Blue Cross Won’t Cover Costs Tied to Hospital Errors

By Marion Davis
Contributing Writer Providence Business News

Blue Cross & Blue Shield of Rhode Island has issued a “statement of principle” saying it will not pay health care providers – specifically, hospitals – for costs associated with 28 “serious reportable events” such as wrong-site surgery, severe bedsores, or patient death or disability resulting from a fall or from the use of contaminated drugs or devices.

The policy, which Health Insurance Commissioner Christopher F. Koller called “an example” for others within the health care system, is based on a list of so-called “never events” developed by the National Quality Forum, a nonprofit coalition of physicians, hospitals, businesses and policymakers, that are considered generally preventable and of serious concern.

For costs associated with such events, Blue Cross said, it expects hospitals to cover not only the insurer’s share of the costs, but also not bill patients for their share.

“BCBSRI considers patient safety to be one of the most pressing issues facing the health care system today,” said Dr. Harold Picken, associate chief medical officer for the insurer, which covers 680,000 lives, in a news release. “As the state’s largest nonprofit health insurer, we would like to continue to collaborate with the rest of Rhode Island’s health care community to strengthen the systems and procedures necessary to ensure these events never happen.”

Last month’s announcement came just a week after the Commonwealth of Massachusetts said it was adopting the same policy for four state agencies that collectively insure or cover health care costs for more than 1.6 million people, becoming the first in the nation to implement a uniform non-payment policy across state government.

That same day, Blue Cross Blue Shield of Massachusetts, which hailed the new policy, said it would also stop reimbursing hospitals for costs related to the 28 “never events.” And the Massachusetts Hospital Association expressed support for the policy as well, noting that Bay State hospitals were already leading the way by adopting a voluntary practice of not charging for certain serious reportable events.

Locally, the Hospital Association of Rhode Island wasn’t quite as effusive in embracing the BCBSRI’s new policy, but President Edward J. Quinlan did say in a statement that the group and its members “fully support and share the commitment of BCBSRI to reduce medical errors and improve patient safety.”

“Hospitals in Rhode Island have a national reputation for quality health care,” he said. “This status is the result of collaborative efforts that continue to provide measurable gains and a culture that values safe, responsible and cost-effective care.”

But while no one disputes the importance of safety and quality, the merits of this particular approach are not, in fact, universally accepted. For starters, as Quinlan noted in an interview, these are matters normally covered in contract negotiations between payers and hospitals. Moreover, he and a senior official at Lifespan said, many of these situations are not really cut-and-dried.

In refusing payments for all 28 “never events,” Massachusetts and the Blues are going beyond what the federal government is preparing to do effective Oct. 1. After a painstaking review process, and with a year’s notice to hospitals, the Centers for Medicare and Medicaid Services (CMS) is going to stop paying for costs associated with three so-called “never events” – objects left in the body during surgery, air embolisms and blood incompatibility. In addition, it will no longer pay for other avoidable events, such as patient falls, urinary-tract infections related to improper use of catheters, pressure ulcers, catheter-related vascular infections and mediastinitis, an infection that can develop after heart surgery.

In April, the federal agency said it wanted to add nine more problems to the list, at a potential savings of $50 million per year if adopted. It was unclear last week how much the agency projects to save from the changes already approved.

Neither Massachusetts nor the Blues have said how much they expect to save, and BCBSRI’s Picken said he doesn’t believe a great deal of money is at stake.

But asked whether the Lifespan hospitals now charge Blue Cross or other payers for costs associated with those 28 “never events,” Dr. Mary Cooper, the health care system’s chief quality officer, said it’s hard to tell, and people within the organization are trying to figure that out now – and determine what kind of impact the new policies are going to make.

Some of the 28 “never events” involve crimes: sexual assault, battery, murder, kidnapping. But also included are actions by others that hospitals are expected to prevent: patient suicides and attempted suicides or elopements resulting in serious disability; care provided by someone impersonating a licensed health care worker. In addition, burns “from any source” incurred while being cared for in a health care facility are covered by the policy.

Then there are straight-out errors: inseminating a patient with the wrong donor sperm or egg; discharging an infant to the wrong mother; operating on the wrong body part or on the wrong patient; leaving a foreign object inside a patient.

Yet several of the “never events,” while serious, may not always be the result of poor or unsafe care, Cooper noted. For example, patients with certain heart arrhythmias might show no sign of those problems before they go into surgery, and be deemed a low risk, but then die on the operating table because of the arrhythmia.

Even pressure ulcers, Cooper said, can be affected by factors beyond a hospital’s control, such as the person’s nutrition, heavy smoking, circulatory problems and mobility – and the research on those factors continues to yield new information.

Both Cooper and Quinlan at HARI noted that the implementation of the new CMS policy would provide an opportunity for the entire country to see how well that approach works in promoting quality and safety and how to ensure there are no unintended consequences. And they pointed out that even without non-payment policies, Rhode Island’s hospitals are working aggressively to prevent errors, most notably through the ICU Collaborative, which includes all the adult intensive-care units in the state.