Final CMS rule adds 'never events' that Medicare won't pay for

Medicare plans to increase the pressure on hospitals to improve quality, and hopes that state Medicaid programs will jump on board as well.

The Centers for Medicare & Medicaid Services announced late last week its final inpatient prospective payment rule, adding hospital-acquired conditions that will not be reimbursed and provide additional incentives for hospitals to improve care quality.

CMS already lists eight preventable conditions, commonly called never events, for which it will not make additional payments if patients develop them during their hospital stays. In this year’s proposed rule, CMS identified nine potential categories of conditions, and this year’s rule adds three additional conditions.

The new conditions for which Medicare will not pay include surgical site infections following certain elective procedures, including certain orthopedic procedures and bariatric surgeries for obesity; certain manifestations of poor control of blood sugar levels; and deep vein thrombosis or pulmonary embolism after total knee replacement and hip replacement procedures.

CMS also sent a letter to state Medicaid directors providing information about how states can adopt the same never event payment policies contained in its new IPPS rule. CMS said about 20 states already have or are considering ways to forego payments to providers when a patient has a serious medical problem related to treatment.

"Never events cause serious injury or death to beneficiaries and result in unnecessary costs to Medicare and Medicaid (because of) the need to treat the consequences of these errors," said Kerry Weems, acting director of CMS. "The steps taken today reflect our strong conviction that these events should be prevented."

The IPPS rule, which primarily updates Medicare payments to hospitals for fiscal year 2009, which begins October 1. The rule provides additional incentives for hospitals for hospitals to improve the quality of care for Medicare beneficiaries.

CMS also announced the opening of a process to develop three National Coverage Determinations that would address Medicare coverage of certain surgical procedures - surgery on the wrong body part, surgery on the wrong patient, and wrong surgery performed on a patient. Medicare NCDs set national policy on whether Medicare will cover an item or service and under what conditions.  In the absence of an NCD, coverage decisions are made by the local contractors that process and pay Medicare claims.

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