Medicare's no-pay events: Coping with the complications

A controversial rule has doctors and hospitals struggling with easing the financial sting while still helping high-risk patients.

By — Posted July 14, 2008

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When the Centers for Medicare & Medicaid Services proposed ending payment for hospital-acquired conditions it said were "reasonably preventable," the move was hailed by many patient-safety advocates and consumer groups.

The rule, issued in May 2007, was "a way of getting at paying according to the value" of the care in the nation's hospitals, said Suzanne Delbanco, PhD, then CEO of Leapfrog Group, a coalition of employer and public health care purchasers.

Lisa McGiffert, director of the Consumers Union's Stop Hospital Infections campaign, said Medicare was right to act on the belief that major safety strides would not occur "until you start pulling on the hospitals' purse strings."

But getting from rhetoric to reality is proving to be a major challenge.

There are eight conditions for which hospitals will not get paid starting Oct. 1, unless the conditions are documented as present on admission. In April, the agency proposed adding 14 more conditions to the no-pay list, but that list won't be set until CMS issues a final rule in August.

In comments filed with CMS in June, AMA Executive Vice President and CEO Michael D. Maves, MD, MBA, said the Association had "strong overarching concerns" about the agency's proposed no-pay events. Dr. Maves said many of the conditions were not preventable among the sickest, highest-risk patients, even when evidence-based guidelines are followed.

At its Annual Meeting in June, the AMA's House of Delegates adopted policy opposing nonpayment for conditions not reasonably preventable even with the right care. The house also called on the AMA to monitor the unintended consequences of Medicare's new policy.

Private and public payers have taken inspiration from America's largest payer and announced plans to end payment for rare and serious mistakes that kill or maim patients, conditions known as "never events."

While the debate rages over whether Medicare's no-pay rule is the right way to reduce harm to hospitalized patients, the consequences are being felt as hospitals change procedures to document conditions on admission. Some hospitals are relatively well-positioned to deal with the regulation, thanks to previous efforts. Others, meanwhile, are struggling to do in months what it took their better-funded counterparts years to achieve.

Underlying the preparations is a constant refrain: A rule aimed at rewarding stricter adherence to evidence-based guidelines is diverting precious resources toward bureaucracy and could end up penalizing the sickest, most vulnerable patients.

The eight events that Medicare will stop paying for as "complicating conditions" in October are:

  • Stage III and IV pressure ulcers.
  • Falls or trauma resulting in fractures, burns or other serious injuries.
  • Foreign object accidentally left behind after surgery.
  • Air embolism.
  • Blood incompatibility.
  • Vascular catheter-associated infections.
  • Catheter-associated urinary tract infections.
  • Mediastinitis after coronary artery bypass graft, a surgical site infection.

Due to their frequency, pressure ulcers, falls and catheter-related infections have received the most attention from doctors and hospitals dealing with the fallout from the no-pay rule.

The 670-bed Baystate Medical Center in Springfield, Mass., got an early start on battling the scourge of bed sores, beginning its efforts in earnest in the mid-1990s. Over nearly a decade, the hospital cut its pressure ulcer rate from 20% per 1,000 patient days to 0.8% in 2005. The rate at most hospitals ranges between 5% and 12%.

"There's been a focus here above and beyond the changes in Medicare reimbursement," said Jan Fitzgerald, RN, Baystate's director of quality and medical management. "It's not like we're saying, 'Oh, my God, they're not going to pay us -- we have to do something.' "

The hospital purchased special air mattresses to relieve pressure on patients' bodies and incorporated daily skin assessment reminders into its computerized physician order entry system. Nurses have protocols to implement preventive interventions if they see signs of skin breakdown.

Automating the processes makes providing the right care easier, Fitzgerald said. "If you have to remember, then you'll probably forget."

To reduce catheter-related infections, Baystate two years ago began to credential physicians who insert intravascular catheters, on the premise that doctors who do it more often will do it more safely, said Evan Benjamin, MD, an internist and Baystate's vice president and chief quality officer. Relying on the traditional "see one, do one, teach one" health care model was no longer sufficient.

"We realized in terms of procedures such as central lines that when we kept that approach, we would see higher rates of infections," Dr. Benjamin said. "We needed to standardize that approach and see who are the people qualified to do this."

Other organizations, meanwhile, are taking the impending nonpayment policy as a prompt to improve their working relationships with community physicians, nursing homes and group homes. Many patients who develop pressure ulcers are elderly or have disabilities and come from long-term-care facilities.

Kim Bullock, MD, is assistant director of ambulatory emergency services at Providence Hospital in Washington, D.C. About 8% of admits to Providence are developmentally disabled patients from area group homes.

She is working to educate group home staff about the risk of pressure ulcers and how to check for and prevent them. In June, Dr. Bullock met to discuss bed sores with more than a dozen primary care physicians in the area who care for a large panel of patients with disabilities.

She said the new Medicare policy provides a "nice framework" for increased collaboration in preventing complications.

"We're trying to do this as a carrot arrangement ... as opposed to saying, 'CMS is going to start this and it's an onerous task and we've got to do it,' " Dr. Bullock said. "We hope that approach will be more effective for patients."

Prevention and protection

Many hospitals are having trouble putting such a positive spin on the matter, according to Robert Wachter, MD, chief of medical service at the University of California, San Francisco, Medical Center and editor of the AHRQ Web M&M online patient-safety journal.

"The amount of energy that institutions are putting into preventing these bad things from happening is far outweighed by the amount of energy they are putting into protecting themselves, and a lot of that relates to present-on-admission aspects and to coding," he said.

