Medicaid Stops Payments on “Healthcare-Acquired Conditions”

Effective July 1 the federal government will prohibit Medicaid payments to the states for services treating healthcare-acquired conditions. Compliance begins July 1, 2012.

The Centers for Medicare and Medicaid Services published the new policy in a final rule June 6. The changes and the effective date were mandated in section 2702 of the Patient Protection and Affordable Care Act.

In effect, CMS has extended to Medicaid a program similar to the Medicare payment adjustments related to hospital-acquired conditions, or HACs; however, states will have latitude to adjust their programs according to their needs and conditions.

The rule introduces several new terms into the payment lexicon: “provider preventable conditions,” “healthcare-acquired conditions,” and “other provider-preventable conditions.”

Medicare HACs as a Baseline

CMS will use the Medicare HACs as a baseline for the Medicaid program, with one exception. The Medicaid program will exclude Deep Vein Thrombosis/Pulmonary Embolism following total knee replacement or hip replacement in pediatric and obstetric patients.

Within the rule CMS acknowledges that incorporating Medicare’s HACs in Medicaid’s policy is “inherently complex” because of differences in patient populations across the programs. It “fully understands” that the Medicare HACs will not directly apply to various subsets of Medicaid’s population, it writes, and it expects states will address the differences individually through their own payment policies.

Under the rule states have the authority to identify other provider-preventable conditions for which Medic aid payment will be prohibited. These additional conditions will be approved through their Medicaid state plans.

Introducing “Provider Preventable Conditions”

HCACs are a term within the Affordable Care Act, which Congress uses exclusively to describe the conditions subject to payment reductions. In writing its rule enacting the statute, CMS has introduced an umbrella term, ‘‘provider-preventable conditions,’’ which encompasses HCACs and a new concept of “other provider-preventable conditions,” or OPPCs.

CMS introduces OPPCs to describe additional conditions that the states will identify.

The new terms are necessary, CMS writes in its rule, because HCACs are too narrowly defined in the statute. They do not allow for additional conditions to be included, and they exclude three Medicare national coverage determinations. Further, HCACs apply only to inpatient hospital settings. CMS defines the two terms as follows:

Healthcare-acquired conditions:

  • Apply to Medicaid inpatient hospital settings
  • Include at a minimum the full list of Medicare’s HAC, with the one exception noted

Other provider-preventable conditions:

  • Apply broadly to Medicaid inpatient and outpatient healthcare settings
  • Include at a minimum the three Medicare national coverage determinations—surgery on the wrong patient, wrong surgery on a patient, and wrong site surgery
  • May expand to other settings with CMS approval
  • May expand to other conditions with CMS approval

States must revise their Medicaid plans to comply with the provisions and implement provider self-reporting through claims systems.


  1. It would be interesting to hear the response from the providers as I guess there’s going to be a lot of disagreement about what is preventable and what is not.

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  2. I find the rule a necessary one. Insurance companies should not be held liable for payment for things that were purely “their mistake”. I am afraid that the refusal of medicaid to pay these claims with in advetently pose a problem because the hospital may still try to aquire payment from the patient.

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    • I do agree that things that could be easily prevented should not be paid, however I work in healthcare and sometimes even the most preventable happens. The patient wakes up and is confused as to where he/she is and tries to get up out of bed and falls and gets injured–preventable yes but that scenario does happen easily.

      Infections post op—patients not being compliant with post antibiotic treatment, not following post op instructions and a PE or an infection develops, the hospital is penalized but not the patient. When do we as a society start holding the patient accountable as well?

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  3. I think that there needs to be more patient education for specific surgery, diagnostic testing… the support staff should have a more detailed responsibility included in pre/post procedures and add minor preventions in the daily procedures that could be part of the coding.

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