CMS Issues Final Rule on Medicaid Payment Reductions for Treatment of HACs - June 7, 2011

The federal Centers for Medicare & Medicaid Services (CMS) on June 1 issued its final rule on payment reductions or prohibitions by physicians, hospitals and health care providers who treat certain preventable health care-acquired conditions (HACs). Under the final rule, states would be prohibited from making Medicaid payments to providers for easily preventable HACs. The list of preventable conditions is based on the Medicare list of preventable conditions in inpatient hospital settings, adjusted for differences in the Medicaid program. In addition, it also allows states to identify additional preventable conditions for which they may deny Medicaid payments. The final rule goes into effect July 1, 2011, and states may implement the policies any time between then and July 1, 2012. NAPH submitted comments on the proposed rule in March and had advocated for a number of changes, including that CMS limit the scope of the nonpayment program to those HACs identified in Medicare, rather than giving states the flexibility to expand the list of prohibited conditions.