By Katherine M. Keefe, Esq
Many hospitals are gearing up to comply with new rules under which payment will not be made for treating certain conditions and infections arising in the hospital. These rules have become popularly known as “Never Events” rules, although the Medicare program, state Medicaid agencies and private payers have different names for these new payment methods. While for the immediate future these rules impact hospital payments, physicians play an important role in hospital compliance. Physicians also must stay alert for the inevitable use of these payment rules in the medical malpractice arena.
The Medicare program, administered by the Centers for Medicare and Medicaid Services (CMS), has formalized these rules in regulations published in August, 2007. CMS characterized the rules as the Hospital-Acquired Conditions/Present on Admission (HAC/POA) rules; the rules apply to hospitals paid under Medicare’s Inpatient Prospective Payment System (IPPS). CMS considers these rules to be part of its larger Value-Based Purchasing (VBP) initiative and it has acknowledged the likelihood that similar Medicare payment rules will eventually apply to other kinds of health care providers. Additionally, some state Medicaid programs, including Pennsylvania’s, are implementing similar payment restrictions for conditions arising in the hospital. Private commercial health insurers are also following suit by including such payment restrictions in provider agreements.
CMS’s efforts are not occurring in a vacuum and are responsive to many legislative and policy concerns regarding patient safety and cost-effective health care. Other organizations and interest groups are weighing in, including the National Quality Forum (NQF), a non-profit membership organization created to develop and implement a national strategy for health care quality, which published reports identifying 28 serious reportable events and providing evidence-based implementation guidance.
The federal Deficit Reduction Act of 2005 (DRA) required that effective October 1, 2007 hospitals must report secondary diagnoses that are present on admission (POA) and that CMS must select at least two hospital-acquired conditions (HACs) that (1) are high-cost, high-volume or both; (2) result in the assignment of a case to a Diagnostic Related Group (DRG) that has a higher payment when present as a secondary diagnosis; and (3) could reasonably be prevented through the application of evidenced based guidelines. The DRA further required that, for acute care inpatient discharges after October 1, 2008, CMS cannot assign cases with a HAC to higher paying DRGs unless the condition was POA. In other words, after this coming October 1st, Medicare will no longer pay hospitals for additional services required to treat a HAC that was not POA.
Using the criteria mandated by the DRA, CMS collaborated with the Centers for Disease Control (CDC) to identify a list of HACs. While the law mandated the identification of at least two HACs initially, in the final 2008 IPPS regulations issued on August 22, 2007, CMS identified eight HACs for which reporting is now required and for which payment impacts will be felt after this October: object left in surgery, air embolism, blood incompatibility, catheter-associated urinary tract infection, decubitus ulcers, vascular catheter-associated infection, surgical site infection—mediastinitis after CABG and falls under specific trauma codes.
CMS characterized objects left in surgery, air emoblism and blood incompatibility as HACs that are Serious Preventable Events (more popularly known as “Never Events.”) CMS published POA Indicator guidelines which designate the POA codes to be used in identifying the specified conditions, and indicated that after April 1, 2008, Medicare would return and not pay hospital claims that do not correctly capture the POA coding.
In the preamble provisions issued with the 2007 regulations, CMS provided an analysis of each HAC it considered using the three statutorily-mandated selection criteria and also provided additional insight into its selection process and responded to input received through the rulemaking’s public comment period. CMS applied the three criteria in selecting the HACs, including the criteria that the HAC could reasonably be prevented through the application of evidenced-based guidelines. For each HAC, CMS discussed the specific available prevention guidelines and provided sources for obtaining the specific guidelines, including web addresses.
For example, in its discussion of catheter-associated urinary tract infections, CMS stated in the regulation’s preamble: “There are widely recognized guidelines for the prevention of catheter-associated urinary tract infections. Guidelines can be found at the following Web site:
http://www.cdc.gov/ncidod/dhqp/gl_catheter_assoc.html. In its response to commenters who raised the concern that prevention guidelines for this HAC are unsettled, CMS cited the efforts underway by the CDC and the NQF to update the prevention guidelines as evidence that this HAC is appropriate for inclusion in the rules.
