Medicare Payment For Selected Adverse Events: Building The Business Case For Investing In Patient Safety

This study estimates that Medicare extra payments under the hospital prospective payment system (PPS) range from about 700 per case of decubitus ulcer to 9, 000 per case of postoperative sepsis in the five types of adverse events identifiable in Medicare claims. Medicare extra payment for the five types of events totals more than 300 million per year, accounting for 0. 27 percent of annual Medicare hospital spending. But these extra payments cover less than a third of the extra costs incurred by hospitals in treating these adverse events. We conclude that both Medicare and hospitals gain financially by improving patient safety.