PPC Final Rule Limits Provider Payments

Andrea Kraynak, CPC, for HealthLeaders Media, June 3, 2011

Provider-preventable conditions (PPC), including health care-acquired conditions (HCAC), are now subject to payment adjustments under the Medicaid program, according to the final rule released by CMS June 1.

The rule, "Medicaid Program; Payment Adjustment for Provider-Preventable Conditions Including Health Care-Acquired Conditions," implements provisions in the Patient Protection and Affordable Care Act requiring HHS to prohibit federal payment to states for specified HCACs, as well as additional conditions determined on a state-by-state basis.

"We found that 29 states do not have existing HCAC-related nonpayment policies," according to the final rule. "Most of the 21 states that currently have HCAC-related nonpayment policies identify at least Medicare's HACs [hospital-acquired conditions] for nonpayment in hospitals.

"However, it is important to note that at least half of the existing policies we reviewed 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."

CMS introduces the term PPCs in the rule, which consists of two categories: HCACs and other provider preventable conditions (OPPC). OPPCs would be those additional conditions identified and approved by states that are not found on the list of HCACs, which are included on pages 20 and 21 of the final rule. This also allows states to expand beyond the inpatient hospital setting HCACs.

"We believe, and confirmed through public comment, that incorporating Medicare's HACs in Medicaid's policy is inherently complex because of population differences across programs," according to the rule. "We fully understand that the HACs developed for Medicare's population will not directly apply to various subsets of Medicaid's population. While we have established Medicare as a baseline, we understand that states will, through their payment policies, appropriately address these differences."

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