Support expands for never events policies

September 1, 2008

More than three years after Minnesota-based HealthPartners drew national attention after stating it would no longer pay hospitals for costs of treatment related to never events Medicare and private health plans are jumping on the never-event bandwagon.

They expect to reduce costs and patient suffering by pressuring hospitals to develop protocols and prevent never events and other complications.

TRACKING CONDITIONS

If one of these preventable injuries is present at discharge, that either was not identified by the hospital as present on admission or could not be identified based on data and clinical judgment at admission, the Medicare regulations require that the hospital report the condition as "hospital-acquired" on its Medicare claim.

Hospitals also are facing increasing financial pressure from private payers to do more to prevent never events and other hospital-acquired conditions. Since November, 2006, the Leapfrog Group has encouraged health plans and their sponsors to ask hospitals to apologize to patients, report to various safety agencies (such as the Joint Commission, state reporting programs or a patient-safety organization), perform root-cause analyses and waive all related costs when a preventable, hospital-acquired or never event occurs within their facility.

Until recently, few private health plans officially adopted never event policies. Since CMS announced its policy, a growing number have signed on to the Leapfrog initiative or announced other efforts to address never events. These now include Aetna, Caterpillar Inc., GM, Hannaford Brothers, IBM, Intel, the National Rural Electric Cooperative Association, The Dow Chemical Company, UPS and others.

POLICY LIMITATIONS

Because never events policies affirmatively obligate contracted providers to self-identify and withhold billing for preventable injury charges and rely upon provider developed, government approved standards, they present certain advantage for payers compared to certain other more traditionally used quality based limitations.

However, limits on the reach of these policies as well as claims-processing and evidentiary challenges mean that health plans and Medicare also will continue to rely upon medical appropriateness and other traditional, quality-based limits and exclusions to minimize expenditures for substandard care.

This column is written for informational purposes only and should not be construed as legal advice.

Cynthia Marcotte Stamer practices law as a member of the Health Law and Employment Law Practices of law firm of Glast, Phillips & Murray, San Antonio, Texas.