The Medicare No-Pay Rule to Hospitals for Treating Preventable Complications

What if you gave a cookie to a child day after day for his behavior, whether it was good or bad? Would the child learn anything from it, or would he be encouraged to do as he pleased regardless of how damaging his behavior was? Rewarding a child’s good behavior by giving a cookie leads to more good behavior. Similarly, refusing to give a cookie when behavior is bad leads to correction of the bad behavior.

This principle is applied in the law every day, most recently in the area of Medicare payments to hospitals. In 2008, the Centers for Medicare & Medicaid Services (CMS), adopted a "no-pay" rule. Using our analogy, it is a “no-cookie” rule that encourages hospitals to reduce their malpractice rates. This is how it works: Medicare stopped paying for the treatment for preventable complications from hospitalization.

The largest category of complications was infections after surgery and after placement of urinary and central venous catheters, costing millions and millions of dollars to treat. Guess what happened after CMS stopped paying the hospitals to treat the preventable complications? Their behavior improved dramatically. For example, bloodstream infections from having catheters placed in blood vessels dropped 33%.

A random sample of infectious disease doctors in the U.S. was conducted two years after the no-pay rule was adopted. 81% of the doctors reported increased attention to prevention of hospital-acquired infections. Part of the reduction in preventable infections came from faster removal of catheters. When hospitals treated people appropriately, they got paid. If they committed malpractice, they didn't get paid to treat the problems they caused. A simple but profound change in the law made the difference.

Attorney Wes Pittman appears weekly during the noon news on local channel WJHG-TV. He covers a variety of topics. If you have a legal question, ask Wes!

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