Laboratory News

Private Insurers Will Stop Paying Hospitals for Care Linked to Errors

It was big news last fall when the Centers for Medicare and Medicaid  (CMS) announced that it would stop paying for care linked to medical errors effective October 1, 2008. At the time, The Dark Report  predicted that private insurers would quickly follow suit.  Now comes news that Aetna, Wellpoint, and other big insurers are moving to ban payments for care resulting from serious errors. 

Medicare identified eight conditions for which it will no longer reimburse, including the extra cost of bed sores, falls, and six other preventable injuries and infections that occur while a patient is in a hospital.  The next fiscal year, Medicare plans to add to the list hospital-acquired blood infections, blood clots in legs and lungs, and pneumonia contracted from a ventilator. 

Private insurers are taking small steps to follow Medicare's lead-Banning only the gravest mistakes. Aetna will no longer pay for, nor let patients be billed for, 28 different "never events."  Never events, compiled by the National Quality Forum, include leaving an instrument in a patient after surgery, the death of a mother in a low-risk pregnancy, allowing a patient to develop bedsores, and using contaminated devices. 

The never events are rare enough that private insurers don't expect to see a big financial savings at first.  The idea is to spur more attention to safety and public reporting of mistakes.  "It's not a matter of paying for them.  It's about getting them to not happen in the first place," says Thomas Granatir, director of policy and research at Humana .

More common errors offer the biggest potential savings for insurers.  Patients develop 1.7 million infections in hospitals per year.  Urinary tract infections and hospital acquired pneumonia can add more than $10,000 to a patient's hospital bill.  Common medical errors cause more than $4.5 billion per year, according to the Centers for Disease Control (CDC).

Hospitals are concerned that the new strategy of not reimbursing for medical errors could drive up medical costs in other ways, particularly as hospitals absorb or pass on the expense of introducing the safety and screening procedures needed to help avoid mistakes. Insurers disagree, saying the efforts will trigger both safety improvements and savings for patients.

If insurance companies are now refusing to reimburse hospitals for care resulting from hospital errors, can a policy of not reimbursing laboratories for obvious errors in specimen collection, transport, and analysis be far behind?  As Dark Daily and The Dark Report have frequently mentioned, it would be timely for laboratories and pathology group practices to incorporate quality management methods, such as Lean and Six Sigma, into laboratory operations and work flow to reduce waste, maximize efficiency, and eliminate errors.  With these quality management methods, laboratory errors can be greatly reduced and labs can have more confidence that their work flow and operational systems are handling each specimen and each test correctly every time.

Related Articles:

Medicare's Policy of Not Reimbursing for Medical Errors Will Boost Lean/Six Sigma

(Dark Daily 8/23/2007)

Insurers Stop Paying for Care Linked to Errors