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Make No Mistake

October 1, 2007
by Charlene Marietti
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CMS adds financial disincentives for some particularly egregious medical errors

Patient safety initiatives are expected to assume even more importance for hospitals under CMS' final acute care hospital inpatient prospective payment system payment rule for 2008. That says a lot.

According to the recent survey by Vendome Group (publisher of Healthcare Informatics), "Trends in Patient Safety Technologies," most hospitals already say patient safety is their number one challenge. However, most have set their highest priorities to curbing incidents related to medication error.

Drug-related events are indeed a serious problem, however not one the Centers for Medicare and Medicaid Services (CMS) has included in its first list of exclusions.

Currently, eight complications, including infections, injuries and preventable errors such as pressure ulcers, will not be eligible for Medicare reimbursement beginning Oct. 1, 2008. And CMS has already announced its intent to add at least three conditions to the list.

Not surprisingly, the new rules include increased reporting responsibilities and an expanded set of quality measures. Data collection begins Oct. 1, 2007, when acute care hospitals will be required to identify secondary conditions present on admission for Medicare patients. Denial of claims related to the hospital-acquired conditions will start one year later.

There is no carrot with this stick. Unlike some states, especially Pennsylvania, which has pegged improved reporting and patient safety records to increased hospital funding, there are no funds attached to compliance with this rule.

"The point is that implementing this type of provision will give hospitals a financial incentive to take steps to prevent hospital-acquired conditions that are reasonably preventable," writes Ellen Griffith, Centers for Medicare and Medicaid Services, Office of External Affairs, in an e-mail.

Medicare will consider the hospital paid-in-full with the payment for the Medicare severity- diagnosis related group for the primary diagnosis, she adds. And hospitals will have to absorb the cost of treating these secondary, hospital-acquired conditions: the rule prohibits billing beneficiaries.

Where Medicare goes, private insurers are typically close behind — especially where there is a precedent for cost-cutting as extensive as CMS' new policy. Some plans have already indicated they will follow suit.

Patients get more voice under the 2008 rules, too. Included in the set of 27 quality measures that hospitals must report is the hospital consumer assessment of health providers and systems, which measures patients' perspectives on hospital care.

Expected to be a powerful motivator, the rule sends a strong signal to hospitals that "never events," that is, mistakes that should never occur, will not be tolerated. It is sure to accelerate policy-making and planned implementations of patient safety-related technologies, especially infection control applications. Many organizations have already budgeted for technologies to support their programs, but this rule is likely to cause organizations to fast-track some purchases and implementations.

In addition, hospital executives are certain to assume more oversight, deliver more patient safety-centric directives and become much more aggressive in instituting related policies and technologies. In addition to expanded test panels to assess patients' conditions preadmission, hospital executives will be inclined to demand that caregivers adhere more closely to clinical guidelines and provide more complete documentation at all points of encounter. To manage and track these imperatives, a full complement of patient safety-related technologies will be absolutely necessary.