US Medicare will stop paying for preventable errors

In a major policy change projected to save lives and millions of dollars, Medicare will stop paying US hospitals to correct 8 preventable medical errors caused by their own negligence, commencing in October 2008.

The new payment guidelines are part of a 3-year effort by Medicare, the largest health care payer in the United States, to improve care for elderly and disabled Americans. Under guidelines issued in August, Medicare will no longer pay hospitals to retrieve objects, such as sponges or surgical tools, left in patients after surgery, or to treat problems arising from air embolisms or incompatible blood transfusions. Nor will it pay the additional costs of treating bedsores developed while in the hospital, injuries caused by hospital falls, or infections arising from prolonged use of urinary and vascular catheters or after coronary artery bypass surgery.

“The overall mission of the Medicare program is changing,” said Herb Kuhn, deputy administrator of the Centers for Medicare & Medicaid Services. “Our efforts are focused on becoming an active purchaser, rather than a passive payer, of health care.”

The Bush administration estimates the new regulations will save $20 million annually, but others predict far greater savings. About 1.7 million Americans contract infections each year in hospitals — almost 100 000 die — with Medicare paying to treat more than 60% of them. Catheter-associated urinary tract infections alone cost $451 million annually, according to the US Centers for Disease Control and Prevention.

Hospitals themselves will pay for the additional procedures and extended hospital stays required to fix the problems; the regulations expressly forbid them from shifting the costs to patients.

Emanating from a deficit-reduction law passed by the US Congress in 2005, the new rules require hospitals to start reporting secondary diagnoses that are present on admission for patients discharged on or after Oct. 1. Almost no US hospitals currently record such data.

Hospitals will not be reimbursed for the extra cost of treating patients who acquired conditions while in hospital.

With the help of experts, Medicare selected conditions that were considered preventable, then sought public comment on the proposed changes in May. Medicare anticipates adding 3 more conditions next year.

Private insurers are expected to follow Medicare's lead, said Susan Pisano, a vice-president of America's Health Insurance Plans, a trade group. A few US insurers already have similar policies, and “a considerable number” are mulling such changes. “Payment incentives play a good role in encouraging quality and enforcing it where it exists,” she said.

Nancy Foster, vice-president for quality and patient safety policy for the American Hospital Association, said she couldn't predict whether the changes would increase hospital costs. But when hospitals make clearly preventable errors that cause harm to patients, they shouldn't expect Medicare to pay for them, she said.

Other conditions, such as falls, are not completely preventable, Foster said. “We have lots of ways of reducing falls, but nothing approximating zero yet.”

The new reporting requirements are likely to “significantly” increase laboratory testing to determine if infections are present on admission, Foster said. But how, she asked, do physicians admitting patients distinguish between a preliminary bedsore and mere redness of skin? Hospital are also inventing data collection systems on the fly, she said. “You need to lay the groundwork, if you're going to make this a national policy.”

The American Medical Association declined to comment on the new rules, saying it had not yet reviewed them. In June, the association told Medicare that cutting payments to hospitals for treating complications that are “often a biological inevitability regardless of safe practice” was discriminatory. The proposed changes could result in delay or denial of care to vulnerable patients, including elderly patients with compromised immune systems, the association added.

“Continued access to care for these patients has already become more difficult due to the costs of care and this policy could significantly compound the problem by leading hospitals to erect barriers to admission,” it wrote.

Consumer groups generally lauded the changes. But the founder of the Committee to Reduce Infection Deaths, a non-profit patient advocacy group, decried the decision to strike staphylococcal aureus septicemia infections from the final list. Betsy McCaughey said Medicare's historical indifference to quality has increased costs and put patients at risk. “Hospitals aren't going to clean up until their biggest customer in this country demands it,” she said.

The new policy also drew a favourable response from heavy hitters like the New York Times, which, in an editorial, pointed to the “perversity” of a system that rewards incompetence by paying hospitals more when surgeries are complicated by infection caused by the hospitals' own sloppiness.

Medicare should also consider docking the doctors who make the mistakes, the Times argued. Ken Connor of the Center for a Just Society, a conservative Christian think tank, went even further, urging Bush to require hospitals to repay the “billions of dollars” they have received from Medicare over the decades to fix their mistakes.