Enterprise Approach Key to Addressing CMS Final Rule on Hospital-Acquired Conditions

The Centers for Medicare & Medicaid Services (CMS) took a bold step in the direction of patient safety with the recently released final rule for its fiscal year 2008 hospital inpatient prospective payment system. Within this rule, CMS identifies certain conditions as events that are “reasonably preventable” during a Medicare beneficiary’s hospital stay and for which CMS may refuse payment beginning in October 2008. These events—referred to as “hospital-acquired conditions” within the final rule—are as follows:

The rule is eliciting a wide range of responses within the healthcare community. Patient safety advocates may view the rule as a necessary measure that will force hospitals to allocate sufficient resources to increase patient safety. Facility risk managers, patient safety officers, and clinicians may perceive the rule as an indictment that they are not trying their best to protect their patients and, worse, may believe that the rule will result in a reallocation of resources from current patient safety efforts to coding and billing efforts. Patients may erroneously fear that they will be ultimately responsible, directly or indirectly, for picking up the tab for any unpaid Medicare claims. Hospital executives may worry that the resources required for training staff about the new rules, nonpayment for certain hospital-acquired conditions, and the potential for more payers to adopt nonpayment policies may further strain their facility’s fiscal viability. Indeed, CMS is not an early adopter of nonpayment for certain events (e.g., HealthPartners, a Minnesota-based not-for-profit health maintenance organization, implemented a policy in 2005 of nonpayment for what the plan calls "never events").

Various viewpoints on the rule may exist within facilities as well. ECRI Institute recommends that, to fully understand how the rule may affect them, facilities adopt an enterprise risk management (ERM) approach, because the rule affects many operations within the facility. ERM is designed to identify, quantify, and mitigate selected risks using a multidisciplinary team approach,...