act that does not achieve its intended outcome.” (Lucian Leape)

Adverse event - Negative or bad result stemming from a diagnostic test, medical treatment or surgical intervention; an injury resulting from a medical intervention.

Adverse outcome - A clinical outcome that, while neither desirable nor necessarily anticipated, may still have been a known possibility associated with the treatment or procedure.

Age Discrimination in Employment Act, 29 U.S.C. Section 621 et seq. - Federal statute prohibiting certain types of employment discrimination on the basis of age.

Americans with Disabilities Act, 42 U.S.C. Section 12101 et seq. - Federal statute aimed at prohibiting discrimination against individuals with certain mental and physical disabilities in the areas of employment and public accommodation.

Answer - A document filed with the court in response to a complaint or petition. The answer must generally:

1) admit that the plaintiff’s allegations are true

2) deny that the plaintiff’s allegations are true

3) state that the defendant does not have information regarding the truth or falsity of the allegations.

Anti-kickback statutes - Medicare-Medicaid Anti Kickback Statute (42 USC §1320a-7b) - Knowingly and willfully seeking or receiving a bribe, rebate or kickback for a referral for a program, reimbursable item or service.

Appeal - An action that is taken after the trial of a matter, or after a dispositive motion has been entered in a matter. An appeal may be taken for the purpose of correcting an error made by the trial court or to obtain a new trial. Also, a resort to a higher court for the purpose of obtaining a review of a lower court decision and a reversal of the lower court’s judgment or granting of a new trial.

Arbitration - Hearing and determination of a case in controversy by a person either chosen by the parties in opposition or by a person appointed under statutory authority.

Assault - An intentional act that is designed to make the victim fearful and that produces reasonable

Assignment - Act of transferring to another all or part of one’s property, interest, or rights.

At will employment -Can be terminated at any time by either party (employee or employer), for any reason or no reason.

Attorney-client privilege - A legal doctrine recognized by both common and statutory law protecting certain confidential communications between an attorney and his or her client from discovery in a legal proceeding unless the privilege is waived by the client.

Attorney work product privilege - A legal doctrine recognized by both common and statutory law protecting the documents generated, theories devised, legal strategies formulated, etc., by an attorney on behalf of a client from discovery in a legal proceeding unless the privilege is waived by the client.

Autonomy - Right of the patient to self-rule; individual liberty; right to refuse.


Battery - The touching of one person by another without permission.

Becomes aware - A facility becomes aware of an event when the clinical personnel employed or affiliated with a user’s facility learn of a potentially reportable event.

Belmont Report - Statement of basic ethical principles and guidelines for addressing and resolving ethical problems that surround the conduct of research with human subjects.

Benchmarking - Comparative process used by organizations to collect and measure internal or external data that may ultimately be used for the purpose of developing, implementing and sustaining quality improvements.

Beneficence - Taking positive steps to do good.

Benevolent gesture - An action taken to communicate a sense of compassion or compensation arising from humane feelings, when there is no implication (direct or implied) as to “fault” for having contributed to the outcome.

Breach of contract - Failure, without legal excuse, to perform any promise that forms the whole, or part of, a contract. Also, hindrance by a party regarding the required performance of the rights and duties identified in the contr

Boiler and machinery coverage - Provides protection for explosion of boilers and other pressure vessels and accidental damage to equipment.

Business interruption insurance coverage - Insurance coverage typically provided as a part of a property insurance policy covering the lost revenues and extra operating expenses associated with a covered loss such as a fire; attempts to replace revenues lost due to covered loss.


Capabilities - CMS refers to two requirements: 1) physical capabilities and 2) personal capabilities.  Medical facility capabilities Physical space, equipment, supplies and services the hospital provides (e.g., surgery, psychiatry, obstetrics, pediatrics) Staff capabilities Level of care the personnel of the hospital can provide within the training and scope of their professional licenses.

