Key Health IT opportunity: Medicare Says It Won’t Cover Hospital Errors

Last week the NY Times and others reported that Medicare will stop covering expenses incurred by hospitals for what the agency considers as errors:

In a significant policy change, Bush administration officials say that Medicare will no longer pay the extra costs of treating preventable errors, injuries and infections that occur in hospitals, a move they say could save lives and millions of dollars.

Assuming the rules get enacted as expected, this is a major opportunity for health IT firms to jump in with solutions. For example, firms that do any of the following will be in demand very soon:

• Track medical errors and liabilities (this used to matter for legal cases, not it’ll be useful for reiumbursing)
• Analyze billing patterns and CPT charges that would likely be for “cleaning up a mistake” rather than an orginating a procedure. Billing software vendors can start to add functionality into their applications to do better reporting.
• Insurance company bill processing software will need better filters
• Tracking hospital acquired infections (HAI) and tying them to specific bills at the hospital. Companies are doing this today but not really tying their reports to specific patients or into the financial side.

According to the NY Times article, the Medicare rule changes could save significant money:

The new policy — one of several federal initiatives to improve care purchased by Medicare, at a cost of more than $400 billion a year — is sending ripples through the health industry.

With this much money at stake and the government now ready to put new rules into effect, health IT firms should start their engines…and fast. This is a brave new world and we’ll need new software to make all this work efficiently for both the government and providers.