Patient Care

Should Hospitalists Who Fail to Provide a Standard of Care Be Paid for Subsequent Care?


A 72-year-old male with a history of CHF is admitted for elective total hip arthroplasty. On postoperative day one, he develops dyspnea and hypoxia, and is diagnosed with acute pulmonary edema by the hospitalist co-managing his care. Furosemide is prescribed, and he improves, and by day four is ready for discharge following another dose of diuretics. Overnight, he develops acute onset of shortness of breath and is diagnosed with a pulmonary embolism (PE). Under new regulations, the hospital will not be reimbursed for the extra cost associated with subsequent patient care. Should the hospitalist be paid for the subsequent care?


Nonpayment won’t improve quality or significantly decrease costs

Dr. Grace is a hospitalist and area medical officer for the Schumacher Group Hospital Medicine Division in Lafayette, La. He is a member of Team Hospitalist.

The real essence of the question raised in the clinical case above is “Should doctors profit from errors?” The answer might be “It’s better than the alternative.” Allow me to explain. There essentially are two reasons to withhold payment in this scenario: one, as a mechanism for promoting quality; two, as a mechanism for decreasing costs to the payor.

The quality argument assumes the physician will deliver higher-quality care (i.e., prescribe chemical thromboprophylaxis) if a threat of nonpayment exists. This concept is simply hogwash. If expensive medical malpractice threats fail as quality-improvement (QI) mechanisms, it is absurd to think withholding a few subsequent-care charges will generate better results.

The key issue is the type of error involved. As defined by Lucien Leape, MD, in his celebrated 1994 article on medical errors, “mistakes” reflect failures during attentional behaviors, or incorrect choices.1 “Slips” reflect lapses in concentration. “Slips occur in the face of competing sensory or emotional distractions, fatigue, and stress,” and “reducing the risk of slips requires attention to the designs of protocols, devices, and work environments.”

Misjudging the type of error—in this case, a slip (find me a hospitalist who doesn’t know total hip arthroplasty requires thrombophrophylaxis)—and misapplying corrective actions will have little to no effect on outcomes. Thus, pay-withholding schemes can have a negative net effect by diverting resources from QI projects that truly improve patient outcomes.

Withholding payment in this case generates approximately $160 in direct savings to the payor (assuming Medicare payments for one 99233 and two 99232 subsequent care visits), yet the operational costs are not negligible and must be factored into the equation. The payor needs to first determine who is truly at fault: the hospitalist or the orthopedic surgeon. Answering that question requires the payor to review the co-management agreement, perhaps aided by an attorney. That’s a costly endeavor.

For the sake of argument, let’s assume in this case the hospitalist is at fault. The next step is determining if the hospitalist who failed to prescribe prophylaxis prior to the PE is the same hospitalist caring for the patient after the PE. It is inappropriate to withhold payment to hospitalist A if hospitalist B made the error. Again, significant manpower will be required to determine fault, as this is not information one finds on a UB-04 claim form submitted to Medicare.

Further eroding the $160 savings is the cost of determining whether a contraindication exists: Bleeding ulcer? Subdural hematoma? Heparinoid allergy? Let us not forget the additional costs in copying, shipping, warehousing, and eventual shredding of the records. One can readily see that the operational costs can quickly negate the $160 anticipated savings. In fact, it’s likely a negative return on investment.

Clearly, withholding payment in this scenario is an ineffective mechanism for improving quality or decreasing cost. I am not generally a proponent of rewarding failure, and perhaps as we usher in a new era of healthcare reform, the system will be redesigned in such a way that better aligns quality and cost-control measures. However, under the current system, payment denial as outlined above likely does more harm than good.


Withhold payment when medical errors are easily identifiable

Dr. Axon is a hospitalist and assistant professor in the departments of Internal Medicine and Pediatrics at the Medical University of South Carolina in Charleston. He is a member of Team Hospitalist.

When I first learned of the proposal to withhold Medicare payment for hospital-acquired conditions (HACs), I had mixed emotions. On the one hand, I firmly believe that physicians should be accountable for their work; on the other hand, this policy seems to conflict sharply with the “no blame” mantra that has been prevalent in patient safety for more than a decade.2 More recently, though, many have argued for balancing the pursuit of system fixes for quality and patient-safety issues with the development of a culture of accountability.3

In theory, the HACs should meet the following criteria: They should be high-cost conditions, high-volume conditions, or both; they should be identifiable through ICD-9-CM coding as complicating conditions (CCs) or major complicating conditions (MCCs) that result in a higher-paying MS-DRG; and they should be reasonably preventable through the application of evidence-based guidelines. Some HACs are jaw-dropping lapses in care (e.g., leaving foreign bodies in during surgery). Other HACs seem to me to be much less preventable, especially fall injuries and catheter-associated urinary tract infections (UTIs). Several experts have written eloquently regarding the limitations of these new measures, particularly emphasizing the potential for increased administrative burden on hospitals and the potential for unintended consequences.4,5

However, in the case described above involving a hospitalist, I have no reservations in limiting payment to the provider. To me, failing to prescribe VTE prophylaxis in an elderly, immobilized, post-op hip replacement patient with a CHF exacerbation is the hospitalist’s equivalent to a surgeon leaving behind a sponge in an appendectomy. It also meets the elements outlined in the HAC withholding program:

  • It is high-cost. The 2007 MS-DRG payment for elective hip arthroplasty was $9,863, but adding an MCC increased that cost by one-third.6
  • It is readily identifiable, though one concern might be that hospitals would perform unnecessary pre-operative testing to identify asymptomatic DVT, incurring increased testing and treatment costs and increasing the incidence of bleeding complications.
  • It is very preventable. Without thromboprophylaxis, 40% to 60% of hip arthroplasty patients will develop an asymptomatic DVT, and 1 in 300 will die from a PE. However, such fatal events are exceedingly rare with appropriate prevention.7

Ultimately, I think a policy of nonpayment for this case keeps with the culture of accountability we need to foster in healthcare. The financial implications of nonpayment will drive hospital innovation and force the hospital to police provider behavior in more effective ways. This is likely to be a painful process, similar to the tribulations experienced with implementing pay-for-performance programs. The Centers for Medicare and Medicaid Services (CMS) needs to be flexible in adding—and removing—new HACs based on good evidence.

Regardless, the goal of achieving a safer, more effective healthcare system remains.


  1. Leape LL. Error in medicine. JAMA. 1994;272(23):1851-1857.
  2. Institute of Medicine. To Err Is Human: Building a Safer Healthcare System. Washington, D.C.: National Academies Press; 2000.
  3. Wachter RM, Pronovost PJ. Balancing “no blame” with accountability in patient safety. N Engl J Med. 2009;361:1401-1406.
  4. Saint S, Meddings JA, Calfee D, Kowalski CP, Krein SL. Catheter-associated urinary tract infection and the Medicare rule changes. Ann Intern Med. 2009;150(12):877-884.
  5. Inouye SK, Brown CJ, Tinetti ME. Medicare nonpayment, hospital falls, and unintended consequences. N Engl J Med. 2009;360(23):2390-2393.
  6. Wachter RM, Foster NE, Dudley RA. Medicare’s decision to withhold payment for hospital errors: the devil is in the det. Jt Comm J Qual Patient Saf. 2008;34(2):116-123.
  7. Geerts WH, Bergqvist D, Pineo GF, et al. Prevention of venous thromboembolism: American College of Chest Physicians Evidence-Based Clinical Practice Guidelines (8th Edition). Chest. 2008;133(6 Suppl):381S-453S.

The opinions expressed herein are those of the authors and do not represent those of SHM or The Hospitalist.

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