Risk management

✅ Reviewed for accuracy and relevance by Deanna Cooper Gillingham, RN, CCM, FCM on July 24, 2025.

CCMC Glossary of Terms Related to Risk Management

Health and Human Services Risk Management: The science of the identification, evaluation, and treatment of financial (and clinical) loss. A program that attempts to provide positive avoidance of negative results. 

Insurance Risk Management: A comprehensive program of activities to identify, evaluate, and take corrective action against risks that may lead to patient or staff injury with resulting financial loss or legal liability. This program aims at minimizing losses.

Root Cause Analysis: A process used by healthcare providers and administrators to identify the basic or causal factors that contribute to variation in performance and outcomes or underlie the occurrence of a sentinel event.

Risk Management

Risk management utilizes strategies to reduce the incidence of organizational loss. These activities can be proactive, to prevent adverse occurrences, or reactive; think damage control. In both cases the risk management process includes:

  • Identifying risk or potential risk
  • Calculating the probability of an adverse effect from the risk
  • Estimating the impact of the adverse effect
  • Control of the risk

Proactive risk management helps to improve the quality of patient care, reduce the probability of an adverse outcome and decrease the likelihood of a malpractice claim. Reactive risk management looks into claims that have occurred for issues that need intervention. The goal of risk management is to reduce adverse events, decrease malpractice claims and minimize financial loss.

Case Management Malpractice Risk Management

Case managers are at risk for malpractice. A malpractice suit can arise from an act of omission, failure to do something that should be done, or an act of commission, doing something that should not be done. Either of these is a breach of obligation. 

The plaintiff, person bringing forth the claim, has the burden of proving two points. The first is that the case manager was negligent. The second is that injury resulted from the negligence.

There are several steps a case manager can take to reduce the risk of a malpractice suit:

  • offer the patient several choices of providers
  • use only credentialed providers
  • communicate with the patient and address concerns
  • document all communications with the patient and others involved in care and decision making
  • do not alter records
  • be consistent in decision making
  • document compliance or lack of compliance with treatment plan
  • be aware of and comply with professional standards and regulations

Negligent Referral

A negligent referral is a referral of a patient to a provider who is known to be unqualified. Even if the case manager is unaware that the provider is unqualified, they can still be held liable. This is because it is expected that a reasonably prudent case manager would make sure the healthcare provider they are referring to is professionally qualified and without physical or mental impairment that could result in harm to the patient.

This article shares a portion of the information covered on this topic in CCM Certification Made Easy, 4th Edition by Deanna Cooper Gillingham, RN, CCM, FCM (2025). For more details on this topic and related concepts, purchase your copy at CCMCertificationMadeEasy.com.