PPC Final Rule Limits Provider Payments

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

As with the Medicare HAC program, there will be no payment reductions for those conditions that existed prior to treatment by the provider, according to the rule.

In addition, payment reductions are limited to only those PPCs that would otherwise result in a payment increase and those that the state can "reasonably isolate for nonpayment the portion of the payment directly related to treatment for the PPC."

In the rule, CMS notes that while the point of the Medicaid PPC payment adjustments is to improve quality of care, it does expect to realize cost savings on a state and federal level.

The federal government expects to save approximately $4–5 million annually between 2012–2015, with states experiencing an additional savings of $3–4 million each fiscal year, leading to a total savings of $35 million through 2015.

"These steps will encourage health professionals and hospitals to reduce preventable infections, and eliminate serious medical errors. As we reduce the frequency of these conditions, we will improve care for patients and bring down costs at the same time," CMS Administrator Donald M. Berwick, MD, said in a June 1 press release.

Due to the fact that the majority of hospitals already have programs in place to reduce the occurrence of Medicare HACs, CMS does not believe the cost of implementing a similar program for Medicaid HCACs will be significant.

The effective date of the rule is July 1, 2011; however, CMS is delaying compliance action until July 1, 2012.

Editor's note: Access the display copy of the final rule here. The proposed rule was published in the Federal Register February 17.

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