No pay for "never event" errors becoming standard

The emerging ethical and patient safety imperative is that hospitals should not be reimbursed for medical errors that should never happen.

By — Posted Jan. 7, 2008

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The movement to align patient safety and payment seems to be picking up a full head of steam. Hospitals and payers are coalescing around the idea that no one should get paid for so-called never events -- serious reportable events, such as wrong-site surgery, that kill or maim patients.

Perhaps most significantly, the BlueCross BlueShield Assn. announced in November 2007 that its plans will work toward ending payment for never events. The change will be phased in over several years as the Blues alters its coding and claims processes. A spokesman said adoption will vary among the 39 Blues plans, which insure more than 100 million people, because the change requires renegotiating contracts and securing agreements from local physicians and hospitals.

Many hospitals also have stepped forward on the issue. In September 2007, Minnesota hospitals and insurers agreed that patients and health plans should not be billed for care associated with a list of 28 never events endorsed by the National Quality Forum, a voluntary consensus standard-setting organization. Last month, 61 Massachusetts hospitals announced they will stop charging for nine NQF-defined never events, such as sending a baby home with the wrong family or performing a procedure on the wrong patient. Nationally, nearly 1,300 hospitals have pledged to waive all costs directly associated with never events.

The shift on never events comes on the heels of a new Centers for Medicare & Medicaid Services rule, issued in August 2007 and set to take effect in October 2008, that denies payment for eight hospital-acquired conditions. Five of the eight -- pressure ulcers, air embolism, blood incompatibility, object left in patient after surgery, and patient falls -- also are NQF-endorsed never events. It is widely expected that even more private payers will follow Medicare's lead in this area once the rule has been successfully implemented.

Many experts said the shift on never events is a welcome change.

While never events are extremely rare by definition, removing even the hint of a financial incentive is the right thing to do to encourage patient-safety efforts, said Robert I. Field, PhD, author of the new book, Health Care Regulation in America: Complexity, Confrontation and Compromise.

"It's a start, and that's all it is," he said. "The most extreme misalignment is when you actually make money off making a mistake ... There's a moral dimension to this."

Margaret E. O'Kane, president of the National Committee for Quality Assurance, which rates health plans, agreed. Not paying for never events "almost seems like a no-brainer in its ethical rightness," she said. "Ultimately, it is an alignment of the patients, the payers, the providers and society to get health care working right."

Some caution to take it slow

The National Quality Forum first published its report in 2002, identifying 27 adverse events that are serious and largely preventable. It added a 28th event -- artificial insemination with the wrong donor sperm or egg -- in 2006.

Now a dozen states require hospitals to track, analyze and publicly report any NQF never events.

"There's something called an accountability epidemic moving across our country," said James Conway, senior vice president of the Institute for Healthcare Improvement and former chief operating officer at the Dana-Farber Cancer Institute. "No matter where you go, people are holding health care accountable for outcomes.

"The health care industry is looking for a place to send a very clear message saying, 'We hear you, we're wiling to be held accountable, we're willing to report and we're not going to charge for these mistakes,'" Conway said. "Never events are a great place to start because it's a manageable number, they're serious and we should be trying to eliminate them."

Robert M. Wachter, MD, said the shift on never-events payment shows how quickly change is happening in the patient safety arena.

But, he warned, never events such as pressure ulcers or patient falls are not always preventable and "there will be lots of unintended consequences and challenges in the implementation phase that should push us to go slowly with a small number of events."

Dr. Wachter, chief of the medical service at the University of California, San Francisco Medical Center and author of a new textbook, Understanding Patient Safety, said penalizing hospitals could discourage reporting. Also, hospitals could be unfairly dinged for not accurately detecting that a patient had pressure ulcers upon admission. UCSF does not charge for never events, he said.

The American Medical Association did not comment for this article. But in a letter to Medicare regarding its recent no-pay rule, AMA CEO Michael D. Maves, MD, MBA, wrote that denying payment for health care-associated conditions "could have significant unintended consequences," such as discouraging facilities from admitting patients with comorbidities who are more susceptible to infection. Dr. Maves' letter did not touch on the never events included in the Medicare rule.

The Massachusetts Medical Society had no comment on hospitals' moves to stop billing for never events. The Minnesota Medical Assn., which opposed Health Partners' 2004 decision to stop paying for never events, did not respond to requests for comment by deadline.

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Hospitals step up

Nearly 1,300 hospitals have pledged to waive costs directly related to a never event. That equals 52% of the hospitals responding to a survey released in September by the Leapfrog Group, a patient-safety think tank. These hospitals also pledged to apologize to the patient and family affected, report the event to the appropriate entity and perform a root-cause analysis. Hospitals adopting never-events policy:

Size Portion
1-100 beds 59%
101-250 beds 53%
251 or more beds 48%

Source: Leapfrog Group survey

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