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Medicare's 'No-Pay' HAI Policy Reshifts Hospital Priorities

Cheryl Clark, for HealthLeaders Media, May 3, 2012

What's been the impact of the 2008 law that empowered Medicare to refuse payment for additional care necessitated by so-called "never events" such as wrong-site surgeries and healthcare-associated infections that should never be allowed to happen?

The Centers for Medicare & Medicaid Services initially estimated it would avoid spending $20 million the first year the policy was in place and $50 million in subsequent years.

As it turns out, Medicare hasn't avoided much spending, because most patients who incurred harm were already so sick, their disease co-morbidities resulted in diagnostic codes that paid higher payments for their care anyway. One 2010 report pegged the non-payments to hospitals as low as $2.4 million nationally.

But even if the "no-pay-for-harm" law hasn't dented hospital revenue, it has prompted hospitals to increase attention at the front lines to avoid healthcare associated infections. These efforts, however, come at the expense of other quality endeavors, according to a report from Harvard Medical School researchers.

"With the advent of the CMS HAC policy, the vast majority, three-quarters of hospitals, didn't get additional funding in order to be able to respond to the policy," says Grace Lee, MD, of Harvard Pilgrim Health Care Institute and lead author of a report in the American Journal of Infection Control which surveyed infection preventionists at 317 hospitals in the country.

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