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The term “never event” is used to describe obvious and easily preventable medical errors that cause serious and costly injury and death to their victims. They received their name because these mistakes should never happen. Never events include surgery on the wrong body part, performing a surgical procedure on the wrong patient, mismatched blood transfusions, and foreign objects left in a patient after surgery.

According to a 1999 Institute of Medicine estimate, 98,000 death are caused every year by medical errors. These medical errors, according to another Institute of Medicine study, cost over $9.3 billion. This begs the question: Who should foot the bill for these obvious and easily preventable errors?

Some, but not all, hospitals have voluntarily adopted the policy that patients should not be billed for costs associated with never events. The Centers for Medicare & Medicaid Services has concluded that “paying for ‘never events’ is not consistent with the goals” of Medicare payment reforms designed to improve quality of care by, among other things, “tying payment to quality.” http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=1863 MSNBC reports that starting October 1, Medicare will no longer pay for the extra costs associated with certain never events. http://www.msnbc.msn.com/id/26081421/

The states and private insurers are also refusing to cover the costs of these errors. Some states already have policies in effect to deny payment for costs associated with certain medical errors. Medicare officials are encouraging states that do not have such policies to implement them. Major health insurers including Cigna, Aetna, and Blue Cross BLude Shield also refuse to pay the price of serious and obvious medical error.

Some states have responded by enacting legislation requiring hospitals to report these incidents.

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