Never Pay for "Never Events"

CMS proposes to eliminate reimbursements for certain conditions

After pay for performance (P4P) that supposedly rewards providers for good outcomes, now comes the inverse: no pay for poor performance. The National Quality Forum (NQF) has developed a list of 28 "never events" that are not present on admission, develop in the hospital setting and should not have occurred if proper established protocols are followed. Centers for Medicare and Medicaid Services (CMS) has determined that several of these never events should not be reimbursed including foreign object left in a patient after surgery, air embolism, transfusion with incompatible blood, development of stage 3 or 4 decubitus ulcers, physical injury in the hospital (e.g. burn, fall or electric shock) and severe hypoglycemia (proposed).

The basis for these actions is the 2005 Deficit Reduction Act, which instructed CMS to select at least two complications occurring during hospitalization that are either high cost or high volume and that could have reasonably been prevented through application of evidence-based medicine. The hospital would no longer be reimbursed for the costs associated with these complications. CMS took this directive to heart and is executing it with gusto. Rather than coming up with two conditions, they initially came up with eight and less than a year later propose to add nine more. The payment elimination will take place on October 1, 2008.

If CMS stuck to never events, most providers would support such an initiative. Most would agree that a hospital should not be reimbursed for fixing obvious errors such as leaving an instrument inside of a patient at the time of surgery. Refusing payment is a great motivator for hospitals to reduce medical errors that result in patient morbidity and mortality. Of course, eliminating payment for such rare events will achieve minimal savings for CMS and will have minimal financial impact on the hospital. Such events lead to far higher tort payments to the injured patient and loss of patients due to adverse publicity. These other costs provide a far greater incentive for hospitals to eliminate never events than CMS reimbursement reduction.

In search of more significant impact, CMS came up with other hospital-acquired conditions that they would not pay for including catheter-associated urinary tract infections (UTI), vascular catheter-associated infections, and certain surgical site infections (mediastinitis after coronary artery bypass graft surgery). Additionally proposed for inclusion are Legionnaire's disease, iatrogenic pneumothorax, delirium, ventilator-associated pneumonia, deep venous thrombosis/pulmonary emboli, Staphylococcus aureus septicemia and Clostridum difficile infection, methicillin-resistant S. aureus infection and surgical site infections (total knee replacement, laparoscopic gastric bypass and gastroenterostomy and varicose vein stripping).

Not paying for this second set of complications is far more controversial. The risk of these complications can be reduced with proper protocols, but not totally eliminated. Some are unavoidable in the course of treating the patient's underlying condition while others occur due to the patient's associated medical condition such as immunosuppression, debility, diabetes, etc. The cost of the care provided to these patients will have to be paid for somehow. It will probably be partly through cost-shifting to private insurers. Also, as diagnosis-related group (DRG) payment updates are based on hospital cost increases, the costs will be built into overall higher DRG payments. There will also be increased costs as hospitals increase screening tests of patients at the time of admission to establish whether or not they have an occult infection or other abnormality that might become clinically apparent after admission and thus be non-reimbursable. There will potentially be a reluctance to admit high-risk patients or to do high-risk procedures on patients who need them.

Not to be outdone, private insurers have been jumping on the never-event bandwagon. Wellpoint will no longer pay hospitals for any of the 28 never events on the NQF list. Cigna will not reimburse hospitals for some of the never events and is looking at not paying for the CMS-designated hospital-acquired conditions. The Blue Cross and Blue Shield Association and Aetna have also announced plans to stop paying hospitals for never events. Hospitals in 11 states (not in Missouri) have agreed to not bill insurers or patients for never events.


Impact on Physicians
Why should physicians care? How will this impact them? Hospitals can be expected to become far more vigilant in policing their medical staffs and tracking their performance. There will be new protocols introduced to reduce hospital-acquired conditions with physicians playing a key role in their development and implementation. These activities will benefit patient care and should be encouraged. Unfortunately, there will also be less desirable consequences such as increased bureaucratic documentation burden on physicians and medical care dictated by committee or fiat rather than individual patient and doctor considerations.

Since physicians bill under Medicare Part B, they would still get paid for taking care of these hospital-acquired conditions. However, CMS has mentioned in their various notices that ambulatory surgery centers and physician offices might also be included in future non-reimbursement for never-events actions. Of course, most physicians already do not bill patients or insurers for correcting complications secondary to treatments or procedures that they themselves performed. For example, if a patient develops a post-operative infection, I do not bill the patient for taking care of it or if a patient develops a hematoma, I do not bill them for evacuating it. The point here is that the physician and not a government bureaucracy should determine if it is appropriate to bill for the treatment of an untoward outcome.

Another area of concern is the implied liability when a hospital-acquired condition is not reimbursed. Certainly plaintiff's attorneys will look for business among patients with hospital-acquired conditions. If surgery is done on the wrong limb, the liability of the hospital and surgeon is clear and the patient deserves to be compensated. But what about a patient who gets UTI after an indwelling urinary catheter placement, a patient who develops a DVT and pulmonary emboli or a patient who develops a bacterial infection in the hospital? To most physicians, many of these are unavoidable complications. To the patient and his attorney, all of these would be "avoidable" conditions, which in their mind means that someone was negligent and should be made to pay. The physician taking care of these patients will have a big bull's eye on them asking to be sued.

I applaud CMS's attempt to improve patient safety. Money is a strong incentive to reduce avoidable complications. Unfortunately, their program as proposed is overreaching and will have significant unintended consequences which will dilute enhanced patient safety initiatives with increased cost, increased bureaucracy, increased professional liability and interference in the patient-doctor relationship. If you have an opinion on the proposed regulations on the additional nine hospital-acquired conditions, consider sending comments to CMS by the June 13, 2008 deadline.

Resources
National quality forum list of 29 never events can be found at www.qualityforum.org Final rule on non-reimbursement of hospital-acquired conditions: Federal Register 72(162):47200-47218, August 22, 2007.

Proposed rule on non-reimbursement of additional hospital-acquired conditions: Federal Register 73(84):23547-23562, April 30, 2008.

When sending comments on the proposed rule, refer to CMS-1390-P sending one original and two copies to Centers for Medicare and Medicaid Services, Department of Health and Human Services, Attention: CMS-1390-P, PO Box 8011, Baltimore, MD 21244-1850.

PULLOUT
Unfortunately, their program as proposed is overreaching and will have significant unintended consequences which will dilute enhanced patient safety initiatives