CMS issues rule aimed at reducing "never events"

August 8, 2008

The Centers for Medicare and Medicaid Services has introduced new payment provisions to reduce so-called "never events" that occur in hospitals.

This material originally appeared in the August 1, 2008, issue of Health Lawyers Weekly, a publication of the American Health Lawyers Association.

In a final acute care inpatient prospective payment system (IPPS) final rule issued July 31 by the Centers for Medicare and Medicaid Services (CMS), the agency took several steps to improve the quality of care provided in hospitals.

As part of these quality of care incentives, the rule includes payment provisions to reduce so-called “never events” that occur in hospitals, CMS said in a press release.

CMS also noted in the release that it sent a letter to state Medicaid directors providing information about how states can adopt the same never events practices and encourages states to adopt the same non-payment policies outlined in the final rule.

CMS also announced the opening of a process to develop National Coverage Determinations (NCDs) addressing three never events: surgery on the wrong body part, surgery on the wrong patient, and wrong surgery performed on a patient.

“Evaluating coverage of these procedures is yet another important step for Medicare in addressing concerns regarding never events,” the release said.

The rule finalizes three conditions that, if acquired during a hospital stay, Medicare will no longer pay the additional cost of the hospitalization.

The three conditions that were identified in the final rule are: surgical site infections following certain elective procedures, including certain orthopedic surgeries, and bariatric surgery for obesity; certain manifestations of poor control of blood sugar levels; and deep vein thrombosis or pulmonary embolism following total knee replacement and hip replacement procedures.

In addition, the final rule expands requirements for hospital quality reporting. CMS added 13 new quality measures, bringing the total number of measures for reporting in 2009 to 42. Currently, hospitals are required to report 30 quality measures on their claims for Medicare inpatient services to qualify for a full update to their FY 2009 payment rates, according to the release.

Overall, the final rule is estimated to increase Medicare payments to acute care hospitals by nearly $4.75 billion.

View a display copy of the rule.

Read CMS’ press release.