In August of 2007, the Centers for Medicare and Medicaid Services (CMS) announced that as of October 1, 2008 Medicare will no longer reimburse hospitals for the treatment of certain “conditions that could reasonably have been prevented,” and that the facilities will not be allowed to bill the patient (or beneficiary) for any charges associated with the hospital-acquired complication.

Since 2007, CMS has made additions to list of conditions they will no longer pay for in an effort to ensure that CMS is an "active purchaser, not passive payer, of health care,” according to a CMS spokesperson. CMS officials believe that the list of do-not-pay services and “never events” would save lives and $50 million annually during each of the next three years.

The new CMS rules also have prompted private health insurers to implement similar policies. Recently, Blue Cross Blue Shield (BCBS) of Illinois announced plans to end reimbursement to hospitals for treatment that results from serious medical errors. While BCBS of Illinois has not finalized a list of medical errors to include under the policy, their announcement proves to be part of an industry-wide shift.

CMS, continuing their leadership in the overall U.S. health care system, has sent a letter to state officials asking them to consider similar changes to rules in their Medicaid reimbursement policies. According to CMS, almost 20 states have begun to consider such changes.

These changes to reimbursement policies are focused on modifying the behavior of providers and facilities to more closely abide by clinical guidelines and best practices. NSBA applauds the leadership displayed by CMS in enhancing their pay-for-performance policies.