Medicare Will No Longer Pay for Hospital Errors

Yesterday, Medicare implemented a new policy in which it will not pay hospitals for any costs related  that <"">medical errors that injure patients while they are in a hospital’s care.  Medicare provides coverage for the elderly and disabled.

Medicare put 10 “reasonably preventable” conditions on its initial list, saying it will not pay for mistakes that include when patients receive incompatible blood transfusions, develop infections after certain surgeries, or must undergo a second operation to retrieve a sponge left behind from a first surgery.  Also, serious bedsores, injuries from falls, and urinary tract infections caused by catheters are included in the policy’s first iteration of the list.  The new policy also prevents hospitals from billing patients directly for costs generated by such hospital medical errors.

Officials believe the new regulations could apply to several hundred thousand hospital stays of the 12.5 million people covered annually by Medicare.  Medicare is the largest insurer in the country and its decision to refuse payment for these preventable conditions has prompted others in the public and private sectors to adopt similar standards.  For instance, in the past year, four state Medicaid programs announced that they will not pay for as many as 28 “never events”; the programs include New York.  Some large insurers have followed suit including WellPoint, Aetna, Cigna, and Blue Cross Blue Shield plans in seven states and so have some state hospital associations.  “Never events” are so called because they represent situations that are not supposed to have ever happened.

The Congressionally-mandated Medicare measure is not expected to generate large savings—$21 million annually, versus $110 billion spent on inpatient care in 2007.  “This is a specific case of the larger pay-for-performance trend, the idea that you should pay more for quality than lack of quality, or in this case pay less for defects,” said Dr. Donald M. Berwick, president of the Institute for Healthcare Improvement. “This whole trend is like a juggernaut, and it is not going to stop.”

Regarding pay-for-performance, Medicare now grants bonuses to those doctors and hospitals that report quality measures and is looking at rewarding physicians who follow protocols for diabetes, coronary artery disease, and congestive heart failure treatment.  Also, the Medicare Payment Advisory Commission, an arm of Congress, recently recommended reducing payments to hospitals with high readmission rates.

“Historically, there’s been some acceptance that these things happen,” said Brock D. Nelson, the hospital’s president. “We’ve come to now accept that they’re avoidable. And that’s a sea change.”  Some improvements have been technological, such as an electronic prescribing system that has worked to reduce medication errors by half.  Nontechnological efforts include diligent hand-washing, nurses being trained to provide more patient information during shift changes, and high-risk medications—such as heparin—being marked with pink labels to help prevent mix-ups.  Heparin has made the news on a number of occasions recently for massive dosing errors occurring as a result of similar packaging for its different dosage vials.

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