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CMS’ Final HAC Rule Baffles Hospitals

Cheryl Clark, for HealthLeaders Media, June 9, 2011


"We know states have been struggling across the country, and we'd hate to see this used as a cost-saving or cost-cutting methodology, instead of focusing on the serious nature of preventing patient harm," Feldpush added.

Naturally, when a hospital makes a preventable error, not paying the hospital to manage and correct the mistake is a good incentive to improve quality.
But policy makers need to be sure that those incidents are truly preventable, and not a consequence of patient mix and co-morbidities. Under this rule, there will be no uniform policy state to state on what legitimately constitutes an OPPC.

Medicaid, which paid $380 billion to care for 50.1 million people in 2009 – roughly one in five people ­– is a joint state and federal operation. Roughly 66% of Medicaid comes from federal funds, the other half from the states. More than 40% of these funds are used to pay hospitals, plus there are billions more for Medicaid managed care to pay for acute care.

Asked to give their views, several hospital representatives who usually jump to comment confessed this week they don't understand the rule well enough.  A spokesman for the agency that oversees Medi-Cal, the $52 billion Medicaid program in California, said state officials are still reviewing its potential impact.

Feldpush says CMS did not give needed guidance in several other areas. It didn't identify the criteria states should use to select OPPCs and how to evaluate the cost of these medical mistakes that they then withhold from providers' payments.

Some states reimburse hospitals for Medicaid patient care based on a DRG system, while some do it with per diem rates. "How do you even determine the added cost of care?" Feldpush asks.

In its rule, CMS explains that some states have already extended their list of HACs far beyond the required Medicare base list.

"It was clear from many of our discussions that states hoped to be able to look to this provision to provide additional definition regarding the types of conditions to identify for nonpayment, as well as to provide some support in working with provider communities to which these policies would be applied."

At least half of the existing state policies in the country, CMS continued, "exceeded Medicare's current HAC requirements and policies, either in the conditions identified, the systems used to indicate the conditions, or the settings to which the nonpayment policies applied."

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