While most hospitals rely on nurses to check patients for no-pay conditions on admission, it ultimately falls on physicians' shoulders to confirm the diagnosis and document it in the medical record so it can be coded properly. The Medicare no-pay rule, many say, could be transforming the patient safety movement from a moral imperative to just another paperwork burden.

"Aren't decubitus ulcers bad things? Sure, if you've never practiced medicine, that sounds straightforward," Dr. Wachter said. "But if you've practiced medicine and tried to take care of 15 really sick people in the hospital with more coming every minute, you need to make priority decisions. And managing patients' sepsis and heart attack is more important than looking over the sacral area at the time of admission to determine whether there's an early decubitus ulcer, when the purpose of that largely is to protect yourself against something that feels more like it's a billing and regulatory issue than truly clinically important."

The no-pay rule may be "skewing priorities in ways that are not clinically particularly helpful," he added. "It leaves many physicians with a bad taste in their mouths that this is one more bureaucratic obstacle to the practice of medicine."

Claims with incorrect present-on-admission coding will be rejected automatically by CMS. But officials there reported that since POA coding was implemented in April, only a small proportion of such claims have been sent back to hospitals.

CMS officials said the agency has worked hard to address physicians' and hospitals' concerns, meeting regularly to help them meet the challenges posed by the nonpayment rule.

It takes a team

Dr. Benjamin, of Baystate, said the administrative and patient-safety challenges cannot be faced by doctors alone but require a team effort.

"All physicians want to do the right thing and make sure their patients are not acquiring nosocomial or hospital-acquired conditions," Dr. Benjamin said. "The issue that comes up is that in the United States, our health care system is in transition. We are trying to create a much more reliable health care system. To do that, you can't just ask people to remember. You can't say, 'Doctor, please remember to remove urinary catheters.' You have to create systems to make it easy for them to do it.

"Doctors are absolutely important team members, but they are just team members," he said. "It's the system we are trying to create around them that will ultimately be responsible for reducing these conditions."

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Eight to avoid

The eight events for which Medicare is set to stop paying in October were associated with nearly $22 billion in hospital charges in fiscal year 2007.

Hospital-acquired condition Cases Average charge per hospital stay Total Medicare cost
Stage III & IV pressure ulcers 257,412 $43,180 $11.1 billion
Fall or trauma resulting in serious injury 193,566 $33,894 $6.6 billion
Vascular catheter-associated infection 29,536 $103,027 $3 billion
Catheter-associated urinary tract infection 12,185 $44,043 $536.7 million
Foreign object retained after surgery 750 $63,631 $47.7 million
Surgical site infection -- mediastinitis after coronary artery bypass graft 69 $299,237 $20.6 million
Air embolism 57 $71,636 $4 million
Blood incompatibility 24 $50,455 $1.2 million

Source: Centers for Medicare & Medicaid Services

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Pressured to change

More than a quarter of a million cases of serious pressure ulcers were reported in Medicare patients in fiscal 2007. These bed sores may pose the biggest challenge to physicians and hospitals looking to improve patient safety and lessen the sting of CMS' new no-pay rule. The National Quality Forum recommends that prevention programs include mechanisms to:

  • Institute a risk-assessment protocol incorporating specific scores and allow specific nursing preventive interventions without a physician's order.
  • Periodically assess and document patients' risks, along with prevention plans, in medical records.
  • Use fire-code-compliant or plastic polymer pressure-relieving pads.
  • Regularly change the position of immobile patients; reposition at-risk patients every two hours.
  • Assess patients' nutrition and incorporate nutritional consults with a dietitian for at-risk patients.
  • Prevent and manage incontinence.
  • Educate patients and families on ways to minimize the risk of bed sores.

Source: Safe Practices for Better Healthcare -- 2006 Update: A Consensus Report, National Quality Forum

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The next challenge

Medicare has not stopped with its initial round of eight no-pay events. In April, the agency proposed adding 14 more hospital-acquired conditions to the no-pay list set to take effect in October. CMS is expected to finalize the list in August. Here are data on the number of cases for each condition in Medicare patients during fiscal year 2007, and the associated costs.

Hospital-acquired condition Cases Average charge for hospital stay Total Medicare cost
Deep vein thrombosis/pulmonary embolism 140,010 $50,937 $7.1 billion
Clostridium difficile-associated disease 96,336 $59,153 $5.7 billion
Ventilator-associated pneumonia 30,867 $135,795 $4.2 billion
Staphylococcus aureus septicemia 27,737 $84,976 $2.4 billion
Latrogenic pneumothorax 22,665 $75,089 $1.7 billion
Diabetic ketoacidosis 11,469 $42,974 $492.9 million
Nonketotic hyperosmolar coma 3,248 $35,215 $114.4 million
Diabetic coma 1,131 $45,989 $52 million
Surgical site infection following laparoscopic gastric bypass and gastroenterostomy 208 $180,142 $37.5 million
Surgical site infection following total knee replacement 539 $63,135 $34 million
Legionnaire's disease 351 $86,014 $30.2 million
Delirium 480 $23,290 $11.2 million
Hypoglycemic coma 212 $36,581 $7.8 million
Surgical site infection following ligation and stripping of varicose veins 3 $66,355 $199,065

Source: Centers for Medicare & Medicaid Services

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External links

"The Wisdom and Justice of Not Paying for 'Preventable Complications,' " extract, Journal of the American Medical Association, May 14 (link)

National Pressure Ulcer Advisory Panel (link)

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