NEVER EVENTS
We must not travel in the right circles because we had never heard the term "never events" until earlier last year. That's when the Centers for Medicare & Medicaid Services (CMS) of the Department of Health & Human Services announced that, come October 2008, they would no longer be paying for such services related to such events.
What are never events? CMS describes them as serious and costly errors in the provision of health care services that should never happen. This would include surgery on the wrong body part, foreign objects left in a patient after surgery, medication errors and mismatched blood transfusions. A list of never events developed by the National Quality Forum for CMS can be found on the CMS web site, and it is pretty extensive, with 27 events in six separate categories. Those categories are; surgical, product or device, patient protection, care management, environmental and criminal events.
CMS cites a study that concluded that medical errors may be responsible for as many as 2.4 million extra hospital days, $9.3 billion in excess charges and 32,600 deaths. Reliable statistics in this area, however, may be difficult to find, as the centers for Disease Control and Prevention estimate that hospital-acquired infections alone affect 1.7 million patients and contribute to up to 99,000 deaths per year. This is in addition to the human cost of the trauma and disability. Several states, including Minnesota, New Jersey, Illinois and Connecticut require hospitals and outpatient surgical facilities to report never events, but not all do.
Beginning this October, Medicare will no longer reimburse hospitals in eight specific situations, including retrieving object left in a patient after surgery, treating bedsores, injuries caused by falls in the hospital and surgical site infections following heart bypass surgery. Next year, it will add blood infections, clots in legs and lungs and pneumonia contracted from a ventilator. The aim is to save money and lives and to improve the quality of care. CMS predicts annual savings of about $20 million in direct payments, while Consumer's Union puts the savings much higher.
Then, earlier this month, it was reported that major private health insurers, such as Aetna and WellPoint will be following suit. By negotiating such provisions into their contracts with hospitals, these insurers can also prevent the hospital from billing the patient directly for the costs associated with such never events.
The vast majority of hospitals view never events as a very serious matter and now, with some financial incentive, it is predicted that most will take proactive steps to avoid them to the extent possible. One possible result of this development that many think we will see is an increase in pre-admission screening for infections in order to prove that they were not acquired while in the hospital. One hospital reduced its incidence of antibiotic-resistant staph infection related to the use of ventilators by 67% with such screening. It cost them $1 million to do the screening last year, but 80% of that was paid by private and public insurers.-- Christopher B. Ashton, CEBS
Vol. XXI, No. 1
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The times are changing for Workers' Compensation insurance in New York. On February 1, 2008, we will join the majority of states and the District of Columbia and eliminate the use of published premium rates, switching instead to so-called "loss costs." What this means is that only a component of the rate will be published each year, comprised of the anticipated cost of claim payments and associated loss adjustment expenses for each payroll classification. Each insurer then multiplies the loss cost by a factor to account for its general expenses, overhead, taxes and profit. New York will be doing one other thing that many other states do not and that is to post the loss cost multiplier for each insurer on the web site of the State Insurance Department. This will greatly facilitate checking the premium rating of Workers' Compensation insurance policies in this state. The more some things change, however, the more others remain the same. The New York State Insurance Fund still has the ability to charge a "fair and reasonable" differential charge on top the applicable loss cost and the Fund's expense component. Being the insurer of last resort in New York certainly has its perks. --- Ed.
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