June 28, 2022

Volume XII, Number 179


June 27, 2022

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Understanding Never Events

Hospitals and their staff are under increasing pressure to avoid "Never Events," those serious outcomes that supposedly ought never to happen but inevitably sometimes do. They range from the obvious, such as wrong-site surgery, to the strange, such as releasing a baby to the wrong parents, to the criminal, such as sexual assault, to the not-entirely-preventable, such as some post-surgical infections. Some of them are easy to address, but others are not. While markers and time-outs can all but eliminate wrong-site surgery, the incidence of post-surgical infections can be reduced but not eliminated. All these events require increasingly close attention.

This article touches on four topics. What is pushing hospitals to address Never Events, and why? What are these events? How does North Carolina compare to the rest of the country right now? What can be done to reduce the incidence?

Who’s Pushing to Address Never Events?

Recently, Medicare has been pushing to prevent Never Events, but the push began in the private sector. Following a 1999 Institute of Medicine study identifying medical errors as a leading cause of illness and death in the United States, the National Quality Forum ("NQF"), a not-for-profit organization "created to develop and implement a national strategy for health care quality measurement and reporting," identified 28 serious preventable conditions, including events such as wrong-site and wrong-patient surgeries, foreign object retention post surgery, and discharge of an infant to the wrong person. The Leapfrog Group, a group of private companies that purchased health care for their employees, was created for the purpose of focusing on health care quality improvement and affordability, and many private insurers have used this list in an attempt to improve quality and health care affordability. These events have come to be known as Never Events. For example, by late 2006, the Leapfrog Group developed a policy for hospitals to handle Never Events that some hospitals have adopted. The Leapfrog policy requires issuing an apology to the patient and family involved in the event, reporting the event to an accrediting agency such as JCAHO, performing a root cause analysis per the accrediting agency’s instruction, and waiving all costs directly related to the event.

Turning to the government, the Deficit Reduction Act of 2005 requires the Secretary of the U.S. Department of Health and Human Services ("DHHS") to identify at least two reasonably preventable high-cost conditions that result in higher payment when they occur in a patient as a secondary diagnosis. The Act anticipated that identifying such conditions would encourage efficiency and quality in patient care. By the time the Centers for Medicare and Medicaid Services ("CMS") issued a Final Rule on August 22, 2007, it had decided to exclude payment for several conditions that it deems to be hospital-acquired conditions ("HACs") when those HACs occur during a Medicare beneficiary’s inpatient stay. About a year after its initial adoption of several Never Event policies in 2007, CMS issued a Final Rule for the 2009 Inpatient Prospective Payment System ("IPPS"), in which it expands its exclusions for HACs. Some of CMS’ actions reflect the work of NQF and Leapfrog.

Since October 1, 2007, CMS has required hospitals to report a HAC or Never Event on their Medicare claims if the HAC or Never Event was present at the time the patient was admitted to the hospital. The hospital does this on admission by adding a code to the primary medical severity adjusted diagnosis related group (MS-DRG) to indicate the presence of a complicating condition.

What are the Never Events?

The following is a complete list of those Never Events which CMS will exclude from payment if they are HACs. In other words, Medicare will pay for the main hospital stay but will not pay for treatment related to the following secondary diagnoses, unless the secondary diagnosis was present upon the patient’s admission to the hospital:

  • Foreign object retained after surgery
  • Air embolism
  • Blood incompatibility
  • Stage III and IV pressure ulcers
  • Falls and trauma (fractures, dislocations, intracranial injuries, crush injuries, burns, electric shocks)
  • Manifestations of poor glycemic control (diabetic • ketoacidosis, nonketotic hyperosmolar coma, hypoglycemic coma, secondary diabetes with ketoacidosis or hyperosmolarity)
  • Catheter-associated urinary tract infection
  • Vascular catheter-associated infection
  • Surgical site infection (mediastinitis post CABG, bar• iatric surgery, orthopedic procedures)
  • Deep vein thrombosis or pulmonary embolism (total • knee replacement, hip replacement)

Of course, if the hospital is not paid under the Medicare IPPS system, it will not be subject to these same HAC exclusions. However, a number of private insurance carriers have adopted policies under which they will not pay for care related to serious preventable errors, sometimes claiming that this exclusion falls within the ambit of care that is not medically necessary and is, therefore, not compensable.

Where Does North Carolina Stand in Responding to the Push Against Never Events?

This is not immediately apparent, because every hospital’s response is a bit different from every other’s. Some hospitals have long-standing policies under which they will not bill Medicare or even a private insurer for serious preventable errors. Such hospitals may be ahead of the curve in responding to the CMS restrictions. Some get favorable reports from organizations such as Leapfrog. However, according to the Leapfrog Group, less than 35 percent of the hospitals in North Carolina have reported implementing its suggested policies, compared to 90 percent of the hospitals in some other states. So North Carolina is clearly not as far along as some states. Of course, no hospital can ignore the CMS regulations, so pressure for change is mounting.

What to Do?

Some vital lessons for hospitals and their employees are obvious. Fully assess a patient upon admission and document the presence of any and all conditions, including pressure ulcers, secondary injuries and items like a history of falls. If the condition developed before hospitalization, it is not a HAC. Develop and enforce a policy of identifying and responding to events that fall within the Never Event category. Educate staff, particularly physicians, nurses and other direct patient care providers, on identification, prevention and response to Never Events, as well as documentation of these phases. Even if you cannot be paid for the case at hand, you can prevent similar situations in the future. Billing and coding personnel must also be educated on the process for coding and submitting bills when complicating conditions are present. Failure to code correctly could, over time, lead to compliance investigations and even the possibility of false claim allegations. At the end of the day, however, do not let the fact that some Never Events will happen deflect efforts to reduce them to a minimum.

For more information on CMS’s efforts toward identifying and refusing payment for Never Events, please see https://www.cms.gov/HospitalAcqCond/.

© 2022 Poyner Spruill LLP. All rights reserved.National Law Review, Volume , Number 231

About this Author

Steven Mansfield Shaber, Poyner Spruill Law Firm, Health Law Attorney

Steve has spent his entire career in health law -- first with the North Carolina Attorney General's Office and, since 1985, in private practice. His clients range from large hospitals to sole practitioners. Most of his work focuses on Medicare and Medicaid fraud & abuse, false claims, hospital medical staff matters, and professional licensing board cases. His cases have involved patient deaths, million-dollar claims for recoupment, and other urgent matters. Steve has also helped providers with a number of innovative business transactions. He speaks frequently to various...