Medicare plans to stop paying for 6 hospital-acquired conditions

Besides those on the list for 2008, seven more conditions are under consideration for 2009.

By — Posted June 18, 2007

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The country's payment system offers hospitals little financial incentive to prevent complications because they stand to make more money for treating the conditions patients acquire during their stays, patient safety advocates charge. A newly proposed Centers for Medicare & Medicaid Services rule aims to change that.

The rule, proposed last month and set to go into effect in October 2008, would deny Medicare payment for six costly and sometimes deadly preventable hospital-acquired conditions. The proposal comes in response to a 2003 Medicare Modernization Act requirement that the secretary of Health and Human Services choose at least two hospital-acquired conditions that are costly or happen often and result in higher pay for hospitals. Medicare also is seeking comment on seven additional hospital-acquired conditions that could be added to the no-pay list in 2009.

The initial six conditions include: pressure ulcers, two hospital-acquired infections (catheter-associated urinary tract infections and Staphylococcus aureus septicemia) and three "never events" (air embolism, blood incompatibility and object left behind in surgical patient).

"These reforms represent CMS' continued push to become a more active purchaser of high-quality care for Medicare beneficiaries," CMS Acting Administrator Leslie V. Norwalk said in a statement.

Employer and consumer groups hailed the move and said they hope private payers will follow in Medicare's footsteps. Hospitals and physician patient safety experts approved of the general idea but cautioned that Medicare be careful not to encourage gaming or punish hospitals for events outside their control.

Denying payment to hospitals for preventable adverse events is "an idea whose time has certainly come," said Suzanne Delbanco, PhD, CEO of the Leapfrog Group, a coalition of employer and public health care purchasers.

"In every other industry, we have a way of making certain that we are paying according to the value of what we get," she added. "In health care, we pay simply based on quantity most of the time. We don't pay attention to what kind of services are delivered, and we don't question whether they are the right services or too many or too few. We just pay. This is a way of getting at paying according to the value that's delivered."

Last fall, Leapfrog asked hospitals to stop billing for the 28 items on the National Quality Forum's list of "never events" -- errors such as wrong-site surgery that should never happen. The group will recognize hospitals that agreed to the request in its 2007 Hospital Quality and Safety Survey, set for release this month.

Lisa McGiffert, director of the Consumers Union's Stop Hospital Infections campaign, noted that while her organization's initiative has focused on public reporting of hospital infection rates to encourage better safety practices, "a lot of people believe things are not really going to change significantly until you start pulling on the hospitals' purse strings."

Concerns about coding, preventability

In comments on the rule, the American Hospital Assn. did not object to the never events CMS selected but said including pressure ulcers and hospital-acquired infections would pose serious problems. Putting infections on the list would require hospitals to implement new coding quickly to document when patients have the conditions upon admission, the AHA said.

"The experiences of two states that already use present-on-admission coding show that it can be done, but that it takes several years and intense educational efforts to achieve reliable data," the AHA comment said.

Also, the trade group said pressure ulcers and hospital infections are either difficult to diagnose upon admission or not always preventable. The AHA said Medicare should delay the no-pay rule for these conditions until these concerns are addressed.

Robert Wachter, MD, chief of the medical service at the University of California, San Francisco Medical Center, agreed that the proposed rule is not perfectly fair but said the hospital-acquired conditions chosen by CMS largely could be prevented.

"I don't think [the current payment system] is as pernicious as some people say or that we have the incentive to ignore [medical errors]," he said. "But it doesn't pass the sniff test to say that when a complication that is preventable develops that we should get paid better when that happens."

How preventable are the conditions on Medicare's no-pay list?

"The state of the science is that if you do the right things, you can decrease the numbers considerably but not bring them down to zero," said Dr. Wachter, author of Internal Bleeding: The Truth Behind America's Terrifying Epidemic of Medical Mistakes. "Some unfairness will be there, but we have to deal with this probabilistically. There will be a couple of times when you are unfairly dinged, but over the course of a year you will do OK."

The seven conditions on which Medicare is seeking more comment include: five hospital-acquired infections (ventilator-associated pneumonia, vascular catheter-associated infections, Clostridium difficile-associated disease, methicillin-resistant Staphylococcus aureus, surgical-site infections), and two more never events (wrong surgery and falls).

These conditions are "appropriately in the need-comment range," said Peter J. Pronovost, MD, PhD, director of adult critical care at Johns Hopkins University School of Medicine in Baltimore. "Some are less well-advanced. Ventilator-associated pneumonia, for example, is notoriously difficult to diagnose, and I think most clinicians have little faith that it's going to be measured in any valid or reliable way."

Dr. Pronovost hopes the Medicare proposal spurs greater efforts to ensure that the measurement of these conditions is more precise and less prone to unconscious bias or gaming.

The proposed Medicare rule also would add five new quality measures, for a total of 32 measures, to the list a hospital would need to report to qualify for full Medicare reimbursement. These measures include 30-day mortality for Medicare patients with pneumonia and four more surgical-care improvement measures.

The AMA did not comment on the proposed rule. Medicare will issue its final regulation Aug. 1.

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No-pay complications

Shown are the numbers of Medicare cases in fiscal year 2006 for which the six preventable adverse events targeted by the Centers for Medicare & Medicaid Services were listed as secondary diagnoses -- though not necessarily acquired in the hospital.

Pressure ulcers 322,946
Staphylococcus aureus bloodstream infections/septicemia 29,500
Catheter-associated urinary tract infections 11,780
Objects left in patient during surgery 764
Air embolisms 45
Blood incompatibility 33

Source: Centers for Medicare & Medicare Services

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