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Beginning Oct. 1, governmental insurance heavyweight Medicare will stop paying hospitals for extra care related to 11 types of “hospital-acquired conditions.”
Expanded from eight types of medical errors and infections, Medicare’s no-pay list now includes problems related to poor control of blood sugar, blood clots after total hip and knee replacement surgery and surgical-site infections after certain elective procedures such as bariatric surgery. Medicare forbids hospitals from charging patients for this care.
The decision to expand Medicare’s no-pay list before the original policy takes effect angered many in the medical community who believe some conditions – like surgical-site infections – aren’t entirely preventable.
Proponents say the measure will force hospitals to do more to prevent errors and infections that will save patient lives and reduce cost. But opponents question the effectiveness of Medicare’s targeted approach and say any extra cost absorbed by providers will only be shifted to consumers.
CMS estimates the provision, which stems from the Deficit Reduction Act of 2005, will save Medicare $21 million in each of the next three fiscal years and $22 million in each of the two years after that. But that’s a tiny fraction of what the governmental insurance program pays out. Medicare budgeted $413.3 billion for benefits in fiscal year 2009, including $126.4 billion to hospitals for inpatient care and $22.6 billion to hospitals for outpatient care.
“These quality measures are not about savings,” CMS Acting Administrator Kerry Weems said in a conference call with reporters late last month. “This is about changing hospitals and making them safer places.”
CMS sent letters July 31, when it announced its expanded no-pay list, encouraging state Medicaid directors to follow its lead. Nearly 20 states have or will consider eliminating payment for “never events” such as leaving a sponge in a patient after surgery.
When Medicare’s rule takes effect, hospitals won’t be able to charge Indiana Medicaid for care associated with Medicare’s no-pay rule on patients dually covered by the two programs, said Dr. Jeff Wells, Indiana Medicaid director. About 130,000 beneficiaries are dually covered by Medicare and Medicaid in Indiana.
Wells said that Indiana Medicaid plans to begin withholding payment for certain medical errors and infections for all Medicaid patients in 2009. He said the insurance program will work closely with the Indiana State Department of Health and health care providers to develop fair policy that puts patient safety first.
He acknowledged that there is some debate about what’s preventable, but Medicaid won’t shy away from the fray. Today, Medicaid errs in favoring reimbursement if conditions may be considered preventable, Wells said.
“Maybe where there is some subjectivity, we ought to err on the side where there is a stronger disincentive,” he said.
Private insurers, too, are moving toward withholding reimbursement related to medical errors and infections. Some are already there.
Since 2005, Minnesota-based HealthPartners Inc. has withheld payment from health providers for more than two dozen serious errors considered preventable. Company officials say it was the first insurer to do so. The move by the non-profit HMO followed a Minnesota state law – the first of its kind – that hospitals report those errors. Indiana started requiring this of hospitals in 2006, following an executive order by Gov. Mitch Daniels in 2005.
HealthPartners’ no-pay list comes from the National Quality Forum’s list, which was developed by the organization to improve the quality of health care in the U.S. Events such as a foreign object left in a patient after surgery are included in Medicare’s own provision, which also referenced the National Quality Forum list.
Since Medicare published its no-pay list, many other private insurers have also made the move. Indianapolis-based WellPoint Inc. – the largest health-benefits firm in the country –announced plans in April to roll out the first phase of its no-pay policy that includes 11 adverse events.
It forbids providers from charging for surgery performed on the wrong body part or the wrong patient or the wrong surgery performed on a patient.
In addition, the insurer won’t reimburse extra charges for treating catheter-associated urinary tract infections and incompatible blood transfusions along with other conditions on Medicare’s list.
The changes will help protect WellPoint’s 35 million members from additional payments resulting from these errors, the company said. WellPoint will consider adding the same hospital-acquired conditions CMS recently added to its no-pay list, spokesman Tony Felts said Friday.
Locally, hospital officials don’t expect such reimbursement policy changes – specifically Medicare’s – to have a significant effect on patient care or finances. They say safety is already a top priority.
“We have lots of reasons to do the right thing and this is low on the list,” said Dr. Mike Schatzlein, chief executive officer at Lutheran Health Network. “I personally don’t think the government needs to use a stick to get doctors and hospitals to do things right.”
Like the American Medical Association, Schatzlein doesn’t believe that everything on CMS’ list of “never events” is entirely preventable.
One example: mediastinitis, an infection of the area between the lungs, after coronary bypass surgery.
Schatzlein, a former heart surgeon, said doctors jump through every hoop they can to prevent mediastinitis. But it sometimes happens.
“I don’t know of any experienced heart surgeon that’s never had this happen,” he said. Schatzlein, who performed the area’s first heart transplant in 1985 and led a team that developed Lutheran Hospital’s heart transplant program, included himself among that group.
Still, he understands the consumer appeal of pushing for zero errors. He said hospitals in Fort Wayne put improving safety above everything, even competition, with Lutheran Health Network and Parkview Health comparing notes on safety improvements.
Like Schatzlein, Mike Packnett, CEO of Parkview Health, thinks Medicare’s no-pay list will have little effect on patient safety at the system’s hospitals. Even so, he said Parkview supports a payment system that includes a financial penalty for a clear-cut preventable error.
In February, the Indiana Hospital Association board adopted a policy that said hospitals shouldn’t seek payment for medical costs associated with 12 adverse events. Those include death or serious disability associated with a medication error and surgery performed on the wrong body part, among others. Lutheran and Parkview officials said they support and will follow the hospital association’s policy.
The hospital association’s policy deals with the eight adverse events on Medicare’s list – from bed sores to objects errantly left inside patients – and others such as surgery performed on the wrong patient.
Still, Packnett questioned the inclusion of some of the events on Medicare’s expanded no-pay list. For one, blood sugar could be hard to control under certain circumstances, such as emergency surgery involving a brittle diabetic patient whose blood sugar fluctuates widely, he said. And he anticipated the administrative time and human resources spent determining whether a condition was present on admission (thereby precluding it from non-payment by Medicare) would be “considerable.”
Although the number of hours was undetermined, he said that it wouldn’t have a significant financial effect on the hospital. Even with the extra attention, he said, it’s possible a condition on Medicare’s list could be present on admission, go undetected and later be blamed on the hospital.
Officials from both hospital systems said such conditions are rare and wouldn’t directly drive up costs.
They don’t occur often enough to require large systems like Lutheran Health Network to charge more for other services or take other cost-shifting measures that would affect patients, according to Schatzlein.
But “they would play a role with indirect costs,” Parkview spokesman John Perlich said in an e-mail, “such as prevention and early detection, that ultimately become a factor in how prices are set.”
mschroeder@jg.net
