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Medicaid Cuts for Health Care Acquired Conditions |
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Focus on
Health Care Reform: Medicaid Cuts for Health Care Acquired Conditions
A rather vague
provision of the Patient Protection and Affordable Care Act (PPACA – or
now
more commonly called the Affordable Care Act or ACA) would cut Medicaid
payments to states for Medicaid-covered services relating to health care
acquired conditions. This provision expands on existing law that reduces
Medicare payments to hospitals for some health care acquired conditions
by
eliminating any increase in the patient’s Diagnosis Related Group (DRG)
that
otherwise would result from the condition. The ACA language applies this
concept to Medicaid, but does not limit the expansion to hospitals. The
statute
calls for relatively quick action by requiring the U.S. Department of
Health
and Human Services (HHS) to adopt regulations effective July 1, 2011,
that
spell out the details of the program. As is typical for federal Medicaid
provisions, the law would cut payments to states (presumably through
lowered
Federal Financial Participation) instead of cutting providers directly,
but
that could be the ultimate result because states otherwise would have to
make
up the difference using state funds. The statute requires that the
regulations
“shall ensure that the prohibition on payment for health care-acquired
conditions shall not result in a loss of access to care or services for
Medicaid beneficiaries,” although it is not clear what this means given
that
payment cuts are mandated. The law defines health care acquired
conditions by
referring to secondary diagnosis codes that affect classification under
the DRG
system, which is also somewhat unclear in its application to
non-hospital
providers, so the definition will have to be fleshed out in regulations.
In
developing the regulations, HHS is to consider state-level programs that
cut
Medicaid payments for health care acquired conditions as well as the
existing
Medicare rules for hospitals. As this portion of the health care reform
legislation has an unknown but potentially significant impact on
long-term care
providers, we will need to carefully monitor and provide input into the
regulations when they appear.
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