DIVISION OF HEALTH CARE FINANCING &

POLICY

Patient Protection and Affordable Care Act

Provider-Preventable Conditions

The Concept

Public programs should not pay for treating a health problem arising out of a patient’s care at a facility if the secondary problem could reasonably have been avoided Eliminating payment for poor quality care will

improve patient safety Cost savings is a secondary driver If policies are expanded beyond serious adverse

events, cost savings could be significant

The Components

ConditionsSettingCompliance – mandatory and optional

…new terms in the payment dictionaryPPCs are based on Medicare nonpayment policies and include two distinct categories of conditions.

OPPCs apply broadly to inpatient and outpatient settings and include three “never events.”

States can identify other OPPCs for non-payment.

HACs are identified from Medicare regulations and apply to all inpatient hospital settings

Provider Preventable Conditions

PPCs

OPPCs

3 “Never Events”

State Identifie

d

Medicare HCACs

Conditions – Never Events

Surgical or other invasive procedure to treat a particular medical condition when the practitioner erroneously performs: A different procedure altogether The correct procedure but on the wrong body part The correct procedure but on the wrong patient

Conditions – Health Care Acquired Conditions (HACs)

Foreign object retained after surgeryAir embolismBlood incompatibilityStage III and IV pressure ulcersFalls and traumaManifestations of poor glycemic controlCatheter-associated urinary tract infectionVascular catheter-associated infectionSurgical site infection following identified

proceduresDeep vein thrombosis/pulmonary embolism

Setting

PPCs

OPPCs

3 “Never Events”

State Identifie

d

Medicare HCACs

In any inpatient hospital setting

In any health care setting

In any health care setting

Compliance

PPCs

OPPCs

3 “Never Events”

State Identifie

d

Medicare HCACs

Mandatory

MandatoryOptional – with CMS Approval

Putting it all together

Condition Setting Compliance

HCACs Inpatient Hospital Mandatory

Never Events Any health care setting

Mandatory

State-identified OPPCs Any health care setting (as defined by state and approved by CMS)

Optional

Regulatory Requirements

Identifying and reporting PPCs Mandates provider self-reporting through the claims

system regardless of the intention to bill States may choose to verify through a “present on

admission” (POA) indicator MCOs will track and make PPC data available to the

states upon request (sub-regulatory guidance to be issued)

Regulatory Requirements

Non-payment and payment reduction for PPCs No reduction when the condition defined as a PPC

existed prior to initiation of treatment for the patient “Reductions in provider payment may be limited to the

extent that the identified PPC would otherwise result in an increase in payment; and that the State can reasonably isolate for nonpayment the portion of the payment directly related to treatment for, and related to, the PPC”

CMS encourages states to develop appeals processes or to use existing appeals processes

Regulatory Requirements

Effective date July 1, 2011Compliance action delayed until July 1, 2012

DHCFP Proposed Plan

Current Constraints Cannot incorporate provider self-reporting into claims

system with change of fiscal agents Activation of POA indicator - TBD No methodology for payment reduction on per-diem

payment system

DHCFP Proposed Plan

Address baseline compliance (no state-identified PPCs)

Ensure compliance and policy consistency with MCOs

Phase in 4 stages:1. Prior Authorization2. Retrospective Review3. HP System Edits4. Implementation of provider self-reporting with

implementation of 5010 of X12 standards for HIPAA transactions

DHCFP Proposed Plan

Prior Authorization (Stage 1) HP manually screens PAs for PPCs

Approves (includes payments to secondary providers treating PPCs caused by primary providers)

Denies via new PPC denial code

All cases are referred to SURS for further review

DHCFP Proposed Plan

Prior Authorization (Stage 1) HP manually screens PAs for PPCs

Approves - Denies via new PPC denial code

DHCFP Proposed Plan

Prior Authorization (Stage 1) HP manually screens PAs for PPCs

Approves Denies via new PPC denial code

DHCFP Proposed Plan

SURS retrospective review (Stage 2) Using PA information Using UNLV/CHIA data Using “Never Event” report (SLA)

DHCFP Proposed Plan

HP System Edits (Stage 3) proposed for 2012POA indicator and Provider Self-Reporting at

Claims Level (Stage 4) TBD

DHCFP Proposed Plan

Payment ReductionMost per-diem states are using a case-by-case review

and we can find no consistent methodology applied.

Case-by-case review could be accomplished via: SURS staff Recovery Audit Contractor Fiscal Agent Medical Review

DHCFP Proposed Plan

DiscussionIdentifying PPCs

DHCFP Plan Input on other methodologies OPPCs and provider types

Payment AdjustmentsCosts which can be reasonably isolated as directly related to

treatment for and related to the PPC Per-diem denial Methodology for reduction of a portion of costs