Two overlapping initiatives are moving ahead that focus directly on the problems that arise in healthcare facilities.  One is state-driven and the other a federal initiative.  For Pennsylvanians this could lead to major changes in healthcare services.

The federal government charged the National Quality Forum (NQF) with devising a core list of preventable, serious adverse events that are important both for the public and health care community.    NQF identified 27 such events, called Serious Reportable Adverse Events, or “Never Events”, that they recommended for quality measurement and reporting by providers.

On January 14, 2008, Pennsylvania joined a handful of states in issuing a directive to acute care general hospitals that the Commonwealth would commence monitoring these “Never Events” for Medicaid patients.  Medicaid payments to these hospitals will be withheld when such an event occurs.  Additionally, the cost will not be passed on to the patient.

Starting in October 2008, the Centers for Medicare and Medicaid Services (hereinafter Medicare)  will focus on a set of events which they are calling  HACs or  Hospital-Acquired Conditions. Some are on the NQF’s hit list of Serious Reportable Adverse Events and some are not, but perhaps should be.  Similarly, some of the “Never Events” should be on Medicare’s list.  But that is for another day…

This particular federal initiative began with the Deficit Reduction Act of 2005, Section 5001(c), of Pub. L. 109-171, that required “the Secretary [of Health and Human Services] to select, by October 1, 2007, at least two conditions that are (a) high cost or high volume or both, (b) result in the assignment of a case to a DRG that has a higher payment when present as a secondary diagnosis, and (c) could reasonably have been prevented through the application of evidence-based guidelines. For hospital discharges occurring on or after October 1, 2008, hospitals will not receive additional payment for cases in which one of the selected conditions was not present on admission. That is, the case will be paid as though the secondary diagnosis was not present.”

In August 2007, Medicare chose eight hospital-acquired conditions, including some from the list of 27 “Never Events”.   These will undoubtedly have long-term consequences for healthcare delivery.
 Of course, the headline grabber is that Medicare will no longer reimburse for these hospital-acquired conditions. This begs several questions.  First, what are the eight hospital-acquired conditions in Medicare’s view?  Second, why were others not picked from the list of 27 “Never Events?  Finally, if Medicare won’t reimburse a hospital, will the Medicare patient then be on the hook?  As to this last question, according to Medicare, the answer is NO.  They have determined that the additional costs that are incurred by the hospital are still considered “covered” Medicare costs.  According to the new rules “Medicare’s payment to the hospital is for all inpatient hospital services provided during the stay.”  Consequently, the patient cannot be billed.

Notably, the Rules are also intended to ensure that hospitals will not turn away patients out of fear of not being reimbursed.  To thwart this, Medicare has selected conditions they deemed “reasonably preventable”.

Of course, the fine print in the Rule is that outlier payments may still be available in a given case since the total charges for all inpatient services will be used to determine eligibility for these payments.  Additionally, exceptions may be permitted that allow for reimbursement.
 Now, what are the eight conditions and why not others.  In arriving at this list Medicare relied not only on comments received on proposals but they also used complex statutory criteria that included availability of Medicare codes for the condition, burden, and prevention guidelines:

The eight conditions identified for October 1, 2008 include the following:

A. Catheter-associated Urinary Tract Infections

Among the reasons given by Medicare for including these as hospital-acquired conditions is prevalence as well as high cost. Medicare data from FY 2006 showed that there were 11,780 Medicare patients with this as a secondary diagnosis.  In FY 2007 this rose to 12,185 cases at $44,043 per stay.  Nosocomial urinary tract infections reportedly result in an additional day in the hospital or 1 million extra hospital days per year.  In Medicare’s view, prevention guidelines for these are considered to be widely recognized and include either not using a catheter or removing these promptly.

B. Pressure Ulcers (Decubitus Ulcers)
 There were approximately 257,412 reportable cases in FY 2007, at a cost of $43,180 per hospital stay.  Commenters on the Rules suggested that these were “unavoidable” and, consequently, care should be payable.  In response, Medicare determined that listing these as HACs will result in screening for pressure ulcers at the time of admission to a hospital.  As a result, pressure ulcers will be identified earlier on and this early intervention will presumably lead to improved treatment.

C. Serious Preventable Event
 These are conditions which “should not be expected to occur during a hospital admission”:
  (1) Object Left in During Surgery
  In FY 2007, 750 Medicare patients had an object left in during surgery as a secondary diagnosis. The cost for the hospital stay was $63,631.  While not deemed prevalent, such cases are considered to be high cost in that they are more likely to require additional surgery and raising the specter of other adverse events.
  (2) Air Embolism
  Again this is considered a rare but costly event that “should not occur”.
  (3) Blood Incompatibility
  As with the previous two conditions, this is considered a rare but costly condition.

D. Mediastinitis After Coronary Artery Bypass Surgery
 Although not a high-volume condition, at 66 cases in FY 2007 it is considered high cost with charges for Medicare patients averaging $299,237.  Moreover, prevention guidelines are backed by evidence based medicine.

E. Vascular Catheter-Associated Infection
In FY 2007, there were 29,536 Medicare cases with the cost averaging $103,027.

F.  Falls and Traumas: Hospital Acquired Injuries, including Fractures, Dislocation, Intracranial Injury, Crushing Injuries, Burns and other unspecified causes.
In FY 2007, 193,566 cases were reported at a cost of $33,894.  Some commenters on this Rule said that it is impossible to prevent all falls.  In response, Medicare chose to “reiterate that the statutory provision authorizes the Secretary to select conditions that “could reasonably have been prevented through the application of evidence based guidelines".
On April 14, 2008, Medicare released a new rule that proposed adding nine more conditions to the list of eight HACs for FY 2009 that will no longer lead to a higher Medicare payment.  These include Surgical Site Infections following certain elective procedures (such as Gastric Bypass), Legionnaires’ Disease, Glycemic control, Iatrogenic Pneumothorax, Delirium, Ventilator-associated Pneumonia, Deep Vein Thrombosis and Pulmonary Embolism, Staphylococcus Aureus Septicemia, and Clostridium Difficile Associated disease.

Private health insurers are also showing an interest in these excluding payment for these conditions.  HACs will undoubtedly evolve, possibly with the inclusion of more of the “Never Events” as more follow Pennsylvania and other states leads.