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June 2008

States, Federal Government, and Private Plans End Payment for “Never Events”

Early this month, the New York Department of Health announced that it will no longer pay for 14 “never events” in their Medicaid program. They joined a growing group of payers and providers who are working to combat serious, preventable errors in hospitals.  “Never events” are defined as preventable errors in the medical system that should never occur.  Other related recent events include the following:

  • In August 2007, the Centers for Medicare and Medicaid Services (CMS) announced that, effective October 2008, they would stop paying for 8 “never events” in the Medicare program. 
  • In November 2007, the BlueCross BlueShield (BCBS) Association set a national governance policy to stop paying for “never events.”  Local BCBS plans will still need to implement the policy. 
  • On January 4, 2008, the Vermont Hospital Association announced that they will stop charging for “never events.”  They join Minnesota and Massachusetts as the third hospital association to make this policy change. 
  • On January 14, 2008, Pennsylvania announced that it would review records related to 27 “never events,” and make a determination if a preventable error occurred.  If so, they will not pay for the event.  Pennsylvania developed this policy in consultation with the Hospital and Health System Association of Pennsylvania.

Momentum around ending payment for “never events” follows work by national groups, states, hospitals, and others to address patient safety issues. In November 1999, the seminal Institute of Medicine report – To Err is Human – was released, highlighting the number of Americans who die and are harmed every year due to preventable errors.  The report emphasized that systems must be put in place to detect and prevent errors. 

In 2002, the National Quality Forum (NQF) completed a consensus process that produced 27 “Never Events.”  This list is used by many payers as they set their own “never event” lists.  The NQF criteria for developing this list were as follows:

  • Unambiguous—clearly identifiable and measurable, and thus feasible to include in a reporting system;
  • Usually preventable—recognizing that some events are not always avoidable, given the complexity of health care;
  • Serious—resulting in death or loss of a body part, disability, or more than transient loss of a body function; and
  • Any of the following:
    • Adverse and/or,
    • Indicative of a problem in a health care facility’s safety systems, and/or
    • Important for public credibility or public accountability.

In 2003, Minnesota became the first state to publicly require reporting of “never events.”  They used the 27 NQF measures and later updated them when NQF updated their list. The Minnesota Department of Health, the Minnesota Hospital Association, and the Minnesota Medical Association, founding members of the Minnesota Alliance for Patient Safety, worked with the legislature to establish a statewide reporting system for “never events.”  The Minnesota Department of Health publishes provider-specific data about “never events,” both the type of event and the outcome of the event, annually.  When a serious, reportable error occurs, the hospital or surgical center must investigate the incident and set up processes to prevent a similar error in the future.  The work of the Minnesota Alliance for Patient Safety and its members related to error detection, reporting and prevention has led to significant changes in hospital culture including a willingness to talk more openly about errors and to work together to develop policies to prevent them.  At least 11 states are currently using the NQF list for a state-based “never event” reporting system.