The Relevance of 'Never Events' in Medical Malpractice Litigation

The National Quality Forum, a nonprofit organization that aspires to set priorities and goals for improvement in health care in the United States, established the concept of “Never Events” in 2001, which consists of a list of serious complications that should never occur in a safe hospital. Arnold Milstein, Ending Extra Payments for “Never Events” ' Stronger Incentives for Patients Safety, 360 (23) New Eng. J. Med. 2388, 2388-90 (2009).

On Feb. 8, 2006, President George W. Bush signed the Deficit Reduction Act of 2005, Section 501(c) of Pub. L. 109-171, instructing the Department of Health and Human Services (the Department) to create its own list of Never Events, so that Medicare payments could be decreased when preventable complications occur in hospitals. To that end, on Oct. 1, 2008, the Centers for Medicaid and Medicare Services (CMS) identified eight categories of complications for which it would no longer reimburse hospitals if they developed during a hospital admission. With later expansions, the list now includes:

• foreign objects left in the body after surgery;
• air emboli;
• infusion of incompatible blood;
• falls and traumas;
• catheter-associated urinary tract infections;
• mediastinitis after coronary-artery bypass grafting;
• certain infusion associated infections;
• pressure ulcers;
• poor glycemic control;
• deep-vein thrombosis or pulmonary embolism associated with knee or hip replacement surgery; and
• certain orthopedic and bariatric surgical-site infections.

Additional Considerations

In January 2009, CMS went further and indicated that it would cease payments to hospitals and physicians when surgery was performed on the wrong patient, when the wrong surgical procedure was performed, or when surgery was performed on the wrong side or wrong body part. These actions of federal regulators were said to be an effort to “align financial incentives with the quality of care, thereby promoting both quality and efficiency.” Sharon K. Inouye, et al., Medicare Nonpayment, Hospital Falls, and Unintended Consequences, 360 (23) New Eng. J. Med. 2390, 2390-92 (2009).

The trend doesn't stop there. Major private insurers have decided to follow the lead of the federal government by adopting similar reimbursement denials when patients have been harmed in hospitals through categories of preventable medical errors. Among these insurers are Aetna Inc., Cigna HealthCare, Anthem Blue Cross Blue Shield in New Hampshire, Blue Cross Blue Shield of Massachusetts and WellPoint. Rachel Morgan, R.N., National Conference of State Legislatures, Medicare Nonpayment for Medical
Errors, (2008), http://www.ncsl.org/Portals/1/documents/health/MCHAC.pdf. And in July 2008, CMS contacted all State Medicaid Directors and urged them to adopt policies echoing its
denial of payments for Never Events in order to avoid the potential negative fiscal impact that non-payment of Never Events by Medicare might have on states, given the problem of dual eligibility under these plans. Id.

Conclusion

Clearly, refusing payment for avoidable medical expenses is a public policy trending toward expansion. So, what impact can we expect this policy to have on medical malpractice litigation? We will discuss some answers to this question in next month's newsletter.

John Ratkowitz, a member of this newsletter's Board of Editors, is a partner at Starr, Gern, Davison & Rubin, P.C., in Roseland, NJ. Robert Sanfilippo is an associate at the firm.

The National Quality Forum, a nonprofit organization that aspires to set priorities and goals for improvement in health care in the United States, established the concept of “Never Events” in 2001, which consists of a list of serious complications that should never occur in a safe hospital. Arnold Milstein, Ending Extra Payments for “Never Events” ' Stronger Incentives for Patients Safety, 360 (23) New Eng. J. Med. 2388, 2388-90 (2009).

On Feb. 8, 2006, President George W. Bush signed the Deficit Reduction Act of 2005, Section 501(c) of Pub. L. 109-171, instructing the Department of Health and Human Services (the Department) to create its own list of Never Events, so that Medicare payments could be decreased when preventable complications occur in hospitals. To that end, on Oct. 1, 2008, the Centers for Medicaid and Medicare Services (CMS) identified eight categories of complications for which it would no longer reimburse hospitals if they developed during a hospital admission. With later expansions, the list now includes:

• foreign objects left in the body after surgery;
• air emboli;
• infusion of incompatible blood;
• falls and traumas;
• catheter-associated urinary tract infections;
• mediastinitis after coronary-artery bypass grafting;
• certain infusion associated infections;
• pressure ulcers;
• poor glycemic control;
• deep-vein thrombosis or pulmonary embolism associated with knee or hip replacement surgery; and
• certain orthopedic and bariatric surgical-site infections.

Additional Considerations

In January 2009, CMS went further and indicated that it would cease payments to hospitals and physicians when surgery was performed on the wrong patient, when the wrong surgical procedure was performed, or when surgery was performed on the wrong side or wrong body part. These actions of federal regulators were said to be an effort to “align financial incentives with the quality of care, thereby promoting both quality and efficiency.” Sharon K. Inouye, et al., Medicare Nonpayment, Hospital Falls, and Unintended Consequences, 360 (23) New Eng. J. Med. 2390, 2390-92 (2009).

The trend doesn't stop there. Major private insurers have decided to follow the lead of the federal government by adopting similar reimbursement denials when patients have been harmed in hospitals through categories of preventable medical errors. Among these insurers are Aetna Inc., Cigna HealthCare, Anthem Blue Cross Blue Shield in New Hampshire, Blue Cross Blue Shield of Massachusetts and WellPoint. Rachel Morgan, R.N., National Conference of State Legislatures, Medicare Nonpayment for Medical
Errors, (2008), http://www.ncsl.org/Portals/1/documents/health/MCHAC.pdf. And in July 2008, CMS contacted all State Medicaid Directors and urged them to adopt policies echoing its
denial of payments for Never Events in order to avoid the potential negative fiscal impact that non-payment of Never Events by Medicare might have on states, given the problem of dual eligibility under these plans. Id.

Conclusion

Clearly, refusing payment for avoidable medical expenses is a public policy trending toward expansion. So, what impact can we expect this policy to have on medical malpractice litigation? We will discuss some answers to this question in next month's newsletter.

John Ratkowitz, a member of this newsletter's Board of Editors, is a partner at Starr, Gern, Davison & Rubin, P.C., in Roseland, NJ. Robert Sanfilippo is an associate at the firm.