Report: Medicare Will No Longer Pay for “Preventable” Hospital Errors

The New York Times reports on a recently announced change in Medicare’s policy that is likely to have far-reaching implications for practice of medical malpractice law. The largest insurer in the US will no longer pay bills resulting from what it deems “preventable” medical errors made by hospital employees on patients under their care. By forcing the hospitals to internalize any additional costs they might incur due to negligence, it is reasoned that health care providers will have an even stronger incentive to prevent their patients from being injured as a result of bed sores, injuries from falls or urinary tract infections, for example.

According to the Times’ report, Medicare has created a list of ten conditions it argues are in fact “reasonably preventable.”

The new Medicare policy is still less stringent than the standard advocated by some health policy experts. As the article notes: “In 2002, the National Quality Forum, a standard-setting consortium for the health care industry, compiled a list of 27 largely preventable adverse events, a list that grew to 28 in 2006.”

An executive for the American Hospital Association points out toward the end of the article that it remains unclear which mistakes will be categorized by different insurers as being preventable and which ones would not.

And it is noted that similar policies are already in place:

Over the last year, four state Medicaid programs, including New York’s, have announced that they will not pay for as many as 28 “never events” (so called because they are never supposed to happen). So have some of the country’s largest commercial insurers, including WellPoint, Aetna, Cigna and Blue Cross Blue Shield plans in seven states.

It is argued that many commercial insurers will follow the lead of Medicare and Medicaid and change their criteria as well – leading to a multiplier effect. But while the change in policy makes may end up succeeding in forcing hospitals to be more vigilant in avoiding injuries that shouldn’t happen in the first place, according to the article the cost savings are projected to be relatively small compared with the overall amount of money spent annually for inpatient care.

A much more significant source of savings, according to health economists, would be achieved by  hospitals providing its patients with more preventative healthcare, chronic disease management and by cutting back on unnecessary procedures.

For more background and analysis, see this post from the Healthcare Blog last August.