On June 6, 2011, CMS published a final rule to implement an Affordable Care Act (ACA) provision that prohibits Medicaid payments for care associated with “provider-preventable conditions” (PPCs). There are two categories of PPCs: 

  1. Health Care-Acquired Conditions (HCAC) – This term applies to Medicaid inpatient hospital settings, and includes at a minimum the full list of Medicare’s hospital acquired conditions (except Deep Vein Thrombosis/Pulmonary Embolism following total knee/hip replacement in pediatric and obstetric patients).  
  2. Other Provider-Preventable Conditions (OPPC) – This term applies to Medicaid inpatient and outpatient health care settings where these events may occur, and includes at a minimum the subjects of three Medicare National Coverage Determinations (surgery on the wrong patient, wrong surgery on a patient, and wrong site surgery). States could expand their policies to settings other than inpatient hospital and to additional conditions with CMS approval.

States may not prohibit payments to a provider for a PPC if the patient’s condition existed prior to the initiation of treatment, and states must ensure that nonpayment for PPCs does not prevent access to services for Medicaid beneficiaries. In addition, states may limit provider payment reductions to the extent that the identified PPC would otherwise result in an increase in payment, or if the state can reasonably isolate for nonpayment the portion of the payment directly related to the PPC. Note that while the statutory effective date is July 1, 2011, CMS intends to delay compliance action on these provisions until July 1, 2012.