Non-Payment for Never Events Gaining Momentum with Insurers
Health Plan Week included a feature story, noting the increasing adoption of “never-event” payment policies. Under such a system, providers do not request reimbursement for services rendered as a result of preventable errors. Insurers are adopting these policies to increase awareness about medical errors and, moreover to improve the efforts to minimize the likelihood of such events. Additional benefits, if the programs have the desired effect, is reduced costs.
Among those parties which have recently adopted this policy include the Pennsylvania Medicaid program and Aetna, Incorporated. Each of the two payers indicated in January that they would cease reimbursements to hospitals for such events. The Pennsylvania Department of Public Welfare (DPW), which administers Medicaid for the State, is following the guidelines set forth by the Centers for Medicare and Medicaid Services, which have previously been described on Hospital Buyer.
The Aetna policy further requires that hospitals must report medical errors, all costs associated with the event cannot be billed for, and develop efforts to reduce future occurrences. Moreover, healthcare providers are expected to apologize to the patient affected by the incident, as well as their family.
Other payers that have adopted the same policy include HealthPartners, Incorporated, Anthem, and WellPoint, Incorporated. The HealthPartners policy was initially implemented in 2005. Payers will implement the policy in a different manner, as contracts and billing practices vary between and among each. Both Anthem and Aetna are planning to include these provisions as hospital contracts come up for renewal.
Anthem will start with four specific events, the core surgical four. An additional event, the incidence of stage three or four pressure ulcers in nursing homes, will no longer be chargeable. Identifying such events, however, for payers that employ a per diem billing system will be more challenging.
CMS modified billing practices to be able to account for these complications. Last October, the Agency began requiring that primary and secondary diagnoses at the time of admission both be listed. Next year, the rate of reimbursement will be modified if patients have additional conditions listed following a hospital stay.
Consistent with the Health Plan Week report, HospitalBuyer published a story earlier this week noting the statewide adoption of such a policy in Oregon by healthcare facilities. Healthcare providers, too, are developing policies to reduce the incidence of these events and are developing plans to cease billing for such. Hospitals in Minnesota also agreed to the same, as noted in October on HospitalBuyer, when the announcement was made by the Minnesota Hospital Association.
There has been a significant response from the healthcare community in light of the forthcoming CMS policy, now extending to even more payers, to decrease the incidence of events associated with mistakes. Healthcare facilities are scrambling to improve efforts to reduce the incidence of these never events and others that are preventable, such as pressure ulcers.Geisinger Health System, for example, implemented a program wherein there is a one-time charge for heart bypass. No additional charges are billed in the case that patients require additional care after undergoing surgery, as noted in HospitalBuyer report on the program.
As described on HospitalBuyer, the National Quality Form identified 27 different medical errors deemed “serious, largely preventable and of concern to both the public and health care providers”. That list was initially formulated in 2002 and was updated five years later. One of the additional challenges that payers will face is determining those events that fall into this category. Healthcare providers, alternatively, face increasing pressure for perfection.
February 29, 2008 Related topics: Quality, Safety, Errors, Industry & Market