Potential financial impact of restriction in “never event” and periprocedural hospital-acquired condition reimbursement at a tertiary neurosurgical center: a single-institution prospective study

Abstract

Object The Centers for Medicare and Medicaid Services (CMS) have moved to limit hospital augmentation of diagnosis-related group billing for “never events” (adverse events that are serious, largely preventable, and of concern to the public and health care providers for the purpose of public accountability) and certain hospital-acquired conditions (HACs). Similar restrictions may be applied to physician billing. The financial impact of these restrictions may fall on academic medical centers, which commonly have populations of complex patients with a higher risk of HACs. The authors sought to quantify the potential financial impact of restrictions in never events and periprocedural HAC billing on a tertiary neurosurgery facility. Methods Operative cases treated between January 2008 and June 2008 were reviewed after searching a prospectively maintained database of perioperative complications. The authors assessed cases in which there was a 6-month lag time to allow for completion of hospital and physician billing. They speculated that other payers would soon adopt the present CMS restrictions and that procedure-related HACs would be expanded to cover common neurosurgery procedures. To evaluate the impact on physician billing and to directly contrast physician and hospital billing impact, the authors focused on periprocedural HACs, as opposed to entire admission HACs. Billing records were compiled and a comparison was made between individual event data and simultaneous cumulative net revenue and net receipts. The authors assessed the impact of the present regulations, expansion of CMS restrictions to other payers, and expansion to rehospitalization and entire hospitalization case billing due to HACs and never events. Results A total of 1289 procedures were completed during the examined period. Twenty-five procedures (2%) involved patients in whom HACs developed; all were wound infections. Twenty-nine secondary procedures were required for this cohort. Length of stay was significantly higher in patients with HACs than in those without (11.6 ± 11.5 vs 5.9 ± 7.0 days, respectively). Fifteen patients required readmission due to HACs. Following present never event and HAC restrictions, hospital and physician billing was minimally affected (never event billing as percent total receipts was 0.007% for hospitals and 0% for physicians). Nonpayment for rehospitalization and reoperation for HACs by CMS and private payers yielded greater financial impact (CMS only, percentage of total receipts: 0.14% hospital, 0.2% physician; all payers: 1.56% hospital, 3.0% physician). Eliminating reimbursement for index procedures yielded profound reductions (CMS only as percentage of total receipts: 0.62% hospital, 0.8% physician; all payers: 5.73% hospital, 8.9% physician). Conclusions The authors found potentially significant reductions in physician and facility billing. The expansion of never event and HACs reimbursement nonpayment may have a substantial financial impact on tertiary care facilities. The elimination of never events and reduction in HACs in current medical practices are worthy goals. However, overzealous application of HACs restrictions may remove from tertiary centers the incentive to treat high-risk patients.