Hospital and Health System

Medicare and Medicaid Encourage Patient Safety in Hospitals, Reduce Never Events

CMS is taking actions to improve the quality of care in hospitals and reduce the number of “never events” — preventable medical errors that result in serious consequences for the patient. In addition to the final rule, CMS sent a letter to state Medicaid directors encouraging states to adopt the same non-payment policies outlined in the final Medicare rule. Nearly 20 states already have or are considering methods to eliminate payment for some never events.

"Never events cause serious injury or death to beneficiaries and result in unnecessary costs to Medicare and Medicaid due to the need to treat the consequences of the errors," said CMS acting administrator Kerry Weems. "The steps taken reflect our strong conviction that these events, in fact, should be prevented, and our commitment to protecting Medicare and Medicaid patients from them."

CMS also announced the opening of a process to develop three National Coverage Determinations (NCDs) that would address Medicare coverage of certain surgical procedures. Medicare NCDs set national policy on whether Medicare will cover an item or service and under what conditions. In the absence of an NCD, coverage decisions are made by the local contractors that process and pay Medicare claims. The three types of surgery under consideration are surgery on the wrong body part, surgery on the wrong patient and wrong surgery performed on a patient.

Specific legislative proposals were also included in the President’s FY 2009 budget submitted to Congress that would have prohibited Medicare payment for never events and would have required hospitals to report never events or receive a reduced annual payment update.

As required by the Deficit Reduction Act of 2005 (DRA), CMS began selecting hospital-acquired conditions (HACs) that were determined to be reasonably preventable. If a condition is not present upon admission, but is subsequently acquired during the hospital stay, Medicare will no longer pay the additional cost of the hospitalization. The patient is not responsible for the additional cost. Rather, the hospital is being encouraged to prevent an adverse event and improve the reliability of care it is giving to Medicare patients.

The final rule also expands the Reporting Hospital Quality Data for Annual Payment Update Program. The Medicare law requires CMS to reduce payments to hospitals that do not successfully report quality measures adopted under the program by 2 percent from the percentage increase that would otherwise apply to their payment rates. The quality measures are publicly reported on the CMS Hospital Compare Web site, a tool that can be used by beneficiaries in choosing where to receive treatment.

Source: Centers for Medicare & Medicaid Services, July 31, 2008