Health Insurance Quotes

Find Affordable Health Insurance Now

Yes No
Yes No

Health insurance companies tear up bills for major medical mistakes

never eventsDoctors take the oath of "primum non nocere" in medical school, a Latin phrase that means "first, do no harm."

But even the most skilled and well-intentioned medical professionals can make errors — medical mistakes that should never happen. Some mistakes are so serious and outrageous that they have become known as "never events" in medical circles.

What could possibly go wrong when you visit the hospital? Doctors have operated on incorrect body parts, amputated wrong limbs and left surgical devices and sponges inside patients. Some patients receive transfusions of the wrong blood type or are given an incorrect dose of medications.

Women have been artificially inseminated with the wrong donor sperm. Infants have been sent home with the wrong parents. That’s only for starters. (See end of article for a complete list of official “never events.”) According a study of more than 27,370 adverse events self-reported by Colorado physicians and published in the October issue of Archives of Surgery, 25 surgeries were conducted on the wrong patient and 107 were on the wrong part/area of the patient’s body between 2002 and 2008.

Stop sending us your bills!

The problem with sponges

The surgical sponge is one of the most common objects left in patients after surgery. A 2003 study by The New England Journal of Medicine found that roughly 4,000 sponges are accidentally left inside patients annually. In at least 88 percent of these cases, the medical staff had falsely recorded a correct sponge count after surgery. The study, focusing on 54 patients who filed claims for a “never event,” found that 69 percent of the foreign objects left behind after surgery were sponges and 31 percent were medical instruments. Thirty-seven of those patients required corrective surgery and one died.

The situation has become so dire that medical-equipment companies invented sponges with RFID (radio frequency identification) tags in them to closely track their whereabouts.

In years past, health insurance companies and Medicare have been footing the bill for these complications for years. However, that’s changed.

In October 2008, the Centers for Medicare and Medicaid Services (CMS) ended reimbursement to hospitals for the costs of fixing certain medical mistakes. Some private insurers have jumped on the bandwagon. In addition, some states have adopted laws that ban hospitals from charging for certain “never events.”

“Several states have laws in place that mirror the federal Medicare payment policies on hospital-acquired conditions,” says Lisa McGiffert, spokesperson for the Consumers Union. “Health reform law requires all state Medicaid programs to adopt the hospital-acquired conditions payment policies, which do not allow the hospitals to bill patients when the public insurance program refuses to pay.”

Health insurance companies that provide medical malpractice coverage to doctors have been grumbling over “never events” for quite some time. Medical errors accounted for 12.2 percent of legal liability costs at health care facilities in 2007, according to research by insurance firm Aon Corp. The company surveyed roughly 78,000 patient claims from about 1,200 hospitals and found that medical errors cost around $9.3 billion from 1998 to 2007.

Kelly Drinkwine, a spokesperson for Aon Corp., says that one out of every six medical malpractice claims is the result of an infection contracted at a hospital, an injury suffered at a hospital, doctors forgetting surgical objects inside patients or patients developing bedsores. "This is unacceptable," she says.

Exactly when and how you could be billed for a “never event” is difficult to pin down.

For example, if your doctor leaves a surgical instrument inside your body, you could be billed for the initial surgery but not for the re-operation to remove the instrument. If you develop a bedsore while receiving hospital care for a car accident, you shouldn’t be billed for the cost of treating the bedsore – in some states. But the hospital will likely charge you for the portion of the bill that dealt with treating your initial injuries from the car accident. If you’ve had the wrong limb amputated, or some other irreversible mistake, you can always file a medical malpractice lawsuit.

But defining a “never event” or determining how a hospital handles your bill is difficult because states have different laws and guidelines.  

For example, Connecticut enacted a law in 2010 that prohibits hospitals and outpatient surgical facilities from billing health insurers or patients for certain preventable medical errors. Specifically, it does not allow billing for medical care that results from objects accidentally left in a body after surgery, air embolisms, incompatible blood transfusions, hospital-acquired infections and falls. 

Hospitals in Maine won’t charge patients or their insurers for 28 errors defined by the National Quality Forum (NQF) list. In other states, hospitals – encouraged by medical associations – have agreed not to charge patients for certain preventable errors. But their definitions vary.

Health insurance companies caught in the middle

Providers of medical insurance are caught in the middle of “never event” messes.

Just like Medicare, they’re tired of paying for “never events” and they want hospitals and doctors to be more accountable for their mistakes.

The debate over who should pay for medical mistakes shot to the forefront in 2005 when Minnesota’s HealthPartners became the first insurer to declare it would not pay hospitals for anything on NQF's list of “never events.”

