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Medicare will no longer cover hospital mapractice costs and could eliminate liens

I read an interesting newspaper article over the weekend by Robert Pear for the New York Times News Service.  Read the article here.  Another good version of the article can be read here.

The article says that the Bush administration "will no longer pay the extra costs of treating preventable errors, injuries and infections that occur in hospitals."  The new rules go into effect in October, 2008

Charges can not be passed down to patients. The administrative rule stems from a 2006 law but the implementation was delayed for fear that hospitals would pass along the charges to patients.

Under the rules, the charges CAN NOT be passed along to the patient.

Common Errors and Infections.  There is no indication exactly how the program will determine which fees are the results of preventable errors.  However, it does look like certain issues will be considered "per se" error, such as bed sores, bladder infections resulting from catheters, and preventable infections such as those stemming from staphylococcal infections.

The rule identifies eight conditions — including three serious types of preventable incidents sometimes called "never events" — that Medicare no longer will pay for. Those conditions are:

• Objects left in a patient during surgery

• Blood incompatibility

• Air embolism

• Falls

• Mediastinitis, which is an infection after heart surgery

• Urinary tract infections from using catheters

• Pressure ulcers, or bed sores

• Vascular infections from using catheters

• The Centers for Medicare and Medicaid Services said it also would work to add three more conditions to the list next year.

$20 Million Dollars Worth of Malpractice.  The Bush administration expects this will save $20 million per year, which to me means there is $20 million per year worth of treatments designed to "fix" malpractice.  You can count this as one of the first times this Administration has recognized the prevalence of medical negligence.

Implications for Attorneys.  The implementation of this policy only seems to have positive implications for victims of malpractice.  The most obvious would be that if Medicare does not pay for these services, then there can not be a lien from recovery.  I would suppose that if one gets a verdict or settlement on a malpractice claim that if Medicare has paid, the attorney for the patient could argue that Medicare should receive a refund from the medical provider rather than a lien against the Plaintiff's recovery.  Right now I don't know the effective date of the policy change.

I will be doing further research to see how the regulations will be implemented.  I'm assuming that Medicare's refusal to pay for "malpractice" will not be admissible to prove negligence in malpractice cases.

A further question is what happens when the victim of malpractice needs medical treatment for the remainder of their lives?  Will the hospital be paying for all the bills?  I'm thinking this will be a difficult issue in some cases.

Check back for updates on this post.

Chris Nichols 1.800.906.5984


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Hardison Wood

Chris: correct me if I'm wrong here, but if Medicare doesn't pay, doesn't that mean the doctor gets stiffed? And if the doctor gets stiffed, won't the doctor then be forced to assert a provider's lien on any settlement? And won't that lien be about 10-20% greater than if medicare had asserted a lien?

Just thinking out loud.

Chris Nichols


Actually, I think that the statute says that if Medicare "decides" the bill is a result of a preventable error and will not pay, then the provider is prohibited from passing the bill on to the customer.

I think they do this by way of contract, in the same way that a Medicare provider must "accept" the scheduled payment for certain services and cannot balance bill. Thus, if the Hospital tried to bill for these services, they would get in trouble with Medicare and possibly lose all funding.

Oddly enough and on a side note, sometimes hospitals actually get paid MORE than their charges because the national Medicare payment "schedule" has a higher reimbusrement rate than the hosital charges. And guess what? If there is a Medicare lien, the client/patient has to pay the higher amount.

Chris Nichols

Hardison Wood

Ok, I get it. Thanks for clearing that up. I didn't realize the medicare money had strings attached to it beyond the treatment at issue. Very interesting. Thanks for posting on this.

Thomas Sharon, R.N., M.P.H

Here is some information on the risks of bedsores that might be useful. More at

In making the assessment, your admitting nurse must determine whether anyone or more of the following risk factors exist:

age over 60
spinal cord paralysis
nervous system disease
poor circulation
confined to bed
altered level of consciousness
bladder incontinence
bowel incontinence
reduced mobility (traction or body cast)

The usual procedure is to assign a value of 1 to each risk factor and add up those that exist. The totals then translate to one of the three levels of risk as follows: 0 to 6 indicates low risk, 7 to 13 indicates moderate risk, 14 to 18 indicates high risk. The parts of the body that are susceptible to pressure ulcers are the heels, ankles, knees, buttocks, tailbone, lower spine, shoulder blades, ears, and back of the head.

Robin Smith

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further research to see how the regulations will be implemented. I'm assuming that Medicare's refusal to pay for "malpractice" will not be admissible to prove negligence in malpractice cases.

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Thank you for sharing your thoughts. I truly appreciate your efforts and I will be waiting for your further post thank you once again.

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