Additional HACs Proposed
On April 14, 2008, CMS proposed nine new additional HACs to be effective for fiscal year 2009. The proposed additional HACs are: certain surgical site infections, Legionnaires’ disease, certain glycemic control diagnoses, iatrogenic pneumothorax, delirium, ventilator-associated pneumonia, deep vein thrombosis/pulmonary embolism, staphylococcus aureus septicemia and clostridium difficile-associated disease. CMS sought comments on the extent to which these proposed new additional HACs meet the statutory selection criteria, and anticipates that a final rule regarding additional new 2009 HACs will be issued in August.
Physicians’ Role in Hospital Compliance
Physicians who provide or impact inpatient care in hospitals paid under IPPS, while not necessarily directly impacted by the hospital reporting and payment requirements of the HAC/POA rules, play a huge role in implementation of and compliance with the rules. In a transmittal, CMS “indicated that a joint effort between the health care provider and the coder is essential to achieve complete and accurate documentation” is essential, and also stated that “the importance of consistent, complete documentation in the medical record cannot be overemphasized.” Hospitals implementing the HAC/POA rules may ask medical staff members to participate in training and education sessions and/or to comply with new policies and procedures regarding conducting patient screenings in order to better identify HACs that are POA. Hospitals may also expect affiliated physicians to participate in query processes for remediating inconsistent, missing, conflicting or unclear documentation.
Medical Malpractice Implications
As the HAC/POA requirements and similar initiatives by other payers are fully implemented, in addition to creating new compliance, coding and medical records documentation challenges, they are also likely to raise a number of questions of importance in the medical malpractice context. Some of these questions include whether the requirements essentially allow payers including CMS to determine the appropriate standard of care, and whether the requirements will define what is a preventable error in medical malpractice cases.
Particularly in light of the endorsement by CMS of specific prevention guidelines for each HAC, physicians could be on the receiving end of a medical malpractice plaintiff’s argument that failure to follow these regulatorily-anointed guidelines constitutes evidence of negligence per se. While under Pennsylvania case law, evidence of a statutory violation can amount to negligence per se, it must be proven that the purpose of the law alleged to have been violated must be, at least in part, to protect the interest of a specific group or individual. It can likely be shown that the DRA’s HAC/POA requirements are intended to address payment appropriateness and data reporting, and were not intended to protect the interests of a defined individual or group. Therefore, countering such a malpractice plaintiff’s argument, under Pennsylvania law, a failure to follow the HAC/POA evidenced based guidelines should not constitute negligence per se.
Another question might be whether and to what extent a hospital’s payment, or lack thereof, based on a HAC that was not POA, be permitted to be introduced as evidence in a malpractice suit. To support a malpractice claim, a plaintiff may try to bring in evidence that a hospital was not paid, or had payments reduced, for care that was necessary to treat a HAC that was not POA. Under the Pennsylvania Rules of Evidence, evidence must be relevant to the core issue and not confusing to the jury. HAC/POA payment amounts would not necessarily be relevant to support negligence or negligence per se claims, and further, explaining such payments in the context of the Medicare hospital IPPS methodology may well be confusing to a jury.
Physicians may also need to consider whether the role of the medical expert will change or be influenced by the HAC/POA requirements, particularly if a plaintiff alleges that, given that CMS has blessed prevention guidelines, medical experts are no longer necessary. However, the prevention guidelines alone would not satisfy the Pennsylvania MCARE Act’s numerous and specific requirements for the qualifications of medical experts testifying as to standard of care, nor would the guidelines alone meet the degree of medical certainty” standard established under Pennsylvania law.
While these questions and responses raised by the HAC/POA rules are somewhat speculative, as the rules are new and not yet fully implemented, the potential for impact in the malpractice arena is real. Hospitals and physicians should continue to monitor the implementation of the HAC/POA rules for operational, reimbursement and legal impacts – impacts which may be both intended and unintended.
Katherine M. Keefe, Esq., is a shareholder and head of the Health Law Group within the Health Care Liability Department of Marshall, Dennehey, Warner, Coleman & Goggin, in the firm’s King of Prussia office.