Summary
CMS (and several large insurers) refusing to pay for "Never Events" will further challenge cash strapped hospitals, and poses increased pressure to increase prices as hospitals attempt to cost-shift to the commercial carriers. Not paying for alleged hospital mistakes will garner stronger administrative action against staff and doctors who get more adverse high cost patients. The world of doctors will get more autocratic. Hospitals cannot change Medicare and Medicaid fee schedules, but they can and do change commercial fee schedules. Insurers need to stay on top of unexpected cost increases predicated upon unexpected and desperate hospital trying to keep the status quo on the backs of the commercially insured members. Staying tuned to what the government subsidizes is the name of the game for successful insurers and providers of care.
Analysis
Medicare's rule not to pay for "never events" will directly impact commercial contracting rates with commercial carriers. Hospital's attempt to cost-shift to the commercially insured lives will be a struggle. How will the future cash flow reductions affect hospitals ability to keep business as usual, especially given recently televised scandals of old people dying in ER waiting rooms. The rate of commercially insured pre Medicare people leaving and joining the Medicare entitlements will accelerate cost shifting needs, but the market is already abandoning benefits because of premium cost.
Political forces are strong for change in healthcare, and anyone in the business of insuring or delivering care should tighten their belt and stay very tuned in to what is happening in their markets to address the working insured, underinsured and uninsured.
