Insurer adopts stricter policy on 'never event' coverage
CHICAGO -- In health care, the customer is not always right. But now Illinois patients are getting a little more clout. Signaling an industry-wide shift toward practices long common in other areas of business, the state's largest health insurer w...
CHICAGO -- In health care, the customer is not always right.
But now Illinois patients are getting a little more clout. Signaling an industry-wide shift toward practices long common in other areas of business, the state's largest health insurer will soon begin waiving fees for bad service.
If a hospital commits a serious error -- such as leaving a sponge in a patient's chest after open-heart surgery or causing a prolonged illness by mixing up a patient's medication -- Blue Cross and Blue Shield of Illinois says it will no longer pay the claim.
The idea is that forcing hospitals to absorb those costs will create an incentive to improve quality of care. It comes amid growing demands from employers, consumers and taxpayers to make providers of medical care more accountable and eliminate errors, at a time when health insurance costs continue to rise.
Large employers, lawmakers and the Bush administration have been pushing in recent years to get hospitals to commit to apologizing for "never events" -- medical errors that should never happen -- and waive the costs to their customers.
Other private insurers such as Aetna Inc. also are moving to implement "never events" policies as they negotiate renewals of their contracts with hospitals. As of October, the Medicare health insurance program for the elderly -- the nation's largest payer to hospitals -- will no longer pay if the government can determine that a serious medical error or a deadly infection occurred in the hospital.
Employer groups say the new policies on never events make sense and believe they could be extended to cover less serious problems customers run into in health care facilities. After all, if you go to a restaurant and get a bad meal, it's common not to pay for it, and lemon laws allow car buyers to get their money back if the vehicle doesn't work.
Never events are rare, and insurers say they typically aren't billed for the most egregious errors, such as removal of the wrong limb. Those errors often lead to malpractice suits instead. But there are many other instances in which patients or their employers end up paying more money because of hospital error, such as a redo of a botched surgery or a longer hospital stay because of an infection.
"The majority of hospitals do not bill us for never events, but given the complexity of billing, billing systems and billing agencies, some never events may slip through," said Illinois Blue Cross spokesman Jack Segal. "With this new policy in place, we can work to close the gaps, and also focus on improving quality."
Segal would not disclose a list of which serious errors the insurer would not pay for, saying those details had not been finalized.
The new payment policy is expected to be implemented by the end of the year at Illinois Blue Cross and three other Blue Cross plans that operate under the Illinois plan's parent, Chicago-based Health Care Service Corp. The nation's fourth-largest insurer, it has 12.4 million members, including 7.4 million in Illinois.
Despite the name, never events do happen.
Minnesota, which requires hospitals and surgery centers to report such events, counted 125 last year out of more than 8 million admissions. The most common were severe bedsores, surgeries performed at the wrong site and foreign objects left in patients after surgery.
A 2003 study in the New England Journal of Medicine reported that sponges and other foreign objects were left behind in 1 out of every 1,000 to 1,500 abdominal surgeries. Depending on the procedure, it can cost $50,000 or more to perform surgery to retrieve a sponge, insurers say.
Hospital representatives say they generally support the policies insurers are developing.
"We are committed that patients and payers not pay for care related to a never event that was within the hospital's control and preventable," said Elena Butkus, vice president of finance for the Illinois Hospital Association, which represents about 200 of the state's hospitals.
But officials also worry that other events may be added to the no-pay list that fall into a gray area. For example, certain infections commonly acquired in hospitals can be brought in by patients instead, said Butkus, who cited Legionnaires disease, a potentially deadly bacterial infection that causes pneumonia.
"There is no way to know whether that condition was there or whether it was under the hospital's control to begin with," Butkus said. "You would have to test everybody before they arrived at the hospital."