Medicaid to Cease Reimbursement to Hospitals for 'Never Events' and Avoidable Errors

Emphasizing Patient Quality and Safety

ALBANY, N.Y. (June 5, 2008) – In a continuing effort to improve health care quality and ensure patient safety, state Health Commissioner Richard F. Daines, M.D., announced today that beginning in October, the New York State Medicaid program will deny reimbursement on 14 "never events" – avoidable hospital complications and medical errors that are identifiable, preventable, and serious in their consequences to patients.

As defined by several national quality measurement organizations, "never events" include surgical errors such as procedures performed on the wrong body part or the wrong patient. In addition to wrong-site surgery and serious medication errors, "never events" also include complications such as unintentionally leaving a foreign object in a patient or administering incompatible blood. A 1999 study by The Institute of Medicine estimated that as many as 98,000 deaths a year may be attributable to medical errors.

Commissioner Daines said, "Patient safety is one of the nation's most pressing health challenges. Many insurers and hospital associations throughout the United States have reported 'never events' voluntarily and adopting policies to heighten awareness about medical errors and to improve efforts to minimize the likelihood of such events. In addition, the federal government will be initiating a similar program for Medicare.

"Reforming Medicaid's hospital payment system is a key initiative in New York Medicaid, he added. "Reform isn't solely about balance sheets – quality of care and patient safety are paramount. This policy change will improve the value of Medicaid's payment for hospital patients who receive acute care and provide further incentives for hospitals and clinicians to improve the quality and safety of inpatient care."

Hospitals receiving payment under New York Medicaid will be required to provide information on each admission that will designate which complications were present on admission, and which ones occurred during or as a result of hospital care. By working with the hospital and clinical community, this information will help the Medicaid program determine when increased payment for complications will be denied.

The 14 avoidable hospital conditions that New York State Medicaid has identified as non-reimbursable are:

  • Surgery performed on the wrong body part;
  • Surgery performed on the wrong patient;
  • Wrong surgical procedure on a patient;
  • Foreign object inadvertently left in patient after surgery;
  • Medication error;
  • Air embolism;
  • Blood incompatibility;
  • Patient disability from electric shock;
  • Patient disability from use of contaminated drugs;
  • Patient disability from wrong function of a device;
  • Incidents whereby a line designated for oxygen intended for patient is wrong item or contaminated;
  • Patient disability from burns;
  • Patient disability from use of restraints or bedrails; and
  • Patient disability from failure to identify and treat hyperbilirubinemia (bilirubin in blood) in newborns.

The Department of Health will continually review this list, which will be modified and expanded over time.