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Will CMS' no-pay rule significantly hurt hospitals' bottom lines?

Quality Improvement Monitor, October 3, 2008

As the healthcare industry ushers in a new era of accountability, some suggest that Medicare’s decision to stop paying for preventable conditions won’t have a big impact on the bottom line, according to the Wall Street Journal Health Blog.

As of October 1, 2008, CMS stopped paying for 10 hospital-acquired conditions including:

  • Certain manifestations of poor control of blood sugar levels
  • Deep vein thrombosis or pulmonary embolism following total knee replacement and hip replacement procedures
  • Serious preventable event—retained object after surgery
  • Serious preventable event—air embolism
  • Serious preventable event—blood incompatibility
  • Catheter-associated urinary tract infections
  • Pressure ulcers
  • Vascular catheter–associated infection
  • Patient falls
  • Surgical site infection -- mediastinitis after coronary artery bypass graft surgery, bariatric surgery and certain orthopedic procedures

    The new no-pay policy, expected to save CMS $21 million annually, will not reimburse hospitals for the care to treat the hospital-acquired conditions if it puts patients in a higher-paying diagnostic related group (DRG). However, many Medicare patients are elderly and have many co-morbidities, so they may likely be in the higher DRG anyway. CMS’ annual Medicare tab comes to $100 billion.

    “This is tiny, but not unimportant,” American Hospital Association CEO Rich Umbdenstock told the Health Blog.

    For more information, click here.

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