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Medicare to Stop Paying for Hospital Errors
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By Walter Eisner
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August 23, 2007
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Starting October 1, 2008, Medicare is implementing a new rule under which it will no longer pay for hospital errors that it says could reasonably have been prevented. The Bush administration estimates the new policy will save Medicare $20 million a year. The New York Times reported that private insurers are considering similar changes and consumer groups are welcoming the change. Hospital executives endorsed the goal of patient safety, but said the policy would require them to collect large amounts of data they did not now have. They worry that they'll end up paying for those tests because Medicare pays them a flat amount for each case. The new policy identifies eight conditions, including three serious types of preventable incidents sometimes called "never events” that Medicare will no longer pay for. Those conditions are: objects left in a patient during surgery; blood incompatibility; air embolism; falls; mediastinitis, which is an infection after heart surgery; urinary tract infections from using catheters; pressure ulcers, or bed sores; and vascular infections from using catheters. Medicare said it also would work to add three more conditions to the list next year. “If a patient goes into the hospital with pneumonia, we don’t want them to leave with a broken arm,” said Herb B. Kuhn, acting deputy administrator of CMS. The Centers for Disease Control and Prevention estimates that patients develop 1.7 million infections in hospitals each year, and it says those infections cause or contribute to the death of 99,000 people a year. The Times article said that Susan M. Pisano, a spokeswoman for America’s Health Insurance Plans, a trade group, said, “Private insurers will take a close look at what Medicare is doing, with an eye to adopting similar policies.” Congress gave CMS the power in 2006 to prevent Medicare from giving hospitals higher payment for the extra costs of treating a patient when infections and other preventable conditions occur during a hospital stay. Hospitals are to begin reporting secondary diagnoses present on the admission of patients starting with discharges on October 1. Then, one year later, cases with these conditions would not be paid at the higher rate unless they were present on admission, the agency said. Hospitals may not be the only group in Medicare's crosshairs. A New York Times editorial commented on the new rules and said, "One element missing from the initial steps is any penalty for the doctors who commit some of the errors. The hospital loses any extra payment for a second operation to retrieve an object left behind the first time, which seems appropriate given that nurses are supposed to keep track of all instruments and sponges. But an errant doctor, who may also be culpable, can get paid for operating again. In future years, Medicare needs to consider reforms in physician payments as well."
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