Capacity - The mental ability to make rational decisions.  Also - Ability of the hospital to accommodate the individual requesting examination or treatment of the transferred individual; encompasses such things as numbers and availability of qualified staff, beds and equipment and the hospital’s past practices of accommodating additional patients in excess of its occupancy limits.

Captive - Insurance company established to provide coverage to a sponsoring entity as opposed to marketing and selling policies commercially to insureds; sponsoring entity may be a parent corporation and its related subsidiaries, a professional association or other group.

Case law - Based on judicial precedent rather than statutory law.

Certificate of insurance - A standardized form, usually produced by the insurance agent or broker who arranges the coverage, which evidences the specific type of insurance in place, the insurance carrier, policy period, policy number, etc.

Civil false claims - Enables lawsuits by government or any individual (qui tam relator) against one who submits a false claim to the government.

Claim - Formal notification that monetary damages are being sought for an alleged injury.

Claims-made coverage - An insurance policy covering claims that are made during the policy period and that occurred since the policy retroactive date.

Claims management - A systemized approach to reducing the financial loss and negative community image of a health care organization in situations where prevention fails and injury occurs.

Collective bargaining - Collective bargaining consists of negotiations between an employer and a group of employees so as to determine the conditions of employment. The result of collective bargaining procedures is a collective agreement. Employees are often represented in bargaining by a union or other labor organization.

Common rule (45 CFR 46) - Basic Department of Health and Human Services policy for protection of human subjects that encompasses the human subject protections followed by all federal agencies that sponsor research.

Complaint - One of the initial filings with a court to begin a lawsuit; normally recites all of the allegations against the defendant and theories upon which the plaintiff seeks to recover damages (may be called a petition in some jurisdictions).

Consideration - In contract law, something of value exchanged for the promised performance of the other contracting party. Contracts frequently call for monetary consideration to be exchanged for the promise to provide specified goods or services.

Conditions of Participation (CoPs) - Requirements that hospitals must meet to participate in the Medicare and Medicaid programs.

Contract - Agreement, either written or oral, involving an offer, the acceptance of the offer and an exchange of consideration. Also, an agreement between two or more persons that creates an obligation to do or not to do a particular thing; a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes as a duty.

Corporate compliance - As relates to health care fraud and abuse, any of number of programs and initiatives undertaken by providers to avoid civil and criminal investigations and charges related to improper billing procedures, inappropriate referrals, kickbacks and other prohibited activities under federal statutes such as the Anti-Kickback Act and the Stark I and Stark II amendments to the Medicare Act. Many health care providers have taken corporate compliance programs beyond these specific legislative and regulatory requirements to encompass broader corporate business ethics concerns.

Cost of risk - Value of all risks, internal and external, faced by an organization in fulfilling its mission.

Covered entities (CEs) - Any health care provider who transmits health information in electronic form in connection with a “standard transaction.” Among covered entities are health care providers (hospital, physicians, insurance company, etc.) and health plans (pay for cost of health care), health care clearinghouses (furnish bills or pays for health care services).

Credentialing - Process of verifying and reviewing the education, training, experience, work history and other qualifications of an applicant for clinical privileges conducted by a healthcare facility or managed care organization; typically, performed for independent contractors such as physicians and allied health practitioners who are frequently not employed by the credentialing entity, but who are granted specific clinical privileges to practice.

Common law - Used interchangeably with case law.

Critical paths (CPG) - Clinical pathways, clinical path guidelines and other variants. Also, any of a number of processes employed to define the generally accepted course (or courses) of treatment for a specific medical condition or illness; generally, deviations from the prescribed critical paths must be explained by existing co-morbidities, failure of prescribed treatments, etc.


Damages - Monetary compensation for an injury.

Darling v. Charleston Community Memorial Hospital - Landmark case that determined a hospital has the independent duty to ensure high-quality care is rendered at its facility and is responsible to screen the competency of its medical staff.

Dedicated emergency department (DED) - Must meet one of the following criteria:

1) Licensed as an emergency department

2) Advertises itself as providing emergency care

3) One-third or more of walk-in patients seen for conditions that are considered “emergency medical condition” as defined within the statute.

