The annual Medicare payment error rate dropped to 5.8% in the fiscal year ended Sept. 30, compared with 6.3% in the previous fiscal year, and 13.8% in fiscal 1996, according to an annual CMS study. The error rate translates to an estimated cost of $11.6 billion, down from $23.2 billion when HHS' inspector general's office began the study in 1997. Medicare paid an estimated $13.3 billion in incorrect claims in 2002. The error rate represents the cost to Medicare of claims that include fraud and waste. The CMS took over the study from HHS' inspector general's office in 2002. Americans pay $50 billion annually for healthcare fraud, or about 3% of the estimated $1.67 trillion spent on healthcare, according to the National Health Care Anti-Fraud Association.
Hospital wholesale prices jump
Wholesale prices for general medical and surgical hospitals rose 1.6% in October-the biggest monthly increase ever recorded in the Producer Price Index since the U.S. Bureau of Labor Statistics began including hospitals in the index in December 1992. That boost in the PPI, which charts changes in revenue received by providers of goods or services, followed a 0.1% increase for hospital prices in September. Bureau spokesman Brian Catron said traditional changes in Medicare pricing in October probably played a role in the record increase for hospitals. In each of the past two years, October has been the month with the greatest hospital PPI increase-1.1% in October 2002 and 0.6% in October 2001. Also, the monthly measure of pricing showed a slight decrease of about 0.1% for physicians' offices after a 0.2% increase for doctors in September.
HealthSouth cases delayed
A federal judge in Birmingham, Ala., delayed the sentencing of five former HealthSouth Corp. executives who have pleaded guilty to fraud in the alleged $2.7 billion accounting scandal at the company until the size of shareholders' loss can be estimated. U.S. District Judge Inge Johnson said she needed additional time to determine the executives' punishment based on an updated figure of $2.8 billion in shareholder loss, about $1 billion higher than previously computed. In another development, the Jan. 5, 2004, trial of HealthSouth founder Richard Scrushy was indefinitely postponed, Reuters reported.
JCAHO requires infection control
The Joint Commission on Accreditation of Healthcare Organizations will require hospitals and other healthcare organizations to systematically head off deadly healthcare-associated infections under new standards that go into effect in January 2005. The JCAHO said hospitals will be required to make an infection-control program a major component of safety and performance improvement programs and to perform ongoing assessments to identify risks for transmission and acquisition of infectious agents. The Oakbrook Terrace, Ill.-based accrediting agency cited federal statistics that 2 million people acquire an infection each year while being treated in a hospital for other reasons and 90,000 die as a result. That's as many as who die from medical errors each year, according to estimates from the Institute of Medicine, although the medical-error problem has received more attention since a 1999 IOM report. Under the new standards, hospitals will have to use an epidemiological approach to conduct surveillance against infections, collect data and interpret the results.
Ohio GPO links with MedAssets
Northwest Ohio Shared Services, a regional group purchasing organization based in Toledo, affiliated with St. Louis-based MedAssets HSCA, giving its 185 hospital members access to MedAssets' national contract portfolio, officials said. The five-year agreement takes effect Jan. 1, 2004. Under the terms, Northwest Ohio, the supply chain arm of the Hospital Council of Northwest Ohio, will remain independent, not-for-profit and hospital-owned. Northwest Ohio previously was affiliated with St. Louis-based Amerinet. Its members purchase more than $100 million in supplies annually.