More from the IPPS Proposed Rule: Present on Admission Requirements, Part 1

To err is human. To forgive is divine. But to pay for hospital errors is no longer tolerable.

In this post, I’ll discuss the CMS proposal for determining if beneficiaries acquired a complication during their hospital stay. In a later post, I’ll discuss how CMS is proposing to deal with some specific hospital-acquired conditions.

The Deficit Reduction Act of 2005 requires hospitals to begin identifying secondary diagnoses that are present on admission (POA) by October 1, 2007. The FY 2008 IPPS proposed rule--the same rule that proposed Medicare Severity DRGs (MS-DRGs)--indicates that CMS is in the process of issuing instructions to hospitals on reporting the POA indicator for all diagnoses effective October 1, 2007. During the April 19th open-door forum discussing the IPPS proposed rule, CMS stated that POA reporting instructions will be communicated to hospitals in a transmittal. CMS also stated that the date the POA indicator must be reported will also be communicated in this transmittal. The October 1, 2007 date provided in the proposed rule is incorrect. POA reporting will most likely be required by January 1, 2008.

Why is Congress requiring hospitals to go to all the trouble of reporting the POA indicator? The Act also includes a requirement that by October 1, 2007 Medicare choose at least two conditions that are:

1. High cost, high volume or both
2. Assigned to a higher paying DRG when present as a secondary diagnosis
3. Reasonably preventable through application of evidence-based guidelines

Beginning October 1, 2008, codes representing these conditions would not be considered during DRG assignment unless they were present on admission. In many cases, omission of these codes would result in a DRG with lower payment weight being assigned to the case. The POA indicator will be required for each diagnosis in order to determine which conditions developed during the hospital stay. As a result, some hospital-acquired conditions could end up costing facilities much more.

Next, I’ll discuss the 13 hospital-acquired conditions being considered by Medicare and discussed in the FY 2008 IPPS proposed rule.