KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Medicare Stops Paying for 10 Reasonably Preventable Medical Errors

Medicare starting Wednesday will no longer pay hospitals for additional care resulting from "reasonably preventable" errors, the New York Times reports. The new regulations, which apply to a list of 10 errors, are expected to affect hundreds of thousands of the 12.5 million hospital stays for which Medicare pays annually. Hospitals also will be banned from charging patients directly for care related to medical errors (Sack, New York Times, 10/1).

Under the rule, Medicare no longer will reimburse hospitals for the treatment of certain "conditions that could reasonably have been prevented." The conditions for which Medicare no longer will reimburse hospitals for treatment include: falls; mediastinitis, an infection that can develop after heart surgery; urinary tract infections that result from improper use of catheters; pressure ulcers; and vascular infections that result from improper use of catheters. In addition, the conditions include three "never events": objects left in the body during surgery, air embolisms and blood incompatibility. The rule was proposed by CMS in April 2007 and mandated by a 2005 law (Kaiser Daily Health Policy Report, 8/20/07).

The move is not expected to result in major reductions in expenses -- $21 million of the program's $110 billion in annual spending on beneficiary care -- but it "carries great symbolism in the Bush administration's efforts to revamp the country's medical payment system," according to the Times. Critics of the current system to reimburse health care providers say it increases costs by rewarding quantity instead of quality of care, the Times reports. Economists anticipate the new rules will help reconfigure the payment system to place greater emphasis on prevention and chronic disease management and also discourage unnecessary treatments.

A Growing Trend
Four state Medicaid programs in the last year have announced that they will not pay hospitals for as many as 28 so-called "never events," or preventable errors. Several large insurers -- including WellPoint, Aetna, Cigna and Blue Cross Blue Shield plans in seven states -- have issued similar rules. At least 20 states also have passed laws requiring hospitals to report mistakes or preventable infections publicly. In addition, CMS requires that hospitals report on 42 quality measures.

Donald Berwick, president of the Institute for Healthcare Improvement, said the new Medicare rule "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." He added, "This whole trend is like a juggernaut, and it is not going to stop."

According to the Times, officials from America's Health Insurance Plans have said some of the errors on the Medicare list might not always be preventable. Nancy Foster, vice president for quality and patient safety for the American Hospital Association, said some errors might not be preventable, such as an injury caused by a malfunctioning device. "Anyone ... always finds it a little provocative to be held accountable for something that is not within their control, especially when you have dedicated yourself to doing the right thing for your patients." She added that strict standards can "set an expectation among patients that staff will be closer to perfect than they actually can achieve."

Peter Lee, executive director of the Pacific Business Group on Health, said, "I don't worry about that 1-in-100 case that can't be avoided because the benefit of not paying for the 99 that shouldn't happen means a far greater focus on avoiding harm. What we want is to encourage doctors and hospitals to get to zero" (New York Times, 10/1).

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