CMS PROHIBITS MEDICAID PAYMENTS ON
EFFEC TIVE JULY 1 the federal government will prohibit Medicaid payments to states for services treating healthcare-acquired
conditions. Compliance begins July 1, 2012.
The Centers for Medicare and Medicaid Services published
the new policy in a final rule June 6. The changes and the effective date were mandated in section 2702 of the Affordable Care
In effect, CMS has extended to Medicaid a program similar to
the Medicare payment adjustments related to hospital-acquired
conditions, or HACs; however, states will have latitude to adjust
their programs according to their needs and conditions.
The rule introduces several new terms into the payment lexicon: “provider-preventable conditions,” “healthcare-acquired
conditions,” and “other provider-preventable conditions.”
Medicare HACs as a Baseline
CMS will use the Medicare HACs as a baseline for the Medicaid
program, with one exception: deep vein thrombosis/pulmonary
embolism following total knee replacement or hip replacement
in pediatric and obstetric patients.
Within the rule CMS acknowledges that incorporating the
Medicare HACs in Medicaid policy is “inherently complex” because of differences in patient populations across the programs.
It “fully understands” that the Medicare HACs will not directly
apply to various subsets of Medicaid’s population, it writes,
and it expects states will address the differences individually
through their own payment policies.
Under the rule states have the authority to identify other provider-preventable conditions for which Medicaid payment will
be prohibited. These additional conditions will be approved
through their Medicaid state plans.
Introducing “Provider-Preventable Conditions”
HCACs are a term within the Affordable Care Act, which Congress uses exclusively to describe the conditions subject to payment reductions. In writing its rule enacting the statute, CMS
has introduced an umbrella term, “provider-preventable conditions,” which encompasses HCACs and a new concept of “other
provider-preventable conditions,” or OPPCs. OPPCs describe
additional conditions that states will identify.
The new terms are necessary, CMS writes in its rule, because
Researching the States
THE AFFORDABLE CARE ACT directed the Department of
Health and Human Services to identify state practices that
prohibit payments for healthcare-acquired conditions and
incorporate as appropriate those practices into the federal
HHS found that 21 states have such policies, most of
which identify Medicare HACs for nonpayment in hospitals.
More than half of the policies exceeded the Medicare requirements. Seventeen states had Medicaid-specific policies, half of which used the Medicare HACs.
HCACs are too narrowly defined in the statute. They do not allow for additional conditions to be included, and they exclude
three Medicare national coverage determinations. Further,
HCACs apply only to inpatient hospital settings. CMS defines
the two terms as follows:
x Apply to Medicaid inpatient hospital settings
x Include at a minimum the full list of Medicare’s HAC, with
the one exception noted
Other provider-preventable conditions:
x Apply broadly to Medicaid inpatient and outpatient
x Include at a minimum the three Medicare national cover-
age determinations—surgery on the wrong patient, wrong
surgery on a patient, and wrong site surgery
x May expand to other settings with CMS approval
x May expand to other conditions with CMS approval
States must revise their Medicaid plans to comply with the
provisions and implement provider self-reporting through
claims systems. ¢
Centers for Medicare and Medicaid Services. “Medicaid
Program; Payment Adjustment for Provider-Preventable
Conditions Including Health Care-Acquired Conditions.”
Federal Register 76, no. 108 (June 6, 2011): 32816–38.