Insurers Stop Paying for Care Linked to Errors

Health Plans Say New Rules Improve Safety and Cut Costs; Hospitals Can't Dun Patients

Health insurers are taking a new tack in a bid to improve patient safety and reduce health-care costs: refusing to pay -- or let their patients be billed -- for hospital errors.

Aetna Inc., WellPoint Inc. and other big insurers are moving to ban payments for care resulting from serious errors, including operating on the wrong limb or giving a patient incompatible blood.

See the National Quality Forum's list of 28 medical errors, for which some insurers may refuse payment.

The companies are following the lead of the federal Medicare program, which announced last summer that starting this October, it will no longer pay the extra cost of treating bed sores, falls and six other preventable injuries and infections that occur while a patient is in a hospital. The following year, it will add to the list hospital-acquired blood infections, blood clots in legs and lungs, and pneumonia contracted from a ventilator.

Private insurers are looking first at banning reimbursements for only the gravest mistakes. But health-insurance executives say it is only a matter of time before the industry also stops paying for some of the more common and less clear-cut problems that Medicare is tackling, such as hospital-acquired catheter infections or blood poisoning. "I'd rather have the cudgel in place first than push the list too far," says Aetna President Mark Bertolini.

Some hospitals and others are concerned that the new strategy could drive up medical costs in other ways as hospitals absorb or pass on the expense of introducing the safety and screening procedures needed to help avoid mistakes.

Ultimately, insurers say, the efforts will trigger safety improvements and savings for patients.

Leading the Way

Medicare soon won't pay for certain hospital injuries, including:

Aetna, the country's third-largest insurer by number of members, is beginning to stipulate in hospital contracts up for renewal that it will no longer pay nor let patients be billed for 28 different "never events." Compiled by the National Quality Forum, a coalition of physicians, employers and policy makers, these mistakes include leaving an instrument in a patient after surgery, the death of a mother in a low-risk pregnancy, allowing a patient to develop bedsores or using contaminated devices. Such errors are so egregious "there can't be any argument that they should ever happen," says Troy Brennan, Aetna's chief medical officer.

WellPoint, the largest insurer, is testing the same approach in Virginia with four errors from the forum's never-events list, including leaving a sponge or other object in a patient after a procedure and performing the wrong procedure. It plans to extend the policy soon to its plans in New England, New York and Georgia. UnitedHealth Group Inc. and Cigna Corp. say they're exploring policies similar to Medicare's. The Blue Cross Blue Shield Association says that its 39 member health plans are looking at approaches similar to Aetna's or working with hospitals on reducing errors.

The National Quality Forum's so-called never events are rare enough that private insurers say they don't expect to see a big financial savings at first. In Minnesota, where hospitals are required by law to report such errors, 154 never events were reported last year out of nine million hospital admissions. Rather, the idea is to spur more attention to safety and public reporting of mistakes.