CMS Rule to Reduce Payments for Hospital Mistakes

A final rule from the Affordable Care Act will reduce or prohibit payments to doctors, hospitals and other health care providers for services that result from certain preventable healthcare acquired illnesses or injuries according to the Centers for Medicare & Medicaid Services.

This rule will help reward providers who provide high quality care to people in Medicaid leading to better care for patients and lower costs.

The rule builds on States’ successes and Medicare policies, which already reduce or prohibit hospital payments for preventable conditions and would better align Medicare and Medicaid payment policy, while giving States the flexibility to expand the list of preventable conditions the program would no longer pay for.


“Today, we are partnering with States to give them the tools to improve the quality of care for patients and lower costs for taxpayers,” said CMS Administrator Donald M. Berwick, M.D.  “These steps will encourage health professionals and hospitals to reduce preventable infections, and eliminate serious medical errors.  As we reduce the frequency of these conditions, we will improve care for patients and bring down costs at the same time.”

The new rule prohibits States from making payments to providers under the Medicaid program for conditions that are reasonably preventable.  It uses Medicare’s list of preventable conditions in inpatient hospital settings as the base (adjusted for the differences in the Medicare and Medicaid populations) and provides States the flexibility to identify additional preventable conditions and settings 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.


To learn more, see here.