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Medicare HAC and POA non-payment changes take effective today

Hospitalist Leadership Connection, September 30, 2008

The Centers for Medicare & Medicaid Services (CMS) overhauled its system of MS-DRG hospital reimbursement. Taking effect today, Oct. 1, CMS will cease to pay hospitals for certain “never events,” including hospital-acquired conditions (HAC) with adjustments to present-on-admission (POA) conditions.

For discharges occurring on or after Oct. 1, hospitals will not receive reimbursement for conditions that are “(a) high cost or high volume or both, (b) result in the assignment of a case to a DRG that has a higher payment when present as a secondary diagnosis, and (c) could reasonably have been prevented through the application of evidence-based guidelines,” states the CMS Web site. The CMS changes were brought forth by the Deficit Reduction Act (DRA) of 2005, signed by the president on Feb. 8, 2006, in which the secretary of the Department of Health and Human Services named what conditions were reasonably preventable. The changes were published in the CMS Inpatient Prospective Payment System (IPPS) Fiscal Year 2009 Final Rule on July 31.

The 10 categories of HACs under payment provision are the following conditions:

• Foreign object retained after surgery
• Air embolism
• Blood incompatibility
• Stage III and IV pressure ulcers
• Falls and trauma
• Manifestations of poor glycemic control
• Catheter-associated urinary tract infection
• Vascular catheter-associated infection
• Surgical site infection
• Deep Vein Thrombosis (DVT)/Pulmonary Embolism (PE)

The POA Indicator and HAC payment provision apply only to IPPS hospitals. Some hospitals are exempt, including cancer hospitals, children’s inpatient facilities, and critical access hospitals.

To receive more information on MS-DRGs and to earn CME credits, register for the Webcast called “Clinical Documentation Updates for Hospitalists: Position Your Practice to Maximize Value,” sponsored by HCPro, Inc., in partnership with the Society of Hospital Medicine.

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