In its 1999 report, To Err is Human: Building a Safer Health System, the Institute of Medicine (IOM) concluded that medical errors, particularly hospital-acquired conditions (HACs), may be responsible for as many as 98,000 deaths annually, at costs of up to $29 billion. In 2000, the Centers for Disease Control and Prevention (CDC), estimated that hospital-acquired infections added nearly $5 billion to hospital costs. At the same time, a 2007 survey by the Leapfrog Group of more than 1,200 hospitals found that 87 percent did not follow recommendations to prevent many of the most common hospital-acquired conditions.

"When these conditions occur during a hospital stay, the patient and his or her family suffer needlessly. To make matters worse, these conditions are likely to result in higher medical bills for the family to pay for additional services for physician care, prescription drugs, and other items and services that would not have been necessary if proper care had been provided," said Weems. "Medicare can and should take the lead in encouraging hospitals to improve the safety and quality of care and make better practices a routine part of the care they provide not just to people with Medicare, but to every patient they treat."


The rules proposed by CMS expand two key initiatives that begin to link payments for health care services to quality of care - the Hospital-Acquired Conditions and the Hospital Quality Measure Reporting initiatives. Under the HAC initiative, beginning October 1, 2008, Medicare will no longer pay hospitals at a higher rate for the increased costs of care that result when a patient is harmed by one of several conditions they didn't have when they were first admitted to the hospital and that have been determined to be reasonably preventable by following generally accepted guidelines.

The HAC provisions in Medicare regulations required hospitals to begin reporting on their Medicare claims on October 1, 2007, whether certain specified diagnoses were present when the patient was admitted. The first eight conditions, which were selected last year because they greatly complicate the treatment of the illness or injury that caused the hospitalization, resulting in higher payments to the hospital for the patient's care by both Medicare and the patient, were:
* Object inadvertently left in after surgery
* Air embolism
* Blood incompatibility
* Catheter associated urinary tract infection
* Pressure ulcer (decubitus ulcer)
* Vascular catheter associated infection

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