January 25, 2008

1. Private Insurers Move to Cut Reimbursements for Preventable Errors

2. OIG Recommends NIH Oversight of COI at Grantee Institutions

1. Private Insurers Move to Cut Reimbursements for Preventable Errors

Following Medicare’s example, several private insurers and the Pennsylvania Medicaid program will no longer reimburse hospitals for costs associated with treating preventable conditions a patient acquires while at the hospital. Medicare’s movement to stop paying for preventable conditions could quickly become the standard for dealing with patient safety issues and escalating patient care costs.

In October 2007, Medicare stopped paying hospitals for eight preventable conditions associated with hospital stays, including bed sores, blood incompatibility, and hospital falls (Connection, August 22, 2007). The Centers for Medicare & Medicaid Services (CMS) plans to expand its rule to include treatments for hospital-acquired infections, blood clots in legs and lungs, and pneumonia contracted from a ventilator.

Several private insurance companies are following Medicare’s lead. In all contract renewals, Aetna is instituting a provision that ends hospital reimbursements for 27 preventable conditions classified by the National Quality Forum (NQF) as “never events.” In Virginia, WellPoint is testing a policy that would keep it from making hospital payments for four “never events” with the intention of expanding the policy to other areas, including New England. Other health insurance groups considering a policy similar to the CMS rule are Blue Cross and Blue Shield, UnitedHealth Group, and Cigna.

On the state level, Pennsylvania’s Department of Public Welfare launched a program January 14 to identify and stop Medicaid payments to hospitals for any of NQF’s “never events.” The policy also indicates that hospitals can not bill patients for these errors. In other states, including Massachusetts and Minnesota, hospital groups and government agencies are also moving forward with plans to end payments for “never events.”

Proponents of the CMS rule, including National Committee for Quality Assurance President Margaret E. O’Kane, have called the movement to stop paying hospitals for “never events” a “no brainer.” According to Ms. O’Kane, “ultimately, it is an alignment of the patients, the payers, the providers, and society to get health care working right.”

2. OIG Recommends NIH Oversight of COI at Grantee Institutions

The Department of Health and Human Services (HHS) Office of the Inspector General (OIG) issued a report Thursday, January 17, 2008, regarding the National Institutes of Health’s (NIH’s) management of financial conflicts of interest. The report identifies flaws within NIH’s current tracking system—namely the lack of a centralized system and poor enforcement mechanisms—and recommends changes to better ensure that conflicts of interest are effectively “managed, reduced, or eliminated.” OIG, whose mission is to “protect the integrity of HHS programs… [and report] management problems and recommendations to correct them,” advocates for increased NIH oversight of conflict of interest reporting at institutions receiving funding via the extramural research program. OIG argues that NIH should improve processes, such as tracking whether institutional policies are in place, receiving detailed reports of conflict of interest cases, and maintaining such reports in a centralized database.

According to the OIG report, institutions that receive funds from NIH must have a written policy for identifying and addressing financial conflicts of interest. Financial conflicts of interest exist if an institution “reasonably determines that a significant financial interest could directly and significantly affect the design, conduct, or reporting of the Public Health Service-funded research.” At NIH, 24 (of 27) granting institutes are responsible for ensuring that awardee institutions have conflict of interest policies and report any conflict of interest cases to NIH.

In its finding, OIG reports that NIH does not maintain an organized database of reported cases of conflicts of interest. Institutes are encouraged but not required to provide the Office of Extramural Research (OER) with conflict of interest reports. Many institutes were unable to provide the OIG with information on the number of cases reported, and the study uncovered discrepancies between the cases tracked by OER and the institutes. Meanwhile, of the 438 reports provided from fiscal years 2004 to 2006, only 30 included details on the nature of the conflict and 15 highlighted an attempt by the institution to resolve the issue. OIG found that in most cases institutes maintain a good-faith policy when it comes to ensuring institutions manage their conflict of interest cases. An internal memorandum instructed NIH officials that “if you have any concern that this [conflict] could harm the project, we can ask for additional information, however, this would only be done in rare/exceptional situations.”

OIG recommends that NIH resolve these problems by increasing oversight of institutions’ compliance with conflict of interest regulations. This may include having OER perform site visits and requiring institutes to review the policies in place at their grantee institutions. In addition, OIG recommends that OER maintain a centralized database of conflict of interest reports provided by the institutes and that the individual institutes “require institutions to provide details regarding the nature of financial conflicts of interest and how they are managed, reduced, or eliminated.”

While NIH agrees with the first two recommendations, the agency opposes the third because “responsibilities for identifying and managing conflicts of interest must remain with grantee institutions.” The Association of American Medical Colleges (AAMC) has also opposed this recommendation because it would “require the agency to become involved in research institutions’ own management of specific conflict of interest cases in a manner that is unfeasible and beyond the NIH's existing statutory authority.” AAMC is developing guidelines and tools to address “conflict identification, evaluation, management, and disclosure” with the Association of American Universities and hopes to distribute a report on the matter in mid-Spring. According to AAMC, the association “supports federal regulations requiring that both the NIH and the grantee institution be vigilant in fulfilling their obligations to identify, disclose, and manage researchers' financial conflicts of interest.” Meanwhile, other organizations have also taken a lead in developing tools to support academic health centers in managing conflicts of interest. The Federation of Societies for Experimental Biology has created the “COI Toolkit” to provide institutions and investigators with the appropriate “tools and resources for the conduct and management of financial relationships between academia and industry in biomedical research.” The “COI Toolkit” can be accessed at http://opa.faseb.org/pages/advocacy/coi/toolkit.htm.

The Alliance for Academic Internal Medicine—the nation’s largest academically focused specialty organization—consists of the Association of Professors of Medicine, the Association of Program Directors in Internal Medicine, the Association of Subspecialty Professors, the Clerkship Directors in Internal Medicine, and the Administrators of Internal Medicine.

Please contact AAIM Vice President for Policy Charles P. Clayton (cclayton@im.org), AAIM Policy Associate Nicole V. Baptista (nbaptista@im.org), or AAIM Policy Assistant Allison L. Haupt (ahaupt@im.org) at (202) 861-9351 with questions or comments about this week’s Merlin.