A newly final Centers for Medicare and Medicaid Services (CMS) rule required by Section 2702 of the Patient Protection and Affordable Care Act (PPACA) will disallow federal funding under Medicaid effective July 1, 2012 for certain never events that State Medicaid Programs are required to define (a/k/a “healthcare acquired condition” or “HCAC” and “”other provider preventable condition” or “OPPC”). HACs, or “hospital acquired conditions,” such as surgery on the wrong body part for which Medicare already denies payment to hospitals, must be included in the State Medicaid Program definition of HCACs. The new OPPC designation is intended for conditions more likely to occur in settings outside hospitals such as nursing facilities, long-term acute care hospitals, ambulatory surgery centers and federally qualified health centers. OPPCs must be determined from evidence-based guidelines.

Coinciding with the final CMS rule, the National Quality Forum (NQF) has expanded its list of events that provider consensus has determined should not occur when receiving treatment from a healthcare provider. The expanded list includes events likely to occur in outpatient or post-acute care settings such as elopement, self-harm, pressure ulcers, and criminal events.

Neither the newly final rule requiring State Medicaid Programs to define OPPCs, nor the NQF expanded list of never events address how payment denials would be applied outside the hospital setting. For example, Medicaid payments to nursing facilities are on a per diem basis. Which days would be denied payment in the event of an elopement or a pressure ulcer?

Only two comments were made during the NQF public comment period. The American Hospital Association astutely commented that pressure ulcers can and do occur for reasons that are unpreventable. However, no provider group questioned how denial of payment for such events might be implemented. Post-acute care provider groups should begin now to collectively prepare for the rulemaking process soon to begin in every state in the Union to define HCACs and OPPCs.