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Texas Hospitals Support New Billing Policy

AUSTIN (July 17, 2008) – The Texas Hospital Association is proactively promoting accountability for patient safety by adopting new principles that address billing policies for serious medical mistakes, such as a wrong-site surgery or a patient death resulting from giving a transfusion of the wrong blood type.
Lacking a national framework for how hospitals should be reimbursed when a serious adverse event occurs, the Texas Hospital Association Board of Trustees approved a policy at a recent meeting which incorporates five principles to guide hospitals in developing their own internal policies regarding billing for care related to a serious adverse event.
     Texas joins at least a dozen other state hospital associations and the American Hospital Association in adopting guidelines for voluntary discounting or waiving of payment for care associated with serious, adverse events. “Clearly, hospitals must be accountable for errors that are within their control, and that includes supporting nonpayment policies when warranted,” said Dan Stultz, M.D., FACP, FACHE, president/CEO of the Texas Hospital Association.
     Since the THA Board’s adoption of the policy in mid-May, THA has been encouraging individual hospitals to adopt policies based on the principles. Stultz and his staff have held conference calls with representatives of THA member hospitals to explain the principles and to share examples of situations that would qualify for a reduction in charges.
     In addition, THA has shared its principles and rationale with health plans, which are beginning to address reimbursement policies for these rare events in their contract negotiations. “When a serious mistake occurs, the patient is likely to request a different doctor or hospital for follow-up care to resolve the problem. It’s important that payers understand that the subsequent doctor and hospital providing ‘rescue’ care should be paid,” Stultz said.
     Blue Cross and Blue Shield of Texas already has notified THA that it will base its reimbursement guidelines on THA’s principles.
     Applicable to the care made necessary by the serious adverse event, THA’s principles state that the error or event must be preventable and within the control of the hospital. “For example, a hospital should not be accountable for errors that may have occurred in the manufacture of drugs or devices, well before the materials reached the hospital’s door,” Stultz explained.
     Another principle states that the error or event must be the result of a mistake made in the hospital, such as a hospital procedure not being followed. The error or event must result in significant harm, and be something that can be clearly and precisely defined in advance. “For example, an alert, stable patient may fall and suffer a serious injury. The hospital had no reason to use restraints on the patient, and should not be penalized for an accident which was not expected,” Stultz said.
      THA identified nine specific examples which may qualify for nonpayment under its new principles:

  1. Surgery performed on a wrong body part.
  2. Surgery performed on the wrong patient.
  3. The wrong surgical procedure performed on a patient.
  4. Patient death or serious disability associated with intravascular air embolism that occurs while being cared for in a facility.
  5. An infant discharged to the wrong person. 
  6. Patient death or serious disability associated with a hemolytic reaction due to the administration of ABO-incompatible blood or blood products.
  7. Death or serious disability, including kernicterus, associated with failure to identify and treat hyperbilirubinemia in neonates during the first 28 days of life.
  8. Artificial insemination with the wrong donor sperm or donor egg. 
  9. Patient death or serious disability associated with a burn incurred from any source while being cared for in a facility.

     “While billing policies are important, the ultimate goal is to improve patient safety and prevent serious adverse events from happening in our hospitals,” noted Stultz. “When one of these events occurs, the hospital quickly identifies its cause, takes immediate action to prevent it from happening again, and attempts to address any harm caused to the patient,” he added.
     THA also is working with the American Hospital Association to develop national standards to minimize administrative costs and create uniform expectations for all hospitals and payers. “Hospitals want to deliver the right care to the right patient at the right time, every time," said Stultz. "That’s what the public rightfully expects, and we need to be accountable if we fall short of that goal.”

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About the Texas Hospital Association
Founded in 1930, the Texas Hospital Association is the leadership organization and principal advocate for the state’s hospitals and health care systems. Based in Austin, THA enhances its members’ abilities to improve accessibility, quality and cost-effectiveness of health care for all Texans. One of the largest hospital associations in the country, THA represents more than 85 percent of the state’s hospitals and health care systems, which employ some 340,000 health care professionals statewide. To learn more, visit www.texashospitalsonline.org.