Deductible - Amount required to be paid by the insured before the insurer will make payment for the eligible loss as stipulated under the insurance contract; typically erodes the maximum benefit provided.

Depositions - Testimony (under oath) of a witness taken upon interrogatories reduced to writing and used to support or substantiate testimony offered at trial.

Direct insurance - A contractual arrangement involving the purchase of insurance by an insured from an insurer.

Directors’ and officers’ liability - D&O policies contain a two-part wrongful act definition: 1) any actual or alleged error or misstatement or misleading statement or act or omission or breach of duty by directors and officers while acting in their individual or collective capacities; 2) any matter claimed against them solely by reason of their being directors or officers of the company.

Discovery - The process in litigation by which each party to the action seeks to learn all the facts that either 1) support the plaintiff’s cause(s) or action, or 2) support the defendant’s asserted defenses or denials.

Drive-through deliveries - Childbirth resulting in short postpartum stay as determined by the managed care organization or other health plan.

Due diligence - Review of an entity targeted for acquisition by the acquiring party to ascertain pertinent information about its financial and operating history and current status. Corporate staff are generally held to the legal standard of having performed the review with due diligence before making a recommendation to the board of directors as to whether to proceed with the acquisition.

Duty to defend - Insurer will defend any claim or suit alleging injury or damage and seeking damages covered under the policy.

Duty to pay damages - Insurer will pay damages covered under the policy retroactive date.


Elder abuse - Single or repeated act or lack of appropriate action, occurring within any relationship where there is an expectation of trust, which causes harm or distress to an elderly person.

Elements of informed consent for research - Include full disclosure of the nature of the research and the subject’s participation, adequate comprehension on the part of the potential subject and the subject’s voluntary choice to participate.

Emergency medical condition (EMC) - Medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in:

1) Placing the health of the individual in serious jeopardy

2) Serious impairment to bodily functions

3) Serious dysfunction of any bodily organ or part or with respect to a pregnant woman who is having contractions:

4) There is inadequate time to effect a safe transfer to another hospital before delivery, or

5) Transfer may pose a threat to the health or safety of the woman or the unborn child

Note: Regulations define “emergency medical condition” to include psychiatric illness including alcohol and drug intoxication. 

Emergency medical services (EMS) - Provision of services to patients needing immediate care. 

Emergency Medical Treatment and Active Labor Act (EMTALA), 942 U.S.C. Section 1395 et seq - Federal statute prohibiting the “dumping” of patients presenting to the hospital with an emergent medical condition or in active labor and limiting a hospital’s ability to transfer them to other facilities. EMTALA specifies when and how a patient may be: 1) refused treatment or 2) transferred from one hospital to another when the patient is in an unstable medical condition.

Employee Polygraph Protection Act, 29 U.S.C. Section 2001 et seq. - Federal statute limiting most employers’ ability to use polygraph testing in applicant screening processes.

Employee Retirement Income Security Act (ERISA) - A comprehensive regulatory system for resolving employee benefit disputes.

Employers’ liability - Any of a number of causes of action related to the employment relationship, but falling outside of workers’ compensation and employment practices liability insurance coverage, including dual capacity claims, spousal claims and third-party over claims.

Employment-at-will - Legal doctrine in most jurisdictions that an employer may discharge an employee for any reason, unless specifically prohibited by law.

Employment practices liability - Any of a number of violations by an employer, based on statute or common law, giving rise to damages outside of those covered by workers’ compensation or similar statutes, including wrongful termination, discrimination and sexual harassment.

EMS system - Comprehensive, coordinated arrangement of resources and functions that are organized to respond in a timely, staged manner to targeted medical emergencies, regardless of cause or the patient’s ability to pay, in order to minimize their physical and emotional impact (National Association of State EMS Directors and National Association of EMS Physicians definition).

Equal Employment Opportunity Commission - Federal agency charged with responsibility for enforcing several federal statutes prohibiting various types of employment discrimination. Under some statutes, administrative hearing procedures before the EEOC must be exhausted before an employee has access to the court system.

