A recent update from the law firm McDermott Will & Emery, explained how the Centers for Medicare and Medicaid Services (CMS) will be imposing payment restrictions on provider-preventable conditions.
Effective July 1, 2011, states must submit state plan amendments to CMS indicating how each state will prohibit Medicaid payments to providers for provider-preventable conditions as required under the Patient Protection and Affordable Care Act. CMS revealed that it will delay compliance action related to the new provisions until July 1, 2012.
On June 6, 2011, CMS published its final rule (Final Rule) implementing Section 2702 of the Patient Protection and Affordable Care Act. Section 2702 requires the Secretary of U.S. Department of Health and Human Services (HHS) to establish rules prohibiting payments to states for provider-preventable conditions (PPCs). The Final Rule defines PPCs as both health-care acquired conditions (HCACs) and other provider-preventable conditions (OPPCs).
As of July 1, 2011, CMS is statutorily required to deny Medicaid reimbursement requests associated with PPCs. Additionally, state Medicaid programs must submit state plan amendments to CMS indicating how the states will deny medical assistance for PPCs (subject to certain limited exceptions).
The Final Rule also provides that Medicaid managed care organizations (MCOs) that contract with providers to serve Medicaid beneficiaries must require those providers to report PPCs associated with claims to the MCO. CMS revealed that it expects MCOs to track PPC data and make it available to the state upon request. To accomplish this, the Final Rule requires states that provide medical assistance using MCOs to modify their managed care contracts to reflect the PPCs payment adjustment.
The first category of PPCs, HCACs, are applicable to Medicaid inpatient hospital settings and incorporate Medicare’s list of hospital-acquired conditions, exclusive of Deep Vein Thrombosis/Pulmonary Embolism (as these complications are not common in Medicaid-eligible populations).
CMS notes in the preamble of the Final Rule that while it is inherently complex to incorporate Medicare’s hospital-acquired conditions as a baseline for each state because of population differences across the programs, CMS anticipates that states will be able to appropriately account for such differences. Notably, all states are required to comply with subsequent updates or revisions to the Medicare hospital-acquired condition list, which is typically published in the IPPS rule issued annually by CMS.
The second category of PPCs, OPPCs, apply broadly to inpatient and outpatient settings and include the three Medicare National Coverage Determinations (i.e., surgery on the wrong patient, wrong surgery on a patient and wrong site surgery). Like HCACs, state plans must provide for nonpayment for care and services related to OPPCs regardless of where the patient received services (i.e., inpatient or outpatient settings).
The Final Rule encourages states to increase the number of PPCs for which Medicaid payments can be denied, provided that a state consider evidence-based guidelines in adopting additional PPCs and obtain CMS approval before adding additional PPCs.
Impact on CME Providers
The final rule from CMS will have a significant impact on hospitals and healthcare institutions and providers. This will put even more pressure on already stressed physicians and healthcare professionals to meet higher demands for healthcare quality and measures. Given that the rule will prohibit payments to states for health-care acquired conditions (HCACs) and other provider-preventable conditions (OPPCs), there must be a renewed emphasis on addressing these issues.
Continuing medical education (CME) that addresses HCACs and OPPCs offers an opportunity for hospitals, healthcare institutions, and individual physicians and healthcare professionals that will improve patient outcomes and prevent loss of payments.