Provider-Preventable Conditions - Payment Adjustments
What is the financial penalty if a patient develops a PPC?
DHCS does not impose "financial penalties" associated with PPCs; rather federal and state laws prohibit Medicaid (Medi-Cal) from paying for treatment of a PPC. DHCS will adjust payment for a PPC when all of the following conditions exist:
- The PPC resulted in an increased payment.
- DHCS can reasonably isolate for nonpayment the portion of the payment that is directly related to treating the PPC.
- The PPC did not exist prior to the provider initiating treatment for that patient (was not present upon admission to a hospital or arrival at a health care clinic, or clinical evidence revealed the condition existed prior to treatment).
For example, if a patient is admitted to a hospital for care where it is necessary for the patient to stay four days, develops a HCAC after being admitted and is treated and released within the expected four days, DHCS would not adjust the payment since caring for the HCAC did not increase payment. If the patient needed to stay an extra day in order to treat the HCAC, DHCS would not pay for the extra day.
DHCS will not pay any claims associated with an OPPC, since the claims can reasonably be isolated to treat the patient and the OPPC was not present upon admission.
How will DHCS adjust payment for fee-for-service providers?
DHCS first examines each PPC to see if it qualifies as a PPC and if DHCS should adjust payment. Both audit staff and skilled professional medical personnel review all payment adjustments for PPCs. If DHCS has already paid the provider for treating the PPC, it will withhold future payment to the provider in an amount equivalent to any increase in payment attributable to treating the PPC.
If DHCS has not paid a claim to treat the PPC, it will deny payment to the same provider for any isolated acute days or other billed charges to treat a PPC that was not present upon admission in excess of the medically necessary days to treat the condition for which the patient was admitted.
How will DHCS adjust payment for a PPC for a patient who is in a Medi-Cal Managed Care Plan?
Once DHCS enters the encounter data related to each PPC into its data information system, DHCS will review the specific encounter data, and that data may be included as an adjustment to calculations used to set the Medi-Cal Managed Care Plan (MCP) capitated rates.
Am I required to report a PPC if the beneficiary is eligible for Medicare or has other insurance coverage?
Yes. Reporting requirements and payment adjustments apply to Medi-Cal beneficiaries who also have Medicare or other insurance coverage.
How will the state handle Medicare crossover payments?
Medi-Cal will not pay Medicare crossover payments that are associated with PPCs.
How will DHCS adjust payment for providers who use the diagnosis-related grouping (DRG) system?
DHCS will not pay any increased payment solely attributable to any PPCs not present upon admission. The DRG payment system will allow hospitals to record PPCs that were present on admission. Providers who are paid using the DRG system still need to report each PPC.
Is the concern for payment only for treating the condition or for the diagnostic identification as well?
The review and adjustment to any payment is only attributable to treating the condition and not the diagnostic identification.
What do I do if I disagree with the payment adjustment?
Providers may use the standard appeal process currently in place for any Medi-Cal payment appeal if they disagree with a payment adjustment. If you are appealing the initial payment adjustment, follow the appeal process for billing for your provider type.
If you are appealing a decision by Audits and Investigations Division, you may send a letter and supporting documentation to:
Administrative Appeals
Office of Legal Services
Department of Health Care Services
1029 J Street, Suite 200
Sacramento, CA 95234-7320
