Medicaid policy takes effect on July 1, 2012, and mirrors existing Medicare policy

Medicare was the first government program to announce that it would not reimburse hospitals for certain hospital-acquired conditions. Pathologists will be interested to learn that the Medicaid program is now prepared to institute a similar non-reimbursement policy. This fulfills a Dark Daily prediction that other government and private health programs would copy this Medicare policy.

As of July 1, 2012, Medicaid will no longer reimburse hospitals for treatment of certain hospital-acquired conditions (HAC). The Centers for Medicare and Medicaid Services (CMS) published its final rule on June 6th as a way of aligning Medicaid’s HAC policies with those of the Medicare program. The new Medicaid HAC rule becomes a baseline policy on top of which States can still attach their own HAC reimbursement restrictions.

Clinical laboratory managers and pathologists should take note that this action is a direct result of the Accountable Care Act (ACA), known as “Obamacare.” This federal health reform law originally required CMS to implement the new policy by July 1, 2011. CMS has postponed that implementation by one year so the States will have time to comply with the rule. By September 30th, 2011, States must submit plans on how they intend to comply.

By not reimbursing hospitals for certain hospital-acquired conditions, federal health officials hope to encourage improvement in patient care through preventive steps that will lower healthcare costs. This policy officially started with the Deficit Reduction Act (DRA) of 2005. Signed into law by George W. Bush on February 8th, 2006, the DRA created the hospital-acquired condition program, under which CMS identified nine “preventable conditions” for which it would not reimburse healthcare providers.

Hospital Labs Sometimes Have a Role in “Reasonably Preventable” Conditions

CMS intends to deny Medicaid payments for HACs that are “reasonably preventable,” just as they did with Medicare in 2008. That plan was projected to save the government $21 million. But a study published in Health Affairs at that time predicted the savings would fall short of government projections, in addition to costing hospitals $2.7 million in non-payments.

HACs designated for no-payment within the Medicare final rule include:

  1. Foreign Object Retained After Surgery
  2. Air Embolism
  3. Blood Incompatibility
  4. Stage III and IV Pressure Ulcers
  5. Falls and Trauma
  6. Manifestations of Poor Glycemic Control
  7. Catheter-Associated Urinary Tract Infection
  8. Vascular Catheter-Associated Infection
  9. Surgical Site Infection
  10. Deep Vein Thrombosis (DVT)/Pulmonary Embolism (PE)

For pathologists and clinical laboratory managers working within hospitals and health systems, this list includes several items where appropriate use of medical laboratory testing, or blood bank services, can play a role in preventing specific types of hospital-acquired conditions.

Dark Daily has predicted that private payers will take steps to institute similar policies of non-payment for specific hospital-acquired conditions. Dark Daily also predicts that the list of these conditions is likely to be expanded in future years.

The new Medicaid final rule adopts the same HAC list, and adds a few new acronyms intended to further define and standardize what constitutes an HAC. CMS found the term Hospital-Acquired Conditions (HAC) to be too narrow, and so, to improve understanding, CMS created the new term “Health Care-Acquired Conditions” (HCAC), which Congress used in the Affordable Care Act to describe all types of preventable conditions.

CMS Creates New Alphabet Soup of Terms and Acronyms

But even this term proved too broad. Therefore the Medicaid rule includes two new terms as well: “Provider-Preventable Conditions” (PPC) and “Other Provider-Preventable Conditions” (OPPC). These new acronyms have created some consternation among various healthcare organizations.

The expanded list of acronyms now includes the following:

  • HAC—Hospital-Acquired Condition
  • HCAC—Health Care-Acquired Condition
  • PPC—Provider-Preventable Condition
  • OPPC—Other Provider-Preventable Condition

It is typical of any government program to create and use acronyms. Thus, along with the prediction that private payers are likely to adopt their own version of no-pay for hospital-acquired conditions (HAC), Dark Daily predicts, with a high degree of confidence, that rule-makers at CMS are likely to institute additional acronyms to describe health conditions that are preventable by hospitals, physicians, and other types of providers.

Might there one day be an acronym to describe a “laboratory-acquired condition” (LAC)? That makes for interesting speculation. Clinical laboratory managers and pathologists should not be surprised if some government bureaucrat comes up with a list of specific laboratory testing activities that would fit the definition of a laboratory-acquired condition—along with guidelines to deny reimbursement to labs whenever such an LAC were to occur.

-Michael McBride

Related Information:

Medicaid to Reduce Hospital Pay for Preventable Conditions (American Medical News)

Medicare’s No-Pay Rule Has Little Financial Impact (American Medical News)

Medicaid Stops Payments on “Healthcare-Acquired Conditions” (Journal of AHIMA)

Medicare’s Policy Not To Pay For Treating Hospital-Acquired Conditions: The Impact (Health Affairs)

AHIMA Comments Letter HCAC

Centers for Medicare and Medicaid Services (Hospital-Acquired Conditions)

H.R.3590 – Patient Protection and Affordable Care Act

Up to $500 million in Affordable Care Act funding will help health providers improve care (HHS Press Release)

Partnership for Patients to Improve Care and Lower Costs for Americans

Payment Adjustment for Health Care-Acquired Conditions (Health Reform Issue Brief)

Up To $500 Million in Affordable Care Act Funding Will Help Health Providers Improve Care

Partnership for Patients to Improve Care and Lower Costs for Americans