Errors and omissions insurance - E&O insurance policies provide coverage for negligent advice or business services provided by an individual or entity not eligible for professional liability insurance coverage, such as medical billing companies, insurance brokers and managed care organizations.

Essential job functions - Under the Americans with Disabilities Act, those functions of a particular job that an applicant must be able to perform, either with or without accommodation, in order to perform the job.

Event - A happening or occurrence that is not part of the routine care of a particular patient or the routine operation of the health care entity.


Failure mode and effects analysis (FMEA) - Systematic process often used by engineers to identify the steps of a process that may be subject to failure, in order to design measures to either prevent or control such failures.

Family Medical Leave Act, 29 U.S.C. Section 2611 et seq. - Federal statute requiring certain employers to provide a period of unpaid leave to employees meeting specified criteria in order for them to receive medical treatment or to provide care to designated family members.

Federal Emergency Management Agency (FEMA) - Independent response organization that reports directly to the President of the United States.

Fiduciary liability - Insurance coverage policy that can be purchased to cover the alleged breach of the fiduciary responsibility under common law or ERISA for individuals who exercise management or administrative responsibilities for employee benefit plans.

First party insurance coverage - Provides coverage for the insured’s own property or person so that the insured will be restored to the same financial position that he or she had prior to the loss.

Food and Drug Administration (FDA) - Federal agency whose responsibility to protect the public health by regulating commerce involving food, drugs, medical devices and the like; is authorized to gather information regarding the safety of medical devices, including adverse incidents attributed to use under the Safe Medical Device Act.

Fraud and abuse - Informal term for the various federal statutes and regulations regarding inappropriate billing, kickbacks, referrals, etc., related to the federal or state Medicare/Medicaid programs.

Futile care - The care which the patient/family demands, but which the clinician has decided is medically unnecessary; the inappropriateness of a potential action to the best interest of the patient.


General liability insurance - Coverage for liability arising out of the hazards of the premises and operations.

Guaranteed cost - Also known as “fixed cost” or “first dollar” programs, which means insurance coverage is provided from the first dollar of loss incurred.


Hard market - Insurance industry characterized by escalating premiums, strict underwriting procedures and limited availability of coverage.

Hazard - A condition that creates or increases the possibility of loss

Hazard analysis - Process of collecting and evaluating information on hazards associated with the selected process; purpose is to develop a list of hazards that are of such significance that they are reasonably likely to cause injury or illness if not effectively controlled.

Health Insurance Portability and Accountability Act of 1996 (HIPAA), 42 U.S.C. Section 201 et seq. - Amendments to ERISA addressing a variety of health care-related issues including fraud and abuse and the portability of group health insurance benefits as well as mandating specific patient privacy protections. A federal law that resulted in the promulgation of several regulations including the HIPAA Privacy Rule.

Hold harmless provision - Contractual clause providing that one party agrees not to pursue a tort claim for vicarious liability against the other; usually found with indemnification provisions and are usually mutual.

Human subject - A living individual about whom an investigator (professional or student) conducting research obtains data through intervention or interaction with the individual, or identifiable private information.


Implied consent - Consent to health care diagnosis or treatment manifested by action or by a silence that raises the presumption that an authorization is given.

Incident - Any happening not consistent with the routine operations of the facility or routine care of a particular patient. Examples: a union strike, a criminal act such as a homicide, or a physical disaster including hurricanes, bioterrorism threats, etc.

Incurred but no reported (IBNR) - Contains two components:

1) an estimate to cover further development of paid losses or known claimants

2) an estimate for the discovery of unknown claimants.

Indemnity - Amount that the insured person is paid for the covered expense.

Indemnification provision - A contractual clause in which one party agrees to accept the tort liability and legal defense of another; usually found with hold harmless provisions and are usually mutual.

Informed consent - Patient’s agreement and understanding to a particular course of treatment based upon full disclosure by the physician of the relevant facts.

