New CMS 'error' rule has access implications

'We can affect patient outcomes'

A recent announcement by the Centers for Medicare & Medicaid Services (CMS) that it will no longer pay for care required because of hospital error has implications for patient access.

The change is one of several initiatives being touted by the administration as ways to improve the accuracy of Medicare's payment for inpatient care and to encourage hospitals to improve the quality of their services.

The rule identifies eight conditions — including three serious types of preventable incidents sometimes called "never events" — for which Medicare will no longer cover the cost of treatment. CMS has said it would work to add three more conditions to the list next year.

Hospitals in the future will be expected to pick up the cost of additional treatment required by a preventable condition acquired in the hospital, according to the rule.

While at first glance it's easy to assume that patient access is not impacted by the clinically oriented rule, closer consideration suggests otherwise, notes Keith Weatherman, CAM, MHA, associate director for patient financial services at Wake Forest University Baptist Medical Center in Winston-Salem, NC.

"Certain things we do can affect treatment protocols and, yes, even patient outcomes," Weatherman points out.

"Patient access is responsible for getting the exact patient name while completing the medical record search and the registration," he says. "Mix-up of records because of a registration error can certainly affect the treatment plan for patients regarding the patient's history, allergies, etc."

Clinicians must be able to trust that the information given to them via registration is exact, Weatherman adds. "Also, it is vital that patient access departments with responsibility for bed management get patients to the correct bed, including transfer situations."

Transporters at his hospital, for example, are assigned to the patient access department. "It is vital, not just because of this ruling, that transporters — and actually, all staff — are well trained in safety precautions."

Weatherman cites an instance at another facility in which a friend of his was injured while being discharged from the emergency department (ED).

"As she was being put into the wheelchair, her hand slipped," he says. "Her finger got caught in the frame of the wheelchair and it actually pinched the end of her finger off. This terrible incident is proof that even non-clinical staff — including patient access — can affect patient outcomes.

"The other things that we do — preregistration, financial counseling, precertification, verification, point-of-service collections — must mix into the patient flow so that treatment that is urgent or emergent is not delayed," Weatherman adds.

In 2006, Congress gave CMS the power to prevent Medicare from giving hospitals higher payment for the extra costs of treating a patient when infections and other preventable conditions occur during a hospital stay.

Hospitals are to begin reporting secondary diagnoses present on the admission of patients starting with discharges on Oct. 1, 2007. One year later, cases with these conditions would not be paid at the higher rate unless they were present on admission.

'Some spin issues'

Stephen Frew, JD, a web site publisher ( and health care risk management specialist, has expressed skepticism about the motivation behind the rule, pointing out what he calls "some spin issues."

"Not all of these 'errors' are preventable in the best system, and patients often contribute to the events in ways that are beyond hospital control," he says. "Not paying for the 'errors' has a strong emotional appeal to the public, but what are the real costs and consequences going to be? I am not all that sure CMS has those even on the radar yet."

Frew raises the question of whether cutting payments to hospitals for these events will improve care so that after a while all providers are receiving full payment again, and says that he believes such an outcome to be unlikely.

"Once money is 'saved,'" he adds, "it has a way of disappearing into the great federal black hole, and it certainly does not occur to Congress to return it to the taxpayers — or to pay it to hospitals to cover the care of uninsured patients."

Frew predicts that private insurers will join in on the idea, and that balance billing will be one of the unintended consequences of the rule.

"Under Medicare, denied claims cannot be billed to the beneficiary, so the denied claim is just the hospital's loss," he says. "Similarly, most managed care plans and some states prohibit balance billing.

"What happens to patients who have private insurance that cannot enforce a 'no balance billing' rule because there is no state law?" Frew adds. "Odds are that the patient gets stuck with the bill."

That could lead, he suggests, to a second unintended consequence of the new CMS rule: "When patients get a notice that their care was not paid for because the hospital committed an unpardonable 'error,' many of them are going to seek out a malpractice lawyer, and these issues will suddenly become prima facie proof of malpractice."

Another concern, Frew says, is the cost of testing every patient admitted to the hospital to determine whether the person already had an infection.

The health care system would be better served, he contends, if CMS were to set aside more money — not less — and reward hospitals that reach goals for reduction in errors that the agency is concerned about.

"Maybe there are hospitals out there that would like to have more revenue and would do something to reduce risk to get higher reimbursement," he notes.

"Most of the [hospitals] I visit are working their hearts out to get these risks under control for a lot of reasons," Frew adds. "If it were just a simple matter of trying, all of these issues would have disappeared a long time ago."

(Editor's note: Keith Weatherman can be reached at