Guest Commentary: CMS no-pay policy hasn't reduced hospital-acquired conditions

Medicare and private insurers thought they were doing the right thing over the past two years by refusing to pay for additional hospital care for what they consider hospital-acquired conditions. But critics say that while their intentions are worthy, such do-not-pay policies haven't worked in reducing these conditions, and payers should try some new approaches.

Such criticism has emerged since the Centers for Medicare & Medicaid Services implemented its hospital-acquired condition no-pay policy in 2008. Congress ordered CMS to establish the policy in 2005, following an Institute of Medicine report that 98,000 Americans die in hospitals from preventable medical errors each year. The goal was to give hospitals a financial incentive to prevent these conditions from occurring in their facilities.

When Medicare patients are found to have one of 10 purportedly preventable conditions at discharge that were not reported at admission, CMS reimburses the hospital only for the principal diagnosis at admission. Listed conditions include catheter-associated urinary tract infection and stage III-IV pressure ulcers. CMS has encouraged states to apply the same policy to their Medicaid programs.

A number of private payers, including Aetna, Independence Blue Cross, and Blue Cross Blue Shield of Michigan, have followed suit, though their lists of do-not-pay conditions vary.

But some quality experts say there still aren't good measures for the prevalence of certain infections, and it remains unknown whether some infections and other conditions are present at admission and whether they are indeed preventable. Therefore, they say, it's neither fair nor productive to penalize hospitals for the presence of these conditions.

"We're putting politics and policy ahead of science," said Peter Pronovost, MD, a medical professor at Johns Hopkins University who has spearheaded hospital infection control efforts around the country. "I believe in accountability but it has to have scientific integrity."

Ramanan Laxminarayan, PhD, an investigator at Extending the Cure, in Washington, D.C, wants CMS to require all hospitals to produce an audited report of their infection rates as a condition of Medicare participation. Then CMS would pay each hospital a per patient infection control fee, and set continuous improvement targets.

Donald Fry, MD, executive vice president of the healthcare research group Michael Pine & Associates in Chicago, favors paying hospitals a single, risk-adjusted fee for surgical procedures and treatment for any associated complications. The payment would be based on the experience of top-performing hospitals. Providers, thus, would have a financial incentive to invest in reducing adverse events, they said.

Others, however, argue for toughening Medicare's current do-not-pay approach--such as expanding the types of discharges affected--to place greater financial pressure on hospitals to reduce preventable adverse events.

CMS acknowledges that its do-not-pay policy has had limited impact so far, resulting in payment adjustments for only 3,416 Medicare discharges in 2009, yielding net savings of $18.8 million. But at this point Medicare and many payers are sticking with the model.

It's clear that current nonpayment policies are no magic bullet for significantly reducing the epidemic of preventable hospital-acquired conditions. They will have to be tweaked. But beyond that, hospitals and physicians will have to double down on their own professional efforts to improve patient safety.

Editor's note: Harris Meyer is a journalist based in Yakima, Wash. who has won many awards for his reporting, including the National Institute for Health Care Management Award and the Association for Health Care Journalists Award.