Institutional review board (IRB) - Body within a health care organization charged with establishing protocols for and overseeing clinical research trials and human experimentation.  Required for any health care institution that receives federal funding for human research from a department or agency covered by the common rule or that conducts research that is regulated by the FDA.

Insurance - A system by which a risk is transferred to an insurance company, which reimburses the insured for covered losses and provides for sharing of costs or losses among all insureds.

Insured parties - Organization and employees; other organization has agreed to provide coverage.

Integrated Delivery System (IDS) - Health care system made up of various types of providers, including hospitals, ambulatory care centers, surgery centers, home health agencies, physician practices, etc., and frequently a managed care organization, such as a health maintenance organization or a preferred provider organization.


Joint Commission on Accreditation of Healthcare Organizations (JCAHO) - Voluntary nonprofit accreditation body that sets standards for hospitals and other types of health care organizations and conducts education programs and a survey process to assess organizational compliance.

Joint and several liability - A sharing of liabilities among a group of individuals collectively and also individually.

Joint venture - An undertaking by two or more entities to pursue business or other ventures. In many jurisdictions, entities cannot form partnerships; hence they are deemed to be joint ventures; each joint venture may be liable for the debts and obligations of the joint venture.

Justice - Provide what is owed; treat fairly; fair and just allocation of resources within the community being served.



Latent error - Errors in the design, organization, training or maintenance that lead to operator errors and whose effects typically lie dormant in the system for lengthy periods of time.

Lawsuit - Formal legal action filed in court.

Legal health record - Documentation of care provided to an individual in any aspect of health care delivery by health care provider organizations. Legal health record is individually identifiable data, in any medium, collected and directly used in and/or documenting health care or health status. Term includes records of care in any health-related setting used by health care professionals while providing patient care services, for reviewing patient data or documenting observations, actions or instructions.

Lex loci delicti commissi - “Law of the place where the tort was committed.”

Limits (policy limits) - In insurance, the maximum the insurer will pay, typically expressed either per occurrence (occurrence limit) or as an annual aggregate (the maximum insurer will pay for all claims covered under policy).

Life-sustaining treatment - Any treatment that serves to prolong life without reversing the medical condition.

Long-term care services - Range of medical and/or social services designed to help people with disabilities or chronic care needs (Department of Health and Human Services definition).


Managed care - Any of a number of organizations that arrange for the provision of, and payment for, health care services with an eye toward reducing costs through managing access to specific providers.

Maximum medical improvement (MMI) - In workers’ compensation, the point in which the injured employee has recovered to the maximum extent medically expected (also called permanent and stationary, or P&S). When an employee reaches MMI, any residual disability, pain, etc., is expected to be permanent.

Medical emergency - Sudden and/or unanticipated medical event that requires immediate assistance.

Medical screening exam (MSE) - Process required to reach with reasonable clinical confidence, the point at which it can be determined whether a medical emergency does or does not exist applied in a nondiscriminatory manner (i.e., a different level of care must not exist based on payment status, race, national origin, etc.).

Medication administration record (MAR) - Record of all medications ordered and when each has been administered, maintained by nursing staff.

MedWatch form - Required form filed by facilities required to report events, injuries of patients

Minimum necessary - Least amount of PHI disclosed to meet the request and accomplish the intended purpose.


National Labor Relations Act - The main body of law governing collective bargaining, explicitly grants employees the right to collectively bargain and join trade unions; originally enacted by Congress in 1935 under its power to regulate interstate commerce.

National Practitioner Data Bank - Maintained by the federal government containing reports on certain individual practitioners. A report must be made by any entity that pays money on behalf of a practitioner to settle a legal claim asserted against the practitioner. Reports must also be made by hospitals that restrict, suspend or terminate a practitioner’s privileges to examine or treat patients at the hospital.

Non-maleficence - To not harm intentionally.

Nose - Under a claims-made form, this is the period of time between an insured’s retroactive date and the current policy period.

