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CMS Proposes PPC Medicaid Payment Reductions

Mike Iarrobino, for HealthLeaders Media, February 16, 2011

CMS explains that HCACs would set a floor on the payment reductions. States seeking to reduce payment by specifying diagnosis codes as OPPCs—above and beyond the HCAC category—would have to adhere to the following guidelines:

  • The codes must have a high cost or high volume, or both
  • The codes must result in the assignment of a case to a MS-DRG that has a higher payment when the code is present as a secondary diagnosis.
  • The codes must describe conditions that could reasonably have been prevented through the application of evidence-based guidelines

The proposed rule, if finalized, would have varying effects on Medicaid providers—already 21 states have programs in place to reduce Medicaid payment for specified conditions. So Medicaid providers in the remaining 29 states would face new payment reductions as a result of the rule. States that already have payment reduction programs in place vary considerably regarding their defined PPCs.

Mackaman encourages providers to read and comment on the proposed rule. She encourages Medicaid providers in states that already have payment reduction programs in place to examine the current programs and consider how their states might expand the reductions to other settings. Providers in states that currently lack such a program may want to examine nearby state programs, as well as how such measures will affect them.

CMS’ proposed rule will be published in the February 17 Federal Register, available online.

Mike Iarrobino is Managing Editor of HCPro's MedicareFind, a comprehensive database of Medicare rules, regulations, and CMS documents governing reimbursement.

Comments are moderated. Please be patient.

2 comments on "CMS Proposes PPC Medicaid Payment Reductions"


Cody Page (3/18/2011 at 1:07 PM)
Mike, You noted that 29 states already have in place Medicaid reimbursement penalties for potentially preventable readmissions. Where did you get this information? If you can point me to a website or data source for this, I would appreciate it. Thanks!

Dan Harrah, MD (2/17/2011 at 4:34 PM)
This is clearly a case of toxic leadership. You can't legislate away infection or blood clots. Doctor's are not a bunch of idiots making sloppy mistakes all the time. Medicaid patients are sicker than the average patient due to lifestyle choices; unhealthy living rather than factors under a doctors control. Yet we get paid less for treating them already, and now you want to blame us for doing a bad job??? What will you do when doctors refuse to see these patients because we are tired of the hassle and lack of reward for taking on these difficult patietns who are way more likely to abuse prescription drugs?