CMS Proposes PPC Medicaid Payment Reductions

Mike Iarrobino, for HealthLeaders Media, February 16, 2011

Provider-preventable conditions (PPC) would receive a payment reduction under Medicaid, similar to the treatment of hospital-acquired conditions (HAC) by the Medicare program, under a proposed rule posted by CMS February 16.

The proposal comes on the heels of increased attention to Medicaid as a result of the Patient Protection and Affordable Care Act; previous months have seen a proposed expansion of the recovery audit contractor program to Medicaid and an extension of the National Correct Coding Initiative edits to Medicaid claims. Although some states already have Medicaid provisions to reduce payment for conditions that match the Medicare HACs, the new rule would require such payment reductions nationwide. States will also have the flexibility to individually designate additional conditions that would result in reduced payment.

This flexibility may be a concern to Medicaid providers, says Debbie Mackaman RHIA, CHCO, regulatory specialist for HCPro, Inc., in Danvers, MA. “They’re giving Medicaid a long leash on this. This opens a huge window that allows them to create new restrictions on payments that are already minimal.” Importantly, CMS would allow states to expand beyond the inpatient setting, to include outpatient hospitals, nursing facilities, and ambulatory care settings.

PPCs would be divided into two types:

  1. Healthcare-acquired conditions (HCAC), which would track the HACs identified for Medicare
  2. Other provider-preventable conditions (OPPC), which states could specify as extensions of the payment reduction program
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