Notice of privacy practices (NPP) - Provided by covered entity (CE) which delineates how CE routinely uses and discloses PHI, provides the rights and responsibilities of the patient, to whom the patient may complain.


Occupational Safety and Health Act/Administration, 29 U.S.C. Section 651 et seq. - Federal statute (and agency created by it) charged with responsibility for promulgating standards and enforcement mechanisms governing worker safety for most industries.

Occurrence coverage - An insurance policy for which coverage is provided for claims which occur during the policy period, regardless of when the claim is made.

Occurrence reporting - Unexpected patient medical intervention, intensity of care or health care impairment. Staff is given clear guidelines and specific examples of reportable incidents or events; e.g., occurrences of missed diagnosis that result in patient injury; surgically related occurrences such as wrong patient being operate on, the wrong site, the wrong procedure or treatment related occurrences; falls; medication-related occurrences, etc.

Occurrence screen reports - Systematic review of medical records/cases (either retrospectively or concurrently conducted) using predetermined screening criteria, conducted to identify cases that may warrant closer performance improvement review. Screeners look for deviations from practice, policy and procedures. Criteria for screens are established in areas that are considered to be high risk, high frequency or problem prone. Example criterion: unplanned returns to the ED within 72 hours of admission or prior treatment for a similar condition.

Office of Civil Rights (OCR) - Office within Department of Health and Human Services which enforces HIPAA Privacy and Security compliance.

Organizational culture - Set of values, guiding beliefs or ways of thinking shared among members of an organization.

OSHA General Duty Clause - OSHA’s general requirement that employers maintain a safe work environment. OSHA inspectors may cite the general duty clause whenever an unsafe workplace condition or work practice is identified, but no specific OSHA regulation applies.

Ostensible agency doctrine - The doctrine of ostensible agency, sometimes referred to as apparent agency, permits a finding of liability on a hospital where there is the appearance of an employment relationship with an independent contractor. In the absence of employer-employee relationship, a managed care organization (MCO) may still be held vicariously liable for the acts of provider physicians if the patient had a reasonable belief that the physician was the MCO’s agent and that this belief was based upon representations made by the MCO to that effect. The burden is on the plaintiff to prove that he or she detrimentally relied on the fact that the MCO held the physician out as its agent.

Office of Civil Rights (OCR) - Office within Department of Health and Human Services which enforces HIPAA Privacy and Security compliance.


Paternalism - A unilateral and sometimes unreasonable decision by health care providers that implies that they know what is best, regardless of the patient’s wishes.

Patient Self Determination Act (42 USC Section 1395 et seq.) - Federal statute requiring certain health care organizations to provide patients with information regarding advance medical directives.

Peer review - Process whereby possible deviations from the standard of patient care are reviewed by an individual or committee from the same professional discipline to determine whether the standard of care was met and to make recommendations for improving patient care processes. Most jurisdictions provide at least a limited protection from discovery in civil actions for peer review activities.

Petition - See entry for complaint

Potentially compensable event (PCE) - Encompasses any incident in which there is neither an active claim nor institution of a formal legal action, including those cases in which an unexpected event has caused injury, the potential for injury or some expression of dissatisfaction or perception of injury.

Protected health information (PHI) - Includes information regarding a patient’s condition and provision of payment (past, present, future).

Prudent layperson standard - Request of the individual will be considered to exist if a prudent layperson observer would believe, based on the individual’s appearance or behavior, that the individual needs examination or treatment for a medical condition.


Quality Improvement Organization - Successor name for PROs (Peer Review Organizations). The Centers for Medicare and Medicaid Services (CMS) administers the Peer Review Organization (PRO) program that is designed to monitor and improve utilization and quality of care for Medicare beneficiaries. The program consists of a national network of 53 PROs (also known as Quality Improvement Organizations) responsible for each U.S. state and territory and the District of Columbia.

Qui tam action - Action under the False Claims Act brought on behalf of the federal government. False Claims Act prohibits the presentation of false claims for remuneration to the federal government.


