Potential Unintended Consequences Due to Medicare’s
“No Pay for Errors Rule”? A Randomized Controlled Trial
of an Educational Intervention with Internal Medicine
Somnath Mookherjee, MD1, Arpana R. Vidyarthi, MD1, Sumant R. Ranji, MD1, Judy Maselli, MSPH2,
Robert M. Wachter, MD1, and Robert B. Baron, MD, MS1
1Department of Medicine, Division of Hospital Medicine, University of California, San Francisco, San Francisco, CA, USA;2Department of
Medicine, Division of General Internal Medicine, University of California, San Francisco, San Francisco, CA, USA.
BACKGROUND: Medicare has selected 10 hospital-ac-
quired conditionsfor which it will not reimburse hospitals
unless the condition was documented as “present on
admission.” This “no pay for errors” rule may have a
profound effect on the clinical practice of physicians.
OBJECTIVE: To determine how physicians might change
their behavior after learning about the Medicare rule.
DESIGN: We conducted a randomized trial of a brief
educational intervention embedded in an online survey,
using clinical vignettes to estimate behavioral changes.
PARTICIPANTS: At a university-based internal medicine
residency program, 168 internal medicine residents were
eligible to participate.
INTERVENTION: Residents were randomized to receive a
one-page description of Medicare’s “no pay for errors”
rule with pre-vignette reminders (intervention group) or
no information (control group). Residents responded to
five clinical vignettes in which “no pay for errors”
conditions might be present on admission.
MAIN MEASURES: Primary outcome was selection of the
single most clinically appropriate option from three clini-
cal practice choices presented for each clinical vignette.
KEY RESULTS: Survey administered from December
2008 to March 2009. There were 119 responses (71%).
In four of five vignettes, the intervention group was less
likely to select the most clinically appropriate response.
This was statistically significant in two of the cases. Most
residents were aware of the rule but not its impact and
specifics. Residents acknowledged responsibility to know
Medicare documentation rules but felt poorly trained to
do so. Residents educated about the Medicare’s “no pay
for errors” were less likely to select the most clinically
appropriate responses to clinical vignettes. Such choices,
if implemented in practice, have the potential for causing
patient harm through unnecessary tests, procedures,
and other interventions.
KEY WORDS: errors; Medicare; unintended consequences; residents.
J Gen Intern Med 25(10):1097–101
© The Author(s) 2010. This article is published with open access at
On 01 October 2008, Medicare’s “no pay for errors” rule went into
is designed to improve the care of Medicare patients by incentiv-
izing hospitals to prevent designated hospital-acquired adverse
events. Medicare will not reimburse the hospital for increased
physician as having been present on admission.
While it is important to understand how physicians may
change their practices as a result of these new reimbursement
rules, it may be particularly important to understand the impact
on residents. The Accreditation Council for Graduate Medical
Education (ACGME) has mandated that trainees achieve compe-
tency in systems-based practice, which is described as “aware-
ness of and responsiveness to the larger context and system of
health care”2. The implementation of this new Medicare rule
provides the ideal conditions for a natural experiment to
understand whether residents are achieving this competency.
Residents care for a large number of Medicare inpatients3,4and
potential changes in their practices as a consequence of this rule
may have clinical ramifications for these patients. Moreover,
characterizing the resident physician response to the rule
provides a framework to understand the potential for “no pay
for errors” rules to result in unintended consequences through-
out our healthcare system.
We performed a randomized trial of a brief educational
intervention, seeking to determine whether more knowledge of
the changes in Medicare reimbursement might lead resident
physicians to provide care that sought to maximize revenue
while conflicting with evidence-based guidelines.
Sites and Subjects
On October 1st, 2008, the Medicare rule on hospital-acquired
conditions went into effect. We conducted our study at the
University of California, San Francisco (UCSF) between De-
Electronic supplementary material The online version of this article
(doi:10.1007/s11606-010-1395-9) contains supplementary material,
which is available to authorized users.
Received November 15, 2009
Revised April 9, 2010
Accepted April 20, 2010
Published online June 8, 2010