Who: 

The Centers for Medicare and Medicaid Services (CMS) revised the Medicare Hospital Inpatient Prospective Payment System (IPPS) to implement changes based on continuing experience with this system and to implement certain provisions of the Deficit Reduction Act of 2005. 

What: 

There were many revisions made to the IPPS system as a result of this rule change.  Provisions that apply to the reimbursement of hospital-acquired conditions include:

• The establishment of a list of conditions (or secondary diagnoses) considered as  “reasonably preventable” with the application of evidence-based guidelines.
• Adoption of a new required process for hospitals to report the presence of these conditions (or secondary diagnoses), if they exist, for each patient at the time of admission.
• Hospitals are no longer paid at the higher DRG [diagnosis-related group]-reimbursement rate that applies to these conditions, if the condition originates while the patient is in the hospital. That is, the case is paid as though the secondary diagnosis was not present.

How: 

CMS worked with public health and infectious disease experts from the Centers for Disease Control and Prevention (CDC) to identify a list of hospital-acquired conditions.  They also considered public comments from health care professionals, industry groups and organizations, and the general public in response to a proposed rule issued in spring 2007. 

The following conditions (or secondary diagnoses) were chosen for the initial phase of implementation in 2008:

1. Serious preventable event—object left in surgery
2. Serious preventable event—air embolism
3. Serious preventable event—blood incompatibility
4. Catheter-associated urinary tract infections
5. Pressure ulcers (decubitus ulcers)
6. Vascular catheter-associated infection
7. Surgical site infection—mediastinitis after coronary artery bypass graft (CABG) surgery
8. Falls (indicated by ICD-9 codes representing injuries that occur often as a result of a fall, such as fractures, dislocations, intracranial injury, crushing injury, burns, and other and unspecified effects of external causes)

The new provisions will require hospitals to submit information regarding secondary diagnoses present on admission by flagging the ICD-9 codes of these conditions with POA [present on admission] in their reporting.

Other conditions that were under consideration and are also topics for future rulemaking reviews:

• Ventilator-associated pneumonia (VAP)
• Staphylococcus aureus septicemia
• Deep vein thrombosis (DVT)/pulmonary embolism (PE)
• Methicillin-resistant staphylococcus aureus (MRSA)
• Clostridium difficile (C-diff)-associated disease (CDAD)

When: 

October 1, 2007: Hospitals were required to begin reporting the presence of these conditions upon Medicare patient admission for reimbursement considerations in FY2008.

October 1, 2008: Reimbursement rates affected impacting financials for FY2009. Cases discharged with these conditions were not paid at the higher DRG rate, unless they were present on admission and reported.

Why: 

A federal law, called the Deficit Reduction Act of 2005, required CMS to select, by October 1, 2007, at least two conditions that:

• Were high cost or high volume or both,
• Result in the assignment of a case to a DRG that has a higher payment when present as a secondary diagnosis, and
• Could have reasonably resulted in prevention through the application of evidence-based guidelines

For hospital discharges occurring on or after October 1, 2008, hospitals will not receive additional payment for cases in which one of the selected conditions was not present on admission.

The law provides that CMS can revise the list of conditions from time to time, as long as the list contains at least two conditions.

The law also requires hospitals to submit the secondary diagnoses that are present at admission when reporting payment information for discharges on or after October 1, 2007.

Resources:

 For more information on these changes, visit http://www.cms.gov/HospitalAcqCond/downloads/HACFactsheet.pdf.