“Never-Events” Payment Trends

Posted on January 16, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

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Aetna and WellPoint Refuse to Pay for Medical Errors

By Staff WritersMedical Chart

According to The Wall Street Journal, some large private health insurers are following Medicare’s lead by refusing reimbursement for erroneous medical care. Aetna and WellPoint now have contract provisions stating their refusal to pay – or allow patient-balance-billing – for care related to the 28 “Never-Events” compiled by the National Quality Forum [NQF].  

These NEs include, death of a low-risk pregnancy mother, instruments left in-situ after surgery, and using contaminated instruments or medical devices. Of course, the very definition of some other NEs is hotly contested.

Significant Examples 

Nevertheless, Aetna is including contract provisions that bar payment for all 28 NEs. And, WellPoint is refusing payment for 4/28 NEs in the State of Virginia.

Other insurers, like UnitedHealth Group and Cigna are considering similar moves; as are all 39 members of the Blue Cross/Shield Association. Hospitals in Minnesota and Massachusetts have already agreed to not charge for all, or at least some, of the 28 never events identified by the NQF. 

Assessment

And so, is this a national economic trend whose time has come; or just an unfortunate quality-care issue gone wrong regarding the “law of unintended consequences?”  What are your thoughts? 

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Key-Person Insurance for Physicians

Posted on January 16, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Another Business Use of Life Insurance

Gary A. Cook; MSFS, CLU, RHU, CFP® CMP™ 

If a key physician were to die prematurely, what would potentially happen to the affected medical practice?

In many cases, especially in smaller practices, it would have a devastating affect on the bottom line, or even precipitate a bankruptcy. 

In these circumstances, a form of business insurance, called “key person coverage”, may be recommended in order to alleviate the potential financial problems resulting from the death of that employee.

Variations on a Life Insurance Theme

In our scenario, the medical practice would purchase and own a life insurance policy on the key person or physician. Upon the death of the key doctor employee, the life insurance proceeds could be used to:

· Pay off bank loans for the practice;

· Replace lost profits of the practice;

· Establish a reserve for the search, hiring and training of a physician replacement. 

Example: 

Main Lion Hospital [MLH] gained national recognition as an innovator with a new procedure for laser eye surgery. Not only have they invested an enormous sum of money in the equipment used, but they are also very dependent on the talents and continued employment of Dr. David James Williamson IV, who helped design the equipment and procedure.

Assessment:

Fearing the economic consequences if Dr. Williamson were to die, MLH purchased an insurance policy on his life to help pay for the immediate replacement and the training of another specialist.

And so, do you have this type of insurance policy as either the key-physician, or an associate doctor in a medical practice that recognizes the need?

Related information: www.jbpub.com/catalog/9780763733421

More info: www.HealthDictionarySeries.com

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