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June 20, 2008

No pay for never events: Massachusetts edition

This week, Blue Cross Blue Shield of MA and the Commonwealth -- primarily through MassHealth (MA Medicaid) -- announced they would adhere to the Leapfrog no pay for never events policy.

According to a news story from about 9 months ago, half of the state's hospitals had already determined that they would not bill for never events.  Furthermore, the Massachusetts Hospital Association's members have previously all agreed to no pay for nine specified never events (vs. Leapfrog's 28 never events, and CMS's ever-growing list).  Thus, it seems that the impact of this week's announcement -- while notable -- is less than what is being touted.

As I've noted in the past, the Leapfrog approach is notable in that it not only addresses the no pay piece of the puzzle, but it also calls for apologies.

Update 6/20/08:  Leapfrog CEO Leah Binder chimed in with the following email this afternoon, reproduced here with her permission:

Thank you for making the point in your blog that the key element of Leapfrog’s never events policy is our insistence that the hospital apologize to the patient.  The aspect of our policy that gets the most attention has been our policy that providers should not bill for never events.  However, as you note, the apology is even more important to patients and to the employers Leapfrog represents.  Whatever business transactions are involved (ie the billing), at its core our health care system is a quintessentially human institution where very vulnerable people rely on the caring and compassion of others. Without an apology, a never event grows even more offensive: it becomes a betrayal of that sense of humanity and compassion that motivates Americans to invest enormous resources in our health care system.  The apology reminds us that compassion for the patient is the critical part.

Thanks again for making the point.
Leah F. Binder, MA, MGA
Chief Executive Officer
The Leapfrog Group

(And follow the link to see more HealthBlawgging on medical apologies.)

Refusal to pay does not eliminate all of the services that are used in the event of a never event  -- could we ever have a zero HAI rate, even if HAI is a never event? -- and those costs will be shifted elsewhere in the system.  Furthermore, payors aren't necessarily going to be able to identify no-pay events, and hospitals note that some no-pay events may be attributable to the actions or omissions of folks beyond the hospital's control (e.g., an infection attributable to supplier manufacturing practices and undetectable and unaddressbale by the hospital).

Well, it's not a panacea; the no pay policy is just one arrow in the quiver.

-- David Harlow

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