After CMS announced it would be tearing up bills for “never events” as of Oct. 1, 2008, so did CIGNA. Although CIGNA says that “never events” made up only a small number of claims, it was the principle that led the insurer to follow CMS’s lead.

"We looked at the various adverse events that Medicare had identified in its guidelines and divided them into "never events" and avoidable hospital conditions. Never events are those surgical mistakes that should never happen, such as surgery performed on the wrong side of the body, wrong site, wrong body part (or) the wrong patient. An avoidable hospital condition is one that a patient does not have at the time of admission to the hospital; it develops during the patient’s hospital stay, and could have been avoided if the hospital had followed evidence-based guidelines and best practices for patient care," says Mark Slitt, spokesperson for CIGNA Healthcare.

In January 2008, Aetna announced that it would stop paying for the 28 “never events” named by the NQF. WellPoint has initiated a pilot program in Virginia that will not pay for four types of medical errors, including surgery performed on the wrong body part, surgery performed on the wrong patient and the wrong surgery performed on a patient. When it comes to corrective surgeries that involve the removal of an object left inside the patient, or giving a patient the wrong blood type, WellPoint says that the hospital must now foot the bill. Along with other major insurers, UnitedHealthcare and all 39 Blue Cross and Blue Shield health insurance coverage plans are considering putting Never Event bills in the "do not pay" file.

The consequences

Before you think that the hospital or surgeon is off the hook following an "adverse event," think again. Several things can happen following an egregious medical error.

A hospital or surgeon can be sued for medical malpractice, which would result in a substantial increase in insurance premiums. Doctors can lose their licenses in that state. A hospital can lose its accreditation from the Joint Commission, the accrediting agency that certifies and inspects health care organizations in the United States.

CMS can decertify a hospital. Decertification means the hospital will no longer receive reimbursement for Medicare or Medicaid patients, creating sizeable lost revenues and possibly putting the hospital out of business. In extreme circumstances, a state health department can shut down a hospital.

Still, some hospitals continue to charge for “never events.”

The full list: 28 Never Events as defined by the National Quality Forum

Surgical Events

  • Surgery performed on the wrong body part
  • Surgery performed on the wrong patient
  • Wrong surgical procedure performed on a patient
  • Unintended retention of a foreign object in a patient after surgery or other procedure
  • Intraoperative (during surgery) or immediately postoperative (after surgery) causing the death of a patient with a bill of good health

Product or Device Events

  • Patient death or serious disability associated with the use of contaminated drugs, devices or biologics provided by the healthcare facility
  • Patient death or serious disability associated with the use or function of a device in patient care in which the device is used or functions other than as intended
  • Patient death or serious disability associated with intravascular air embolism that occurs while being cared for in a health care facility

Patient Protection Events

  • Infant discharged to the wrong person
  • Patient death or serious disability associated with patient leaving the facility without permission
  • Patient suicide, or attempted suicide, resulting in serious disability while being cared for in a health care facility

Care Management Events

  • Patient death or serious disability associated with a medication error (e.g. errors involving the wrong drug, wrong dose, wrong patient, wrong time, wrong rate, wrong preparation or wrong route of administration)
  • Patient death or serious disability associated with a hemolytic reaction (abnormal breakdown of red blood cells) due to the administration of ABO/HLA — incompatible blood or blood products
  • Maternal death or serious disability associated with labor or delivery in a low-risk pregnancy while being cared for in a health care facility
  • Patient death or serious disability associated with hypoglycemia, the onset of which occurs while the patient is being cared for in a health care facility
  • Death or serious disability associated with failure to identify and treat hyperbilirubinemia (condition where there is a high amount of bilirubin in the blood) in newborns
  • Serious bedsores acquired after admission to a health care facility
  • Patient death or serious disability due to spinal manipulative therapy
  • Artificial insemination with the wrong donor sperm or wrong egg

Environmental Events

  • Patient death or serious disability associated with an electric shock while being cared for in a health care facility
  • Any incident in which a line designated for oxygen or other gas to be delivered to a patient contains the wrong gas or is contaminated by toxic substances
  • Patient death or serious disability associated with a burn incurred from any source while being cared for in a health care facility
  • Patient death or serious disability associated with a fall while being cared for in a health care facility
  • Patient death or serious disability associated with the use of restraints or bedrails while being cared for in a health care facility

Criminal Events

  • Any instance of care ordered by or provided by someone impersonating a physician, nurse, pharmacist or other licensed health care provider
  • Abduction of a patient of any age
  • Sexual assault on a patient within or on the grounds of a health care facility
  • Death or significant injury of a patient or staff member resulting from a physical assault (i.e., battery) that occurs within or on the grounds of a health care facility


Ready to get a quote?

Get quick and easy health insurance quotes

Yes No