Regulation - Legislative mandates such as federal and state law; there are others that reflect regulatory requirements, such as government-sponsored programs (e.g., Medicare).

Reinsurance - Contractual arrangement involving the purchase of insurance by an insurer from another insurer.

Res ipsa loquitur - “The thing speaks for itself.”

Research - Activity designed to test a hypothesis, permit conclusions to be drawn and thereby to develop or contribute to general knowledge; also “a systematic investigation, including research development, testing and evaluation, designed to develop or contribute to general knowledge” (45 CFR 46.102(d)).

Reserves - Estimates of the amount ultimately required to settle a claim or pay a judgment (indemnity reserve) and to provide for a defense and pay other allocated expenses related to managing a claim (expense reserve).

Respondeat superior - Law doctrine that says an employer is responsible for the acts of employees if the acts are within the course and scope of their employment.

Right to know - Laws that require employers to provide information, education and/or treatment to employees regarding hazardous materials to which employees maybe exposed during their employment.

Risk - Chance of loss. “Pure” risk is uncertainty as to whether loss will occur; “speculative” risk is uncertainty about an event that could produce loss. Pure risk is insurable; speculative risk usually is not.

Risk analysis - Process used by the person/individuals assigned risk management functions to determine the potential severity of the loss from an identified risk, the probability that the loss will happen and alternatives for dealing with the risk.

Risk avoidance - Decision not to undertake a particular activity because the risk associated with the activity is unacceptable. The only risk control technique that completely eliminates the possibility of loss from a given exposure. This technique reduces the possibility of a loss to zero by the conscious choice not to engage in or avoid a specific activity or operation.

Risk control - Includes techniques to minimize frequency or severity of accidental losses or to make losses more predictable; stopping losses from happening or mitigating the loss. Risk control techniques include avoidance, loss prevention, loss reduction, segregation of loss exposures and contractual transfers designed to protect an organization form legal obligations to pay for others’ losses.

Risk financing - Includes risk management techniques that encompass all the ways of generating funds to pay for losses that risk control techniques do not entirely stop from happening; techniques include risk retention and risk transfer.

Risk identification - Process of identifying problems or potential problems that can result in loss; recognizing the potential for loss.

Risk management - Process of making and carrying out decisions that will assist in prevention of adverse consequences and minimize the adverse effects of accidental losses upon an organization. Also, a systematic and scientific approach in the empirical order to identify, evaluate, reduce or eliminate the possibility of an unfavorable deviation from expectation and, thus, to prevent the loss of financial assets resulting from injury to patients, visitors, employees, independent medical staff, or from damage, theft or loss of property belonging to the health care entity or persons mentioned. The definition includes transfer of liability and insurance financing relative to the inability to reduce or eliminate intolerable deviations. Originally defined by the American Hospital Association as the “science for the identification, evaluation and treatment of the risk of financial loss.” Risk management now also encompasses the evaluation and monitoring of clinical practice to recognize and prevent patient injury.

Risk treatment strategies - Range of choices available to handle a given risk. Treatment strategies include two general categories: risk control and risk financing.

Risk transfer - Transmission of an organization’s risks to an outside party.

Risk retention - Method an organization employs for financing of loss through the retention of the risk.

Root cause analysis - Multi-disciplinary process of study or analysis that uses a detailed, structured process to examine factors contributing to a specific outcome (e.g., an adverse event). Also, a process for identifying the basic or causal factors that underlie variation in performance, including the occurrence or possible occurrence of a sentinel event.


Safety culture - Culture of safety emphasizes blameless reporting, successful systems, knowledge, respect, confidentiality and trust; a culture that looks at the system, the environment, the knowledge, the workflow, the tools and other stressors that may have affected provider behavior.

Sarbanes-Oxley Act (SOX) - Applies to public companies that are required to file periodic Securities and Exchange Commission (SEC) Reports under Sections 12 or 15(d) of the Security Exchange Act of 1934 or if the public company has filed a registration statement that has not yet become effective under the Securities Act of 1933.

Sentinel event - Any unexpected occurrence involving death or serious physical or psychological injury, or the risk thereof.

Single use devices (SUDs) - Devices reprocessed for reuse originally intended for single use.

Soft market - Insurance industry characterized by low premiums, flexible terms and generous capacity.

Stabilized - With respect to an EMC, that no material deterioration of the condition is likely, within reasonable medical probability, to result from or occur during the transfer of the individual from a facility, or, with respect to pregnancy, that the woman has delivered, including the placenta.

Standard of care - In medical malpractice cases, a standard of care is applied to measure the competence of the professional. The traditional standard for doctors is that they exercise the average degree of skilled care and diligence exercised by members of the same profession, practicing in the same or similar locality in light of the present state of medical and surgical science. With increasing specialization, however, certain courts have disregarded geographical considerations holding that, in the practice of a board certified medical or surgical specialty, the standard should be that of a reasonable specialist practicing medicine or surgery in the same specialty. In a legal proceeding, the standard against which the defendant’s conduct is measured. The defendant is expected to act as an ordinary, prudent person with similar training and skill would have acted in a similar situation. If the defendant’s conduct falls below this standard, the defendant may be determined to have acted negligently.

Stop loss coverage - Provider excess coverage that is usually structured to insure excess claims.

Summons - A notice to the defendants named in a complaint indicating an action has been filed against them and that they are required to answer by a specific date and at a specific place.

Surrogate - One who legally stands in place of another.


Tail - An extended reporting period whereby a claims-made policy is essentially converted to an occurrence policy by extending coverage to all claims that arise from the care rendered during the policy period regardless of when the claim is reported.

Telemedicine/telehealth - The use of telecommunications to provide medical information and services. Also, the provision of health care consultation and education using telecommunications networks to communicate information; medical practice across distance via telecommunications and interactive video technology (American Medical Association’s Council on Medical Education and Medical Services). Also, the use of electronic information and communications technologies to provide and support health care when distance separates the participants (Institute of Medicine).

Third-party administrator - An independent organization that contracts to provide claims management services to a self-insured entity.

Third party insurance coverage - Provides coverage to a party other than the insured to make that person whole for loss or injury covered by the insured; involves three parties.

Third-party over claim - A claim by an injured employee against a party other than his or her employer, such as the manufacturer of a machine involved in the injury, in which the third party brings in the employer as an additional defendant, such as for failure to properly maintain the machine. Third-party over claims are a type of claim by an injured worker against his or her employer that fall outside of workers’ compensation coverage and are generally covered by employers’ liability policies.

Tort - Private or civil wrong or injury for which the court will provide a remedy in the form of an action for damages.


Uninsured parties - Actual or potential codefendants not covered by the organization.

U.S. Patriot Act of 2001 - Federal legislation (H.R.3162) that enhances the ability of law enforcement to deter and detect acts of terrorism, including cyber-intelligence gathering, wire-tapping and other means of gathering needed information from designated privacy records.


Vicarious liability - Imposition of liability on one person for the actionable conduct of another, based solely on a relationship between the two persons. Indirect or imputed legal responsibility for the acts of another, e.g. the liability of an employer for the acts of an employee; a principle of torts and contracts of an agent.

Vulnerable subjects - Human subjects are considered vulnerable and require special considerations if there are legitimate concerns about competency to understand information presented to them and make reasoned or informed choices; populations include children, pregnant women, prisoners, those with psychiatric, cognitive and developmental disorders and substance abusers.


Whistle-blower - Individual, frequently an employee or former employee, who reports unlawful activity, such as health care fraud and abuse or OSHA violations, to the government or an administrative agency. Some statutes provide for the whistleblower to receive a share of fines levied against the organization for making the report. Most statutes prohibit retaliatory discharge or other discriminatory actions against an employee who makes such a report.

Workers’ compensation - Program that provides protection to workers who are injured while engaged in the business of their employer. Statutory limits of coverage are set by each state.