Thursday, August 30, 2007

Medicare Reimbursement: To Tell the Truth

If you were paying attention to the news last week, you heard comments about the new standards for Medicare reimbursement to hospitals for 2008, published by the Centers for Medicare/Medicaid Services (CMS). While there are a number of changes involved, the change getting the most attention has been a decision not to reimburse for care that results from “avoidable errors.” You can see some of the news reports here or here.

At first blush, this seems a very reasonable decision. Avoidable errors do result in injuries to patients, and additional costs in increased acuity, extended stays, and all the added expenses of personnel and materials that go with them. The notorious cases – the surgeon who amputates the left leg when it is the right that is diseased, or who leaves a sponge or instrument inside a patient when closing after the procedure – bear the added “expense” for us of loss of trust in physicians and hospitals, and corollary anxiety.

At the same time, there are some questions that I think need to be addressed, and that I haven’t seen in the news reports. Some of them may be answered in the proposed Final Rule, as published in the Federal Register (if you’re interested, you can access it here; but like many such publications it runs to more than 2100 pages). Some of them will almost certainly have to be worked out in hard adjudication. Here are those that occur to me.

Mistakes happen. How do we discern in principle what is an “avoidable mistake?” Some cases will be clear, but I expect most will not be.

When a mistake happens, who is accountable? Mistakes may be made by doctors, but this is the Final Rule on Hospital Reimbursement. How will the Rule balance culpability?

What if the patient is culpable? It is not uncommon for patient to withhold information from providers because in the patient’s opinion the information is “unrelated” or “unimportant.” It’s not uncommon for that withheld information to be in fact very important. If it results in additional costs, how will Medicare
hold the patient accountable?

Will this not simply shift costs from the back end to the front? More specifically, will this not result in additional tests in the beginning of a patient’s process so as to not miss anything? In times past there have been allegations of unnecessary and expensive testing by physicians and hospitals so as to avoid litigation. Now, perhaps, it will be to avoid losing reimbursement.

More basically, we have worked for some time in health care to develop a “non-punitive” environment - one in which professionals can admit mistakes because they don’t fear punishment, except in particularly egregious cases like those above. Mistakes are seen as problems of the system, and human beings are trusted to be doing their best, even if sometimes it isn’t enough. By working to develop better systems, so the theory goes, opportunities for human error are significantly reduced, and patient better served. By encouraging reporting, we identify the ways in which we need to improve the systems.

We’ve also been encouraging – indeed, by policy and procedure, requiring – professionals to admit when unexpected and unwanted consequences occur. It has numerous benefits over the old “admit nothing, lest ye be sued” attitude. Patients and families feel they are treated with more respect and sensitivity, and that their providers are more trustworthy. One corollary result is that physicians and providers are in fact sued less often, rather than more often; and that when sued the financial consequences are significantly less.

There are also greater and greater requirements for hospital quality and performance information to be available to the public. More and more information will be available for patients at Medicare and other web sites. The justification is that better informed patients will make better decisions about their care, resulting in better (and perhaps less expensive) care. Another part of the Final Rule specifies that hospitals that do submit quality data will be reimbursed at a (slightly) higher rate than those who don’t.

But how will this new Final Rule affect this? Will providers feel they need to withhold information about mistakes and unfortunate results lest Medicare refuse payment for patient needs? Will it feel riskier for providers at all levels to provide the information necessary to improve patient care? Will it feel riskier for providers to acknowledge mistakes that happen when it’s unclear what makes a mistake “avoidable?”

Perhaps CMS isn’t worried about this. As the 800-pound gorilla in the room, perhaps officials at CMS feel sufficiently powerful that physicians and hospitals and other providers will simply have to comply. At the same time, I think these are important questions, and I’m sure representatives for providers will raise them. I think we need to raise them as well.

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