Medicaid to Quit Paying for Preventable Events

WASHINGTON -- The Centers for Medicare and Medicaid Services (CMS) has announced that hospitals and healthcare providers will no longer be reimbursed for treating their Medicaid patients for illnesses, injuries, or readmissions that should have been prevented. A final rule announced Wednesday enacts a portion of the Affordable Care Act (ACA) that prohibits states from making Medicaid payments to providers for conditions that are deemed "reasonably preventable." In 2008, Medicare stopped reimbursing hospitals for treating conditions, infections, or illnesses that were acquired in the hospital, and for any readmissions associated with treating those hospital-acquired conditions. The Medicaid list of what is preventable mirrors the Medicare list, which includes transfusing the wrong blood type; falls that result in dislocation, fractures, or head injuries; burns and electric shocks; catheter-associated urinary tract infections; surgical site infections after bariatric surgery or coronary artery bypass; and manifestations of poor glycemic control. In addition, CMS has issued National Coverage Decisions stating that Medicare won't pay for certain so-called "never events" -- those which should never happen -- including performing the wrong procedure; performing the procedure on the wrong body part, or performing the correct procedure, but on the wrong patient. Medicaid will also follow Medicare's lead on that issue and not pay for never events. "These steps will encourage health professionals and hospitals to reduce preventable infections and eliminate serious medical errors," CMS Administrator Donald Berwick, MD, said in a press release. "As we reduce the frequency of these conditions, we will improve care for patients and bring down costs at the same time." States can identify additional preventable conditions for which Medicaid payment will be denied. The final rule is effective July 1, 2011, but gives states the option to implement between its effective date and July 1, 2012. Since Medicare enacted its policy of not paying for preventable events, private insurers have begun to do the same.

For instance, Aetna doesn't reimburse for eight hospital-acquired infections or for three never events, according to information provided by America's Health Insurance Plans (AHIP), an industry trade group. Cigna doesn't pay for never events, reduces payments for hospital-acquired infections in certain cases, and offers payment incentives for