Affordable Care Act Helps States Improve Quality of Care, Save Money

CMS issued a final Affordable Care Act rule that will reduce or prohibit payments to doctors, hospitals and other health care providers for services that result from certain preventable health care-acquired illnesses or injuries. This rule will help reward providers who provide high-quality care to people in Medicaid leading to better care for patients and lower costs.

This final rule builds on states’ successes and Medicare policies, which already reduce or prohibit hospital payments for preventable conditions. The new rule would better align Medicare and Medicaid payment policy, while giving states the flexibility to expand the list of preventable conditions the program would no longer pay for. In recent years, many states have been at the forefront of these improvements.

“Today, we are partnering with states to give them the tools to improve the quality of care for patients and lower costs for taxpayers,” Donald M. Berwick, MD, CMS administrator, stated in a press release. “These steps will encourage health professionals and hospitals to reduce preventable infections, and eliminate serious medical errors. As we reduce the frequency of these conditions, we will improve care for patients and bring down costs at the same time.”

This step is part of CMS’ ongoing efforts to improve the quality of care that patients receive and reduce overall health care costs. These efforts include tying payment to quality standards, investing in patient safety initiatives to reduce preventable hospitalizations such as the Partnership for Patients, and implementing broad reform of our health care delivery system.

The new rule prohibits states from making payments to providers under the Medicaid program for conditions that are reasonably preventable. It uses Medicare’s list of preventable conditions in inpatient hospital settings as the base (adjusted for the differences in the Medicare and Medicaid populations) and provides states the flexibility to identify additional preventable conditions and settings for which Medicaid payment will be denied.

The final rule is effective July 1 but gives states the option to implement between its effective date and July 1, 2012.

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