Medicare's policy to stop paying for medical errors is similar to a move launched three years ago by HealthPartners.
Three years ago, a Minnesota health insurer said it would stop paying for things that should never happen to patient in a hospital, such as leaving a sponge in the body after surgery.
The move by HealthPartners sparked an uproar. Hospitals complained that it would discourage staff from reporting errors. Patients worried they'd be hit with a fat bill if the insurer refused to pay.
Now Medicare officials are taking a leaf out of Bloomington-based HealthPartners' playbook. Starting next year, the Centers for Medicare and Medicaid Services (CMS) will stop paying for eight hospital-associated conditions widely seen as preventable.
Medicare not only is rolling out the controversial concept nationwide, it's including common hospital infections that affect a much wider swath of patients. The money Medicare hopes to save isn't a lot -- just $20 million a year from its budget of $400 billion. But it's a significant shift from the usual tactic of paying hospitals and physicians bonuses for sticking to medical guidelines and may prod private insurers to follow suit.
"We see this as a marker of success, that our policy on this raised awareness nationally," said Babette Apland, senior vice president for health and care management at HealthPartners.
Some unusual conditions in Minnesota prompted HealthPartners' action. In 2004, Minnesota was the first state to require hospitals to report serious medical errors, making it possible to track them.
Whether something like this can work nationally or becomes an administrative nightmare remains to be seen. Even Minnesota hospitals, ahead of those in most other states when it comes to patient safety initiatives, foresee some difficulties with the new policy.
But Medicare officials seem undaunted.
"We hope this creates a lot of discussions [in hospitals]," Herb Kuhn, director of the Center for Medicare Management, told reporters. "This is not only critical to the success of the Medicare program ... but absolutely critical to [hospitals'] success."
Fewer than 10 'never events'
In its policy, HealthPartners chose not to cover 27 types of "never events" identified by the National Quality Forum, a health-industry think tank -- events so egregious that they should never happen. They include such errors as operating on the wrong limb or the wrong patient.
Since the HealthPartners policy took effect in January 2005, the insurer has been billed for fewer than 10 never events. Other errors were caught by hospitals before billing HealthPartners, but the insurer has not tracked those.
Nor has it tallied savings. Since such serious errors are rare, the policy was never intended as a big money-saver, Apland said.
After the policy was announced, HealthPartners received inquiries for information from state agencies and health plans around the country, Apland said. HealthPartners officials met several times with Medicare and the Leapfrog Group, a health quality coalition of big employers, to share their experience, she said.
In Minnesota, some of the initial dismay has dissipated.
"Hospitals have fully embraced the notion that no one should pay for these events. Most of the time, they catch it before it gets into billing," said Bruce Rueben, president of the Minnesota Hospital Association and an early critic of the HealthPartners policy.
Rueben said he expects other private insurers to follow Medicare's lead. Blue Cross and Blue Shield of Minnesota and Medica said they are studying the issue.
Nor has the move driven reporting of errors underground. Many hospitals are organizing care around teams, and it's increasingly difficult for any individual to hide an error.