Final Rule Reduces Medicaid Payments for Preventable Conditions

The Centers for Medicare & Medicaid Services (CMS) issued its final rule Wednesday reducing or prohibiting payments to doctors, hospitals and other healthcare providers for services that result from certain preventable healthcare-acquired illnesses, injuries or readmissions.

The rule prohibits states from making payments to providers under the Medicaid program for “reasonably preventable” conditions, which are based on Medicare’s list of preventable conditions in inpatient hospital settings—adjusted for the differences in the Medicare and Medicaid populations—and allows states to identify additional preventable conditions and settings for which Medicaid payment will be denied. Some current preventable conditions as defined by Medicare include: Stage 3 and 4 pressure ulcers, falls, catheter-associated urinary tract infections and vascular-catheter associated blood stream infections.

“This rule will help reward providers who provide high quality care to people in Medicaid leading to better care for patients and lower costs,” CMS said in a statement.

The rule aligns itself with current Medicare policy, which already reduces or prohibits hospital payments for preventable conditions, and is part of CMS’ ongoing efforts to improve care quality while controlling overall healthcare costs under the Affordable Care Act.

“These steps will encourage health professionals and hospitals to reduce preventable infections, and eliminate serious medical errors,” said CMS Administrator Donald M. Berwick, MD, in a statement. “As we reduce the frequency of these conditions, we will improve care for patients and bring down costs at the same time.”

The final rule is effective July 1, but gives states the option to implement between its effective date and July 1, 2012.

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Final rule: Medicaid Program; Payment Adjustment for Provider-Preventable Conditions Including Health Care-Acquired Conditions(PDF format)

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