Article - May 26, 2008 - Crain's Detroit Business

Billed for wrong surgery? Hospitals revise policy

By Jay Greene

Should hospitals bill patients or insurance companies for operating on the wrong leg or charge somebody extra for medical care when they fall or are dropped due to the negligence of a health care institution?

Absolutely not, says the Michigan Health and Hospital Association, a Lansing-based group that represents the state's 146 hospitals. The hospital association is developing a formal billing policy on preventable errors.

“They are no-brainers and should never happen,” said Brian Peters, the hospital association's senior vice president of organizational and strategic development.

To head off medical errors before they are made, the association also is establishing a patient safety organization to collect data and encourage hospitals to make quality improvement process changes.

Earlier this year, the Centers for Medicare and Medicaid Services announced that starting Oct. 1 it will deny payment for eight medical errors it considers preventable. They include bed pressure sores, objects left in surgery patients, air embolism, blood incompatibility, traumatic patient falls and several hospital-acquired infections.

“Those are extraordinarily rare occurrences that, if and when they do happen in Michigan hospitals, we would not submit charges for,” said Peters.

A number of commercial insurers, including Blue Cross Blue Shield of Michigan and Health Alliance Plan, are working on their own nonpayment policies that will clearly spell out the medical errors they won't pay for.

Medicare has established “a good starting point and we concur with them,” said Kim Sorget, Blue Cross' vice president of provider contracting and network administration. “We plan to adopt a policy by the end of June after seeking input with hospitals and doctors in the state.” It also would be effective Oct. 1.

But Peters said Blue Cross is considering adding three preventable errors — surgery on the wrong patient, surgery on the wrong body part and wrong surgery — to its proposed policy.

“Blue Cross met with us and our (MHHA) task force is very supportive of adding those three,” Peters said.

Medicare also is taking comments on adding another nine conditions to its “never events” nonpayment list, or things that should never happen in a hospital. The additional nine conditions will be effective in October 2009.

Those additional conditions will include surgical site infections, septicemia, ventilator-associated pneumonia, delirium, Legionnaires' disease and pulmonary embolism.

Eventually, Medicare is expected to adopt all 28 preventable medical errors that have been identified by the National Quality Forum, a Washington-based coalition of employers and health care organizations.

It is unknown how many deaths and how much unnecessary cost medical errors cause. But for the eight preventable errors in its new policy, Medicare estimates that it pays about $21 million annually.

“There is not a huge amount of money associated with these errors,” said Sorget, noting the Blues have not yet estimated how much hospitals have billed for the errors.

However, Medicare has cited studies on 18 types of medical errors that accounted for 2.4 million extra hospital days, $9.3 billion in excess charges and 32,600 deaths.

As a result, several states including Minnesota, New Jersey, Connecticut and Illinois have approved legislation to require hospitals to report never events.

In 2004 and 2005, more than 60 of Minnesota's hospitals, which are required to report NQF's never events, reported more than 200 medical errors that resulted in 32 deaths, nine serious injuries and four serious disabilities.

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