The financial impact of CMS not paying for certain hospital-acquired conditions is likely to be much lower than the federal agency estimated, according to researchers in California.
'Never-events' policy may save less than expected
Publishing in the latest Health Affairs, researchers from the University of California, San Francisco and the Palo Alto Medical Foundation Research Institute developed a model to study the financial impact to California hospitals of the CMS “never-events” policy. Using 2006 data from the state health department's discharge dataset, the researchers simulated the types of payment codes that CMS scrutinizes under its policy as grounds for not paying for care. The hospital-acquired conditions have to shift codes into a higher payment set in order for the CMS not to pay.
Of 767,995 Medicare discharges, only 828 had codes that corresponded to the terms of the CMS policy, according to the research. Under that model, hospitals in California would have lost between $92,000 and $227,000; if that number was extrapolated to all hospitals, there would be a reduction of between $1.1 million and $2.7 million nationally, the researchers said in their report. “Payment reductions were negligible and are unlikely to encourage providers to improve quality,” they wrote.
The agency has estimated saving $22 million over five years of its nonpayment policy.
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