Medicare Compliance & Reimbursement

Hospitals just getting a handle on managing Medicare "no-pay" conditions have even more on their plates now.

The Centers for Medicare & Medicaid Services is taking several actions to improve the quality of care in hospitals and reduce the number of "never events," according to a press release issued on its Web site July 31.

The final acute care inpatient prospective payment rule, which will appear in the Aug. 19 Federal Register and will be effective for discharges on or after Oct. 1, adds the following three items to the list of preventable conditions for which Medicare will make no additional payment:

• Surgical site infection following some elective procedures such as some orthopedic surgeries and bariatric surgery for obesity.

• Certain manifestations of poor control of blood sugar levels.

• Deep vein thrombosis or pulmonary embolism following total knee replacement and hip replacement procedures.

CMS will require hospitals to disclose whether the patient had these conditions upon admission. If not, Medicare will not reimburse hospitals for these conditions, because they were acquired during the hospital stay. The patient will not be responsible for the additional cost. CMS hopes that the halt in reimbursement will encourage hospitals to make fewer errors.

"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.

CMS also plans to develop three National Coverage Determinations addressing:

• surgery on the wrong body part,

• surgery on the wrong patient, and

• wrong surgery performed on a patient.

The National Quality Forum has identified these types of surgeries as "Serious Reportable Events," gen-erally referred to as "never events." The NQF created a list of 27 Serious Reportable Events in 2002, which was expanded to 28 events in 2006. The NQF defines these events as errors in medical care that are clearly identifiable, preventable and serious in their consequences for patients, CMS says.

The Institute of Medicine also concluded that medical errors, including those that result in hospital-acquired conditions, may be responsible for as many as 98,000 deaths annually, at costs of up to $29 billion.

The final rule also expands the Reporting Hospital Quality Data for Annual Payment Update Program. It 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 (www.hospitalcompare.hhs.gov), a tool that beneficiaries can use to help them choose where to receive treatment.

The final IPPS rule updates payment policies and rates for more than 3,500 hospitals that are paid under Medicare's diagnosis related group payment system.

But even though the IPPS rule lays down stricter standards for hospitals, Medicare estimates that it will increase payments to acute care hospitals by nearly $4.75 billion.

"While it may be some time before we can begin to assess the real impact of these steps on patient care, we are hearing from hospitals around the country about efforts they have undertaken in the past year to improve staff training and other measures to reduce the incidence of these preventable conditions," Weems said. "And other payers, both public and private, are beginning to adopt similar policies in their payment systems."

To read about the proposal, visit www.cms.hhs.gov/apps/media/press_releases.asp, and scroll down to the July 31 release.