Medicare To Deny Reimbursement For Medical Errors: The Blame Game

August 19th, 2007

http://posts.blogcarnival.com/page.php?p=80628

Robert Pear of the NYT reports that CMS is going to cease reimbursing hospitals for services that are provided as a result of errors, such as hospital-acquired infections and decubitus ulcers (commonly known as bed sores).

In a significant policy change, Bush administration officials say that Medicare will no longer pay the extra costs of treating preventable errors, injuries and infections that occur in hospitals, a move they say could save lives and millions of dollars.

The for-profit private healthcare insurance and HMO industry is smacking its lips in anticipation of being able to get a shirttail death grip on this policy and be able to deny yet more claims for reimbursement.

Private insurers are considering similar changes, which they said could multiply the savings and benefits for patients.

Under the new rules, to be published next week, Medicare will not pay hospitals for the costs of treating certain “conditions that could reasonably have been prevented.”

In addition, Medicare says it will not pay for the treatment of “serious preventable events” like leaving a sponge or other object in a patient during surgery and providing a patient with incompatible blood or blood products.

Preventable errors account for tens of thousands of preventable deaths, not to mention prolonged and inhibited recovery times, increased use of healthcare services and resources and preventable suffering for patients.

This new development is somewhat suspicious in its timing, as reimbursement rates for physicians were expected to be cut by up to 10% without an intervention in S-CHIP funding expansion. And on a related matter, the Mental Health Parity Bill, SB 558, was all set to be voted upon when at the veritable last minute before the Senate recessed, Jim DeMint R-SC put a hold on the bill. Passing SCHIP funding expansion along with the Mental Health Parity Bill would have stopped physician reimbursement cuts and would have instead, created modest increases in physician reimbursement to cover inflation rates and would have aligned mental health services within the overall framework of healthcare funding and reimbursement.

While minimizing and eliminating sources of medical error are critical to a sound healthcare system, denying reimbursement to hospitals when they occur is punitive, and it begs the question: who will pay for the resources needed to address the errors?

Most likely, it will be the unfortunate patients who suffer the consequences of these errors with hospital-acquired infections, wrong-site surgeries, blood transfusion reactions, fractures from falls, and burns and other types of injuries from faulty hospital equipment and inadequate staffing.

This will lead to even more defensive healthcare practices, another ramping up of litigation as patients attempt to hold others accountable for the costs incurred due to errors, and hospitals and physicians acting in increasingly adversarial positions to patients so that blame doesn’t fall on them when the musical chairs tune stops abruptly with patient errors.

The Institute for Healthcare Improvement has worked diligently to provide online, immediately accessible patient safety resources for providers and for patients. It provides many ways to network and to share best practices, strategies to address barriers to patient safety, and education to achieve better patient outcomes.

The Kaiser Network and The Commonwealth Fund both address some of the many issues around CMS participation and reimbursement.

The drive to reduce and to eliminate the source of healthcare errors is important and timely. But to tie denials of reimbursement to it as a punitive measure is not going to achieve the desired outcomes. Instead, hospitals will seek ways to target affected patients and to assign responsibility for the errors to the patients. Insurers will look to this as yet another way to deny claims and to increase profit margins. Providers will have incentives to drop patients who are higher risk for incurring medical errors - those with complex chronic diseases requiring repeated or prolonged hospital stays, those with compromised immune systems, those with high risks for falls, those who questions their providers’ actions, and those who are uninsured and who are under-insured.

Instead, a much better way to reduce medical errors and to increase reaching optimal patient outcomes is to provide incentives to meet targets and goals. One way to accomplish that is to reimburse on three levels: for patient outcomes which are less than standard and expected patient outcomes at a lower level, a standard level for patients outcomes which are in alignment with expected outcomes, and a higher premium reimbursement rate for patient outcomes that are better than expected. This would take into account patient risk factors, co-morbidities and severity of case indexing.

Instead of providing providers for disincentives for care, it would provide reimbursement based on groups of patients. Instead of punishing already strapped not-for-profit hospitals, it would provide for incentives for patient safety and optimal patient outcomes. Instead of providing incentives to hide or to attempt to shift causality for errors onto patients, it would provide incentives for providers to reduce risk, reduce error and heighten patient safety practices.

As the IHI practices demonstrate, it is much easier for people who want to do the right thing to actually do it when there is not fear of punishment, but rather there are incentives and resources for achieving desired results. A regressive reimbursement denial program does not meet the needs of patients or providers.

It is important to create and sustain a culture of transparency, of patient partnership and of a culture of patient safety. The practice of defensive medicine, defensive nursing and defensive hospital practices is not conducive to optimal patient outcomes.

Medicare should choose an alternative reimbursement mechanism which rewards meeting expected patient outcomes while not denying reimbursement outright to providers for services that they provide to patients who suffer medical errors.