Medicare to stop paying for 'preventable' errors.

In a continuing effort to link payments to quality, Medicare will soon stop paying hospitals for certain conditions and infections acquired after admission.

The change was mandated by Congress under the Deficit Reduction Act and will go into effect in October 2008. Starting this month, hospitals will be required to report on secondary diagnoses that are present at the time of admission.

Officials at the Centers for Medicare and Medicaid Services have identified eight "reasonably preventable" events that can be avoided in most cases by engaging in good medical practice. Hospitals will not receive additional payments for these secondary diagnoses if they develop after admission: pressure ulcers; an object left in the patient during surgery; air embolism; blood incompatibility; catheter-associated urinary tract infections; vascular catheter-associated infections; mediastinitis after coronary artery bypass graft surgery; and falls.

CMS officials will consider adding three other hospital-acquired conditions next year: ventilator-associated pneumonia; Staphylococcus aureus septicemia; and deep vein thrombosis/pulmonary embolism.

Under the new policy, the costs cannot be passed along to patients. However, hospitals will not bear the total financial risk of these cases because the payment policy will not affect Medicare's high-cost outlier policy. CMS will continue to use the hospital's total charges for all inpatient services provided during a patient's stay when determining whether the case qualifies for an outlier payment.

The hospital-acquired conditions policy was issued as part of the Medicare acute care hospital inpatient prospective payment system final rule, which was published in the Federal Register on Aug. 22.

The move was applauded by payers and quality advocates, but hospitals and physicians raised some red flags about the change.

In a June 12 letter to CMS, the American Medical Association voiced concerns that the policy could have "significant unintended consequences for patients."

"The concept of not paying for complications that are often a biological inevitability regardless of safe practice is discriminatory and could be punitive to those patients at the greatest risk," wrote Dr. Michael D. Mares, executive vice president and CEO of the AMA. "Certain patients, including those that are older, have medical comorbidities, or have otherwise compromised immune systems, are more susceptible to infection and other complications."

These types of patients already have difficulty accessing care, and the CMS policy could increase the barriers, Dr. Maves wrote.

"'This is an idea that makes sense to bean counters," said Dr. Joel Schlessinger, president of the American Society of Cosmetic Dermatology and Aesthetic Surgery.

While improving infection control in the hospital is essential, the new policy is impractical, he said. Even when appropriate precautions are put in place, not all serious infections can be prevented in the hospital. Dr. Schlessinger also objected to the punitive nature of the Medicare policy.

Although the CMS focus on quality and patient safety is laudable, agency officials are overreaching with their list of conditions, said Dr. Junaid Khan, a cardiothoracic surgeon in Oakland, Calif.

For example, surgical site infections are a significant problem, but it's unlikely that they can be eliminated even with proper adherence to guidelines, he said, adding that a more global approach would be more useful at identifying systems issues and improving patient safety

The American Hospital Association supports the inclusion of only three of the conditions outlined by CMS (an object left in during surgery, air embolism, and blood incompatibility).

However, there are concerns about whether the other conditions are always or even usually preventable, even with excellent care, said David Allen, an AHA spokesman.

Preexisting conditions also are of concern. For example, if a person presents to the emergency department with shortness of breath, the physician may not test for a urinary tract infection, he said.

But the Medicare policy shift was welcomed by health plans and some quality advocates.

The announcement by CMS is consistent with the move to pay for quality, said Susan Pisano, a spokesperson for America's Health Insurance Plans. The new policy provides an incentive for hospitals to develop processes to avoid these conditions, she said.

Officials at the National Committee for Quality Assurance (NCQA) also favor the policy change. "If we can't say no to the wrong kinds of care, it going to be virtually impossible to say yes to the right kinds," said Jeff Van Ness, a spokesman for NCQA.

The CMS policy sends a "loud and clear signal" to hospitals that they must pay attention to these preventable events, said Rachel Weissburg, a program associate at the Leapfrog Group, a coalition of employers focused on health care quality and transparency.

In fact, officials at the Leapfrog Group would like to see CMS expand the list of hospital-acquired conditions to include the 28 serious reportable events--rare medical errors that should never happen to a patient--which have been compiled by the National Quality Forum.

The Leapfrog Group launched a project last year to encourage hospitals to develop plans to avoid these serious reportable events.

In its 2007 Quality and Safety Survey, the group offered hospitals public recognition if they agreed to take four actions following a serious reportable event: offer an apology to the patient or family; report the event to a recognized reporting agency, perform a root-cause analysis, and waive all costs directly related to the event.

BY MARY ELLEN SCHNEIDER

New York Bureau

Minnesota Plan Could Become Model

Private payers are watching with interest to see how Medicare implements its new policy of withholding payment for certain hospital-acquired conditions and infections.

But at least one health plan has already launched a similar program with its affiliated hospitals. HealthPartners Inc., a Minnesota-based health plan. stopped paying hospitals for charges associated with serious adverse events. or so-called "never events," starting in January 2005.

The move was designed to build on quality-reporting efforts within the state. In 2003. Minnesota began requiring hospitals to report on 27 never events identified at that time by the National Quality Forum (NQF). The NQF currently lists 28 serious adverse events as never events, meaning that they should never occur in the hospital. For example, the list of never events includes surgery on the wrong body part or person, an infant discharged to the wrong person, and patient death or disability associated with contaminated drugs or devices.

Under the Minnesota reporting law, hospitals must report these events, investigate the underlying cause, and take corrective action.

HealthPartners took this a step further by saying that they would not pay for additional costs resulting from never events, and prohibited hospitals from billing the plan's members.

Since its launch in 2005, the program has been a national model, according to Babette Apland, senior vice president for health and care management at HealthPartners. Officials from the plan have consulted with the Leapfrog Group and the Medicare Payment Advisory Commission.

There was some controversy around the HealthPartners policy when it was first implemented, but hospitals quickly got on board, Ms. Apland said.

These never events are rare, so the savings to the health plan for withholding payment has been negligible, Ms. Apland said. Instead, the program's aim was to provide hospitals with an incentive to